The same forces that enable high tech salaries, also make layoffs more likely.
- The market for talent is competitive. So companies bid up to the absolute max they can
- The market for managers is also competitive. Creating dynamics that lead to larger teams and raises for team members
- Companies allow things like remote work, which is a perk, but also has a lot of abuse in terms of how much work gets done
The end result is that if companies are spending their max, if there's a shock to the market/system etc they have to cut. You'd see this less if there was more padding/ less competitive pressure/lower salaries.
I think that's fine and the system is working as intended. People should be freed up to move to other roles where they can be productive. Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
The issue is not that you're getting fired. The issue is that healthcare is attached to employment, that makes zero sense. There should also be some reasonable government provided safety net so people can reskill/learn and move to other fields.
A somewhat sensible take, but the issue isn’t just healthcare. A lot of your life is based off of long-term, fixed cost cash flow. E.g. you can’t pay less on your mortgage just because you got fired. Even with savings, getting laid off is highly disruptive, and, if done as part of a broader downturn in the market, you may never recover the required cash flow to enable your lifestyle.
There are also different types of creep, some that you can easily stop, and others that are more difficult. Specifically, everything that involves a medium to long-term obligation (such as a mortgage or vehicle loan) can cause problems if you cannot sustain it through cashflow interruptions or significant declines. Going out to expensive restaurants and Broadway shows definitely costs a lot of money, but you can immediately stop them if you have money trouble.
the problem with restaurants and broadway is that you've already spent the money on those things when the going is good, and can't claw it back retroactively when the going is bad.
That's why a budget is necessary, and you plan for emergency (of which a layoff is one). Saving up for an emergency fund means you don't spend on luxury until it is saved, which means no broadway or restaurants (unless you're super highly paid, in which case it'd be quite fast).
Transaction costs for selling your house are incredibly high. Also depending on your personal situation, especially if you have kids in school, it can be extremely disruptive.
Car market is crazy these past few years, but the common wisdom is "your car loses worth the moment it leaves the lot". and it is probably still an essential so you can ensure cash flow. It's more expensive making a bad bet with a beater and spending hundreds keeping it running.
And selling your house is a last resort. rent is still more than mortgageso you're losing both asset and liquid wealth with that move just to buy some time. You're better off taking out a second mortgage if needed than selling off entirely.
>And selling your house is a last resort. rent is still more than mortgageso you're losing both asset and liquid wealth with that move just to buy some time. You're better off taking out a second mortgage if needed than selling off entirely.
...not to mention that if you're losing your job and can't find a new one readily, chances are you're in an economic calamity and you'll be selling near the bottom.
Exactly, I feel a lot of my coworkers fell under this trap: if you need cashflow for mortgage on your 4m mansion in (affluent neighborhood), you can't really afford it.
I make a decent salary as a programmer (150k) but my house only cost 250k and my mortgage is about 1400. How I see it, if I have to flip burgers to keep my house, I can pull it off. I can't imagine have a mortgage that's 10gs a month.
Sadly it seems it's unlikely they'll hire you even though they might need the help that bad because they're afraid of paying to train you and then you leaving once something better, and in your line of work, comes along.
I mean I just meant a low paying job. During COVID which even have more oversupply, I was bored and I was drive around doing doordash and other delivery services even though I had my tech job. There is always a surefire way of making one or two thousand a month here in the states if you're properly motivated.
Not sure what you mean. Job growth is continually rising, and unemployment continues to remain at historic lows (where it has been since 2021-ish). [0]
The job market is doing just fine, unless you’re in very specific areas such as the automotive industry or certain types of manufacturing.
These charts use "employment" in a very pedantic way. They don't look much at underemployment nor the shifts in proportions of salary ranges.
I believe they also count gigs. So I could run Doordash for under minimum and be "employed" technically.
The other dangerous thing is "averages". This is one of the special cases where you need to look at the lower quartiles. The average/median can look great, but if we have an entire quartile unable to pay rent we'd be in trouble as a whole.
To be clear, I was only responding to your first statement about “how bad the job market's been.”
You can click through to the BLS survey to read more about their methodology, but the job growth number of +254k jobs in September only includes payroll employees. And reading the report would tell you that they do, in fact, track underemployment (people who worked part time but would have preferred full time employment). And neither job growth nor the unemployment rate has anything to do with “averages.”
Can you provide any data to refute the numbers I shared? Because again, the job market is looking pretty good to me.
I find it hard to believe you can flip enough burgers to pay that mortgage and still survive. Not many fast food places will pay over 30 hours a week to burger flippers. Managers yes. You would barely survive.
That is nonsense. That's more than enough to afford a studio in New York City.
You can easily afford a luxury studio with a doorman and a pool making half of that!
Is a "luxury studio" a real thing in NYC real estate or was this a joke?
The term itself sounds absurd and oxymoronic to me, but also I know NYC housing is absurd and I can imagine that there are places that do nice interior finishes on studio apartments and call them luxury so maybe it's real?
really depends on CoL and remote work and a half dozen other factors. My house is around the same mortgage but also twice as expensive in a suburb that is arguably the boonies. Even with the $20/hr miniumum wage for flipping burgers It'd be a tight fit after utilities and other payments.
Every house requires cash flow, regardless of mortgage amount. There's something to be said for overspending on a house for sure - but let's not forget mortgage(if any), maintenance, property tax, utilities, insurance, etc. Last year I spent more on maintenance than my mortgage cost.
You get a mortgage because most people cannot just outright buy a hosue with cash. We can discuss the balance of how big a mortgae to your salary, but most people through American history could "not really afford it" by that definition.
But most of history relied on a labor market focusing on retention and training. We're far past that. We're a gig econnomy in all but name with these kinds of evonomic swings.
The only mortgages that don't require cashflow are the paid off mortgages. Even if someone has a year of savings, or two years, or three, after that amount is drained, they need cash flow again. So how does one buy a house without being dependent on cash flow?
Well, you need cashflow on a house in general. Even with a paid-off mortgage, I'm easily $10K/year and probably closer to $20K if I'm not pushing various stuff off.
2025 standard deduction is $30k for MFJ. Ain’t many people passing that mark these days in itemized deductions so the mortgage interest deduction is moot.
Well the most obvious approach would be to pay cash.
The more fiscally conservative option is to only borrow money if you have capital which is earning income at a higher rate than the mortgage. This probably necessitates having more capital than the house costs.
The problem with that is that unless you have an extremely well paying job or rich parents, you have to outsave inflation and rising house prices. You may never own. Getting a loan just locks you into an inflation proof price as a "forced" savings. I don't think it's realistic at all for 85% of Americans to save for a new house.
If you save $2.5k/mo for 15 years, after 14 years (mid-30s), you’d have $800k at 8% interest.
Even in Seattle, $800k would get you a decent starter home.
(I chose $2.5k, bc 15 years ago out of college, that’s how much I saved living in GA on a $70k salary). I saved even more when I move to California in my mid 20s.
That' assuming houses don't go up in price though right?
Also I think it's pretty rare for people to have the mental fortitude to save 2.5k a month for a house on top of living expenses, rent, and trying to build your retirement / savings / emergency fund.
It's definitely possible but I think it's out of reach for the average person.
> That' assuming houses don't go up in price though right?
No, it isn’t. You can invest your savings. If you had put $2,500.00 a month into SPY500 since October 2009 (15 years ago) you’d have $1,388,302.13 today.
> Also I think it's pretty rare for people to have the mental fortitude to save 2.5k a month for a house on top of living expenses, rent, and trying to build your retirement / savings / emergency fund.
How is saving for a house “on top of” literally “saving”? If you can save for retirement, savings, and emergencies then you have the mental fortitude to save for a house. People are bad with money, we know that. One of the best examples is buying a house they can’t afford.
> It's definitely possible but I think it's out of reach for the average person.
Yeah, I just think examples like this need to work for the masses in order to be useful otherwise they're just pie in the sky advice like abstinence to prevent childbirth. It does work and it's 100% effective but humans are horny. Same with saving this amount of money, there's a select few that can pull it off but most are incapable. Those are the people advice is for
>Live within your means and save as much as you can
It's expensive being poor and the job market isn't getting better to compensate this economy. If you rent forever you spend more than someone paying off a mortgage (only amortized by needing to upkeep the house youself). If you're wokrking your back out everyday you're more likely to pay more insurance and medical bills than the cushy white collar job with proggresion options.
Most people don't even have the $1000 rainy day fund. They are 3 steps removed from the thought of a "diversified portfolio".
They can’t afford a rainy day fund so they should buy a house?
I have a “cushy white collar job” and I can’t afford a house. Prices are absurd. I can make mortgage payments but it would destroy any other savings. Buying a house when poor isn’t a smart financial move.
I wish everyone could afford a house but that’s not the world we live in. Nothing will change until people wake up and stop killing themselves to inflate home prices.
Just because you buy something doesn’t mean you can afford it.
If you can’t retire or pay medical expenses or maintain your physical and emotional wellbeing because you spent money on a house then you couldn’t afford it. Owning a house doesn’t mean you can pay the property taxes or maintenance costs.
My point is that people are making financially unsound home buying purchases.
Another way to say this is that Bugatti doesn’t sell Veyrons to people with $1,000,000.00. Bugatti sells Veyrons to people with an extra $1,000,000.00.
Now I’m curious how this happened. This is the portion of homes owned by their residents, not the number of owned homes as a portion of total population. I’m also curious what the income and wealth to home ratios are. Looks like I have a weekend project.
The pre-war/post war duality is easy to understand. The US made it official policy to increase homeownership. The government subsidizes housing for all income levels and there was tons of housing built.
The post-war era has seen only minor changes in homeownership rates. And those tend to be around macro economic events like 2008 and Covid (and the Reagan era mortgage rates woof).
My bet is simple: Boomers are all at retirement age if we use the cap of 1954, they were basically given land during the post-war boom. Many had a lifetime career so there was no need to constantly hustle and move about to get a comfortable life. Home ownership is likely very top heavy for Boomers and older Gen X as a result.
If that's even in the ballpark we're going to see a lot of assets aquired by insurance and hospitals to pay off the final years and this residential ownershio will torpeo.
The census bureau has looked at this. The Reagan years hit boomers hard causing their percentage of homeownership to drop compared to a similar age cohort historically. Then 2008 wrecked the young boomers and gen x similarly.
In general terms the oldest cohort has steadily advanced in home ownership (I’d guess due to our welfare for the aged that isn’t needs based and better old age health, not land gifts but who knows). So there is definitely a trend of the oldest age cohort increasing its homeownership % while the other cohorts decrease.
But for the under 35 crowd today, they own their own home at a higher percentage than boomers or gen x did when they were in that cohort.
There is also the consideration that the US is just older than it’s ever been. I’m not a demographer do I have no idea how that plays out.
No, those are considered. That $2,500/mo is at the bottom of your career. You will be saving more as you age, even accounting for employment gaps.
If we are considering kids, presumably there is another partner (and income) to be added to the equation. While you may have half the amount saved due to the cost of raising children, your partner would have the other half.
8% was chosen to discount 3% inflation (cost of living) from SnP 500’s average 11% growth.
Ah yeah fair. The numbers I quoted are median and I don’t have the source. They are from a quick search of financial news. Your index numbers are probably a more sound comparison of overall house prices.
But even using the index numbers it isn’t hard to see that housing prices do in fact go both up and down.
They are not going down because of lack of inventory. Look at commercial, some properties had an 80% discount. But that requires that supply overwhelms demand. It’s not happening with regular housing.
That's not guaranteed, and not how you save for a fixed goal.
I don't know of any lower-risk and higher-interest alternative to the 30-years-fixed that is currently offered to US consumers, and based of the above answer, neither do you.
Yes, it’s a tragedy of the commons. That doesn’t make taking on a loan you can’t afford less of a bad idea.
House prices are unaffordable because people take on loans they can’t afford. This reinforces the unaffordable prices. If milk was $40.00 a gallon you’d just stop putting it on cereal and eventually farmers get the message. Houses are the same thing.
If you can’t comfortably afford a house then don’t buy it. You’re stuck renting or buying something more modest. This isn’t complicated.
The idea that house prices can only go up is delusional. Nothing about a house is uniquely inflation proof or even inflation resistant. This isn’t the only investment vehicle available to you.
This idea that houses are an important part of financial security is putting the cart in front of the horse. It leads to the NIMBYism that prevents additional supply from being built because prices must always go up.
We all exist in the same economy and no action happens in a vacuum. When you buy something you have reduced supply and applied upward pressure on price. Individually this effect is so small it is immeasurable. In aggregate it isn’t.
This was a failure of regulation, not just in the US but elsewhere too; banks and mortgage brokers weren't doing their due diligence and were giving out loans and mortgages that people couldn't afford based on their income and other outstanding debts, eventually leading to the 2007/8 financial crisis.
Which should have been a lesson, but five years later, housing prices recovered and ballooned. I don't know why besides increased demand and reduced availability, clearly people can still get mortgages despite the lessons learned from the crisis.
One thing I've come to realize is that the larger your social circle, the more prone you are to comparisons and hence lifestyle creep. You can see this where the careers that involve a lot of socializing (sales, entertainment, law, finance etc) are known for having flashy people. And the careers that you can do as a loner (programming, quant, researcher etc) are known for having miserly folk
I don't know why we treat large stock portfolios as if it's a convinient savings account in these talks.
My financial teachings were always emergency fund -> 3-6 months of savings immediately accessible -> consider stocks (hire a financial planner if you don't know stocks) -> consider asset management. your first foray into saving if you're barely spacing by isn't to rely on the S&P 500.
There seems to be an analogy to servers being capable enough for usual demand(income>spending), but fails due to some downtime for some servers(out of a job) or peak loads(medical emergency). This can be amortized by having data centers serving multiple apps(social security, insurance - but they dont always exist).
One main fault in the analogy is that in an economic crisis, there is a vicious cycle of income loss which leads to lower demand leading to more lost jobs. This coordination failure can be handled by fiscal/monetary policy. Whereas server failure, even when widespread due to a virus doesn't happen recursively like that.
This why we need the tiny home movement combined with progressive property taxes - 0 prop tax bracket for lowest 20% property values If you have mortgage then you don’t really own your house.
Tiny homes like the coffin homes of overpopulated cities, you mean?
Or tiny homes like the luxury single occupant container buildings on a bit of land?
Tiny homes are not the solution, they are hipster semi-cottage-core fashion homes. You're probably thinking of regular apartments, but for some reason they aren't built at the rate needed. Build ten million apartments (for starters) and the cost of living will go down. Satisfy / saturate the market first, then think of gentrifying with fashion homes.
>but for some reason they aren't built at the rate needed.
crabs in a bucket. Those who got in and got theirs don't want their property value falling. Americans treating housing as a stock instead of a necessary resource for living really ruined a lot of the dynamic of city planning.
Seems like this would hurt those laid off here. They are probably in the top 20% of property values.
That said, I think it is a pretty bad idea. Use of public funds dont increase with property value, it just means you have deeper pockets. I would be more in favor of flat taxes on homes independent of value, so people pay their fair share for community resources consumed.
honestly this is one of the reasons I prefer pre-IPO companies, my salary is lower until they do a buyback or an exit, but it ends up basically in the same place over the long term. This is how I was able to put a downpayment on a house without consciously "saving up" for it. Obviously there's some risk but I've had two buybacks, one IPO, and two acquisitions since 2012
Yeah, the stakes for the two sides of that transaction are completely different, so equivocating rational responses on either side makes no sense. OP lost me there.
Eventually we all get fired. It shouldn't come as a shock. This is why people working in volatile industries subject to boom/bust cycles should live below their means and keep at least several months of living expenses (including health insurance premiums) in low-risk, liquid investments.
I do understand that it can be challenging to save for young people with student debt starting out in a HCOL area. But I see older tech workers who ought to know better buying luxury cars and fancy gaming PCs and taking exotic vacations. Good luck to them when the next recession hits.
Yes, but the problems start in severe economic crises. Specifically, when those several months turn into years.
Many filters during the hiring process, prior to interview will discard those candidates who have gaps since last employment regardless of circumstance. They may use AI as a third-party company to review and obscure the fact that they aren't hiring anyone over 40, female, or otherwise protected classes but that is what is happening regularly, along with other elements such as degrees being weighted higher than experience algorithmically.
> I do understand ...
I can tell you from personal experience, this opinion of yours isn't reflective of the whole. I've been in Tech for a decade, I was unlucky and was laid off before the major lay offs (2022) as I was involved in workforce reduction for a buyout merger. I've been looking ever since, and I've had to find work elsewhere in the interim once my reserves were expended.
I was extremely frugal, cooking everything myself, nothing luxurious. Inflation destroyed my reserves, the lack of jobs forced me to look wider than my given profession since there are no jobs, and I had more saved than most (>50k in liquid reserves at the start).
This isn't some recession like before. This is a great depression, potentially a big debt crises like Germany pre-WW2.
70% of my professional network in IT/Tech right now, across the board, is out of work. I'll let that sink in. 70%.
We are at peak hiring for seasonal hiring and unemployment is 7.0% in August? Hiring freezes guarantee this will be double digits by the annual count. National unemployment is 1.5%. That's a 4.6x national distortion between the national average unemployment and one sector that impacts everything else as a labor multiplier, and that measurement only counts those currently getting unemployment, any long-term displacement outside 18 weeks isn't counted.
Its looking more like we're in the middle of an economic collapse, which makes sense if you know about ponzi's, economics of boom-bust cycles, and how we are entering a bust cycle related to the petrodollar agreement abandonment (by the Saudi's); all those dollars printed for abroad use are now flowing back to compete with the same goods despite high interest rates.
BRICS largely isn't about attacking the US economically, its about sheltering from the global economic fallout of fiat money printing, for more than half a century. The bankers are and have been doing this to us since before we were born, and this happens every time large fractions of global assets get concentrated into few hands. Its cyclical. Large market-share companies are funded by preferential loans made by those same bankers. This is how you sieve wealth and marketshare, then drive prices up, and eventually end in deflation or hyper-inflationary collapse, because unlike normal systems economics is both sticky psychologically, and mathematically chaotic (3-body-problem).
There is no beautiful deleveraging, the bill always comes due. If this worsens, and I don't see how it cannot, this will be known by the survivors as the folly of one big generation.
Unemployment calculations from data recorded during that time have since changed. The same unemployment numbers are not the same mathematical objects being compared.
At this point, we can never know the true scope of unemployment to make any comparison definitively, because the measurements no longer accurately collect the necessary information for such a comparison.
You don't see engineers turn sampling data into an average rate of change, and then use it for safety-critical applications that require instantaneous rates of change.
In my previous response, I said unemployment today isn't counted after 18 weeks, so you should be aware that these objects are not the same.
Just because you have no visibility on a problem doesn't mean there isn't a problem especially when objective measures indicate there is a problem.
No definitive comparison can be made objectively, claiming its not even close would involve delusion when no external objective comparison can be made, definitionally.
> Unemployment calculations from data recorded during that time have since changed. The same unemployment numbers are not the same mathematical objects being compared
We can look at the number of people on payrolls and the number of people claiming unemployment.
You are in a deep tech bubble if you think we're in a recession let alone depression. (What we are in is a cost of living crisis.)
Recessions typically are pullbacks of the market sector for 1-2 years, but not necessarily slowdowns in growth, though there is no globally accepted definition for a recession.
Depressions typically have stagnant growth, starting in one sector, and expanding; with no prospects and a duration that can last years (plural). You can have a depression where everyone says they are hiring, but no hiring actually occurs.
Cost of living crises naturally occur during the latter crises given the chaotic nature of deflationary and inflationary forces (money-printing). They are not mutually exclusive.
Payroll data collection has problems with accuracy, people claiming unemployment also have data collection problems. Its not uncommon for the government to withhold unemployment benefit approval until some arbitrary bureacratic requirement is met with no means to contact someone to resolve it timely. I know several people who received their 18 month unemployment effectively as a lump sum and they spent days of labor trying to overcome those hurdles.
This causes a delay of action, and bursts in time (temporally) which cannot be compared except as an average. Revisions are subject to problems too.
> Recessions typically are pullbacks of the market sector for 1-2 years, but not necessarily slowdowns in growth, though there is no globally accepted definition for a recession
There absolutely is. A slowdown in growth is not a recession.
I'm not saying there isn't a problem. I am saying that you can't extrapolate from 70% of IT people in your circles being unemployed to the entire economy imploding Great Depression style.
Even in IT circles, it's still better out there than it was during the GFC (2009, 10% US unemployment), and way better than it was after the dot-com bust (2000, <6% overall unemployment, but much, much higher in IT).
I'm sorry for your troubles but that unhinged rant is completely disconnected from objective reality.
BRICs isn't even a real thing, it's a total joke. They've been talking about an alternative reserve currency for years but have made zero real progress.
Something uncommmon for Gen X and unthinkable for Boomers. But think about how modern America structured all these payment plans...
>This is why people working in volatile industries subject to boom/bust cycles
you just said everyone get fired. I think today it's harder to find a job that isn't on bust/boom. Especially a public company that will slash employees simply to make number go up, no even because they are struggling per se.
>several months of living expenses (including health insurance premiums) in low-risk, liquid investments.
Low risk invesements are talking 2% on a great day and 4% on an excellent day. There were people above talking about 8% interest rates from S&P to outrun inflation long term.
>But I see older tech workers who ought to know better buying luxury cars and fancy gaming PCs and taking exotic vacations.
odd we compare a 6 figure luxury car to what's at best some $5k gaming setup that can in fact be used for more work in this tech sector. my 2.5K laptop was probably a better investment pre-bust than my new bed (I guess we'll see in 20 years with my back, but the bed isn't making me money).
You've got to be kidding. Boomers were fired or laid off all the time. Unemployment rates have been much higher during some years when Boomers were a major part of the labor force, hitting over 10% in 1982.
There's a difference between "it happens regularly" and "no one is safe". We're arguably structured like a gig economy so unemployment rates won't represent the differece on a chart
You should bring a chart on the average tenure at a single company.
The idea that someone's response to being fired should be the same as a manager's response to one of their reports quitting is hilariously out of touch.
It kind of ignores the core asymmetry of capitalism, that those with the capital are the ones with the power. Nobody can do a background check on a company to see who they laid off or fired before they work there.
You can do a background check. That’s not where the asymmetry is, though. The pandemic checks have showed that the asymmetry can be flipped but then almost everyone working low-tier (flipping burgers) will quit his work. The Fed has then decided to re-enslave these people. Someone gotta take the garbage.
>The Fed has then decided to re-enslave these people. Someone gotta take the garbage.
What are you talking about? real (ie. inflation adjusted) wages have gone up more for the lowest quartile of americans[1]. Is paying people more to get them to work "re-enslavement" now?
What do you mean? Information about previous layoffs is all over the news, social media, and dedicated sites like Glassdoor. Only a fool or someone really desperate would take a job without doing a thorough background check on the company first. And while I sympathize with workers who have to take whatever job they can get, that doesn't apply to most HN users.
Glassdoor itself encourages users not to post anything factual, only opinion-based, because of the legal consequences [1]. Glassdoor is more like a Google business review than a background check anyway.
Also your estimation of HN users is probably out of date with the current state of the employment market.
I worked at startups for 7 years. Interestingly, WARN acts are mostly irrelevant for startups because they are only triggered when a certain number of people are about to be laid off (100 or more, I believe). When an employer accesses your employment record, they can see very detailed information. A WARN act filing is neither comprehensive nor detailed.
Well yes. If you're at a startup you should assume you're always a few months from being laid off. Everyone should assume that. You're fighing to survive; the default is dead.
Dropbox, on the other hand, is not a start-up. It's had to file WARN notices [1]. "Nobody can do a background check on a company to see who they laid off or fired before they work there" is false.
Once again, an employment check is not like a WARN act filing. I want to know for a given startup exactly who was fired and why, when, etc.
It’s one thing to be laid off from a startup in general. Another entirely to be laid off right now.
The number of recent layoffs is everyone’s concern right now because of how hard it will be for you to find a job afterward. Layoffs always were going on, and always will for startups, but the days of turning down job offers due to small uncertainties are mostly paused or gone at this point. The demand crunch is very real.
> at least contain exactly who you worked for and the time period as well as possibly your title. None of that is provided in the WARN act
We're talking about the information asymmetry in hiring and firing. Why does knowing the titles and time periods of those laid off in the past help you estimate your lay-off odds in the future?
I thought the one and only thing HR would confirm when background check is employment dates. it's shakey on if they will delineate between termination, layoffs/RiF, or simply leaving, though.
>Why does knowing the titles and time periods of those laid off in the past help you estimate your lay-off odds in the future?
I don't know. Why does knowing my titles and time period help businesses judge how useful I'll be for this new position? It's the same issue but that's where the asymmetry is. People seem fine with big business being able to do that but not prospective employees who may care about retention rates.
But to answer your question: retentions rates let me know how hard the company will try to keep me during bad/down times. Someone who can't even retain for 2 years probably has smoke.
> “The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread.” - Anatole France
Too many focus on equal outcome instead of equal opportuniy.
> bit weird how people feel so differently when they get fired
That doesn't seem the least bit weird to me. If I choose to leave a job (or relationship), I could quite sensibly feel differently if that same job (or relationship) chooses to leave me.
Are they really high? They are not that different from UPS driver salaries.
Just the other day I clicked on the website of some random law firm's career page. I wasn't happy with what I saw (in the context of my own career). Some researchers with 1 year of experience with starting salary of 450k+... tech salaries look high as long as you don't check other professions.
This doesn't really make sense. What is a "researcher" at a law firm? Lawyers at top firms are on fixed pay schedules, starting at 180k as a 1st year going up to something like 450k after 8yrs (?).
Tech is high earning. It gets beat out by high finance and partner-level roles in e.g. law though. If someone is earning 450k in their first year it's probably similar to a quant finance role.
I don't work at a law firm, have no idea what they really do. Based on the description, I decyphered some advanced googling, mostly background checks and precendence finding. It was like 2 or 3 weeks ago, I didn't know that it should have saved it for reference lol.
But pick your favorite firm, and check the salaries. Junior roles are starting at $200k+, frequently at $300k+. And senior roles get senior salaries.
This is just one random firm that I picked from google:
[0] - $235k - $365 - with 1 full year of experience, lol
[1] - $310k - $390 - real estate contracts
[2] - $260k - $390 - real estate contracts, with 2 years of experience
Can you get $350k+ in tech? Well, yes, but with including a lot of luck and ifs. Can you get $350k+ in tech with 1 year of experience? Realistically, only if your dad is called Nadella or Musk.
There are definitely jobs that pay much worse than tech, no question about it. And if you are happy with your salary, than good for you. But nowadays people are mostly made to believe that tech salaries are still extraordinary.
Looking at the best paying professions[3], tech makes only the very end of the list (and only manager level, not code-droid level).
You do not understand what you're reading. I told you, lawyers are on fixed pay schedules. The numbers are different from what I thought, but that doesn't really affect anything I said.
The first role is a 2nd-5th year associate. $235k is for a 2nd year associate, $365k is for a 5th year associate. Each year they get a predefined pay bump. Third role is the same kind of thing (3rd-6th year associate), second role it says mid-level so not 1 YOE.
This firm is also a Big Law firm, the equivalent of FAANG, if not harder to get into. Notice how law is not on your list of top paying professions. Most lawyers are not super well paid.
Also, being an associate is not like being fresh into tech. I don't think it's like a tech new grad role. Average TC for an entry level SWE at Google is ~$200k, and you can be making that as a new grad. Average senior comp is ~$400k, and it's possible to reach that level in 5-7yrs.
Another thing to consider is hours. You will work so many more hours as a lawyer in Big Law than a SWE at FAANG.
Tech workers have it very good. Relatively high pay with relatively low hours. Higher comp professions have much higher barriers to entry and work much longer hours.
They are not high. But most companies have business leadership who sees software developers as annoying and weird nerds. Explains why they are spending all their money on compute so that they can replace them with machines once and for all.
Revisited this, and while it was tongue-in-cheek, it feels a bit ungrateful.
A lot of tech roles are intellectually stimulating and have a wage in the upper distribution of salaries. I think we have a very nice situation going for us.
FYI, Dropbox does not merely allow remote work, it's a fully remote-first company. There's a couple of offices for get-togethers and a few people physically staffing data centers, but everybody else works wherever they want to.
> Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
That's because people have a single employer, while companies have several employees.
That's also why employees are protected, while companies are mostly not. And yeah, the US doubles down on the problem by linking health insurance with the job.
It comes down to the concentration of wealth. Companies wouldn't have the capital to bid up salaries if they faced stiffer competition or couldn't access investment from a limited pool of investors (who all think the same), as is the case now. I know that "diversity" is a dirty word these days, but it's key. A large middle class, where each family has a small amount of money to put towards their diverse desires, is going to lead to a more stable economy than all of the money pooled in the hands of a small group with a much smaller set of needs. Dropbox should never have been able to hire so many people; that capital should have been in the hands of the larger public, who could have spent it supporting a more diverse set of hundreds or thousands of jobs (who wouldn't all be competing with each other for a limited number of seats in the "not laid off" lifeboat).
Put simply, these kinds of things are going to keep happening until our wealthiest (individuals/families/companies) are a lot less rich.
> Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
Really? You think its weird that someone leaving impacts that person more than their manager, team, or company?
A manager doesn't care that you leave because he still gets to bring home a salary, all they have to do is hire another person and maybe cut back on scope for a little while. When someone is layed off or fired they have to go find a new job, their income streams dry up, and are forced to rely on savings. People often have long term financial commitments they cannot back out of, and not knowing how you'll make rent, if you can afford your child's school fees, or even maybe having to cut back on how much you eat, _is stressful_ and emotionally taxing.
Are you fucking kidding me? "Which is a bit weird" I'll tell you what's weird: management who doesn't understand that their employees rely on them more than they rely on the employee.
Of course its fine when someone chooses to leave their job, they've made contingencies and planned around it. Whether it's through savings, another job, or the lottery, people have at least some idea of their plan when they leave a job.
> People often have long term financial commitments they cannot back out of, and not knowing how you'll make rent, if you can afford your child's school fees, or even maybe having to cut back on how much you eat, _is stressful_ and emotionally taxing.
I'm sure people making >200k/year and getting a 4 month severance package will be cutting back on how much they eat.
What you say is true about low or even medium income jobs. But most of the cuts are to tech workers and their managers, ie. people best equipped to manage in this kind of event.
You'd be surprised what lifestyle creep does to people. Often people don't pay off their debts and instead scale their debts to their new income - it's stupid I know.
I agree they should be in a better position because of their income, and I'd say more than an average amount are. But there are still a lot of people in that bracket who absolutely would have the floor pulled out from under them.
People are often caught with their pants down assuming the good times will keep rolling. And even when they see the market downturn or have a generous severance, it still can be very difficult to scrape together the 6+ months emergency fund required on short notice.
Depending on the resale value of what the debt is for (homes mainly) maintaining your leverage ratio can work out great for you. Mortgages are the only way most people are able to invest with leverage and the source of a lot of generational wealth.
That's true, but if you over-leverage yourself and the market goes through a downturn it can spell financial ruin. It's not something to lightly do without the cashflow/assets to back up your financial knowledge - which most people don't have.
You should only leverage what you are OK with losing entirely. Most people should not be leveraging their only home as investments. We are heading into some rough times and people will find out about that.
You would think so but it's often the opposite. The poorer you are the more conscious you have to be about money management so getting laid off may just be yet another obstacle life has thrown at you, business as usual.
Meanwhile if you've lived an easy life you may not have learned how to cope when the hard times come.
A manager doesn't care that you leave because he still gets to bring home a salary, all they have to do is hire another person and maybe cut back on scope for a little while.
Yeah, I'm curious how someone can have an opinions on workplaces and workers and not seem to have personal experience with the subject, especially in a community like this.
Do they just come from a wealthy family so the stance is "Getting fired isn't a big deal, just ask your dad to cover expenses until your next job."?
It seems the original commenter has never really been a "line-worker". But I could be very wrong too, but then I'd be curious how those opinions were formed.
Nope, you're correct: he runs a startup and apparently has been running startups since his early 20s.
> Please tell us briefly about your background.
> I grew up in the Netherlands, and I was interested in technology from a young age. I started a gaming website when I was 13. Later, I attended Erasmus University Rotterdam before founding Fashiolista, my first startup and an early social network similar to Pinterest. It grew to millions of users...
Don't people have savings? Don't people see what's happening in the industry and make sure to have 6+ months of savings? Don't people think that putting away a small portion of their immense tech salary would be a healthy thing to do?
If you grew up with even the slightest feeling of financial insecurity, dipping in to savings can already feel like the end of the world.
I can't imagine living with only 6 months of savings. There's no guarantee that I could find another job in 6 months, and unexpected expenses (medical, car trouble, housing repairs) can easily wipe out a month of savings anyway. In fact, given that a layoff means likely also an economic downturn, finding a job at the same salary within 6 months seems highly unlikely.
I have probably 3 years of no-risk savings at this point, have managed to reduce my living expenses to the point where I could work a 40-hour minimum wage job and still pay for my expenses, and have multiple back-up careers, and I'm only now starting to feel that taking money out of savings is an acceptable risk. That took years of frugal living on a high tech salary. People in their first few years at a tech job or with families will probably never achieve that.
It's so frustrating reading the comments around here. It's like the conversation is driven by people whose circumstances fall on the upper tail end. No concept of financial insecurity. No long-term financial commitments to worry about. Infinite flexibility. Like jeez, congrats. Now try imagining somebody else that's not you.
>The issue is not that you're getting fired. The issue is that healthcare is attached to employment, that makes zero sense.
No the issue is that I get fired after the prior townhall saying "we are not doing layoffs". Companies will outright lie to get little ounces of productivity and treat you like a criminal the moment they break the news, as if we're all school shooters waiting to happen in anger and rage over betrayal.
The circus of the 2023/2024 job market doesn't help either. Even pre-pandemic the process was padded, but now I'm not even convinced 80% of companies have a human reading my resume.
>There should also be some reasonable government provided safety net so people can reskill/learn and move to other fields.
I'd rather not "hit hard times" while shareholders are making a killing and make a conclustion that my entire career needs to shuffle so they can save pennies.
> Companies allow things like remote work, which is a perk, but also has a lot of abuse in terms of how much work gets done
Do you have any evidence of this? There are unfounded claims of “productivity metrics” but I have never actually seen one.
E: I realize this is a poor choice of words after saying productivity metrics don’t exist. What I mean is my tasks are easier to complete in a WFH environment than they are in an office.
I have been far more productive from home. The constraints around communication necessitate effective documentation which enables asynchronous communication which alleviates scheduling challenges which improves delivery.
Maybe managers need to go in to the office to rub elbows but ICs definitely don’t.
Same. It's been a boon for me, and I genuinely enjoy my work, so it's win win. But anecdotally, I know people who abuse it.
On net, remote work is a plus: less commute, less pollution etc etc. And even the abusers, it's not like those people were highly productive in the office, I'm sure.
> remote work, which is a perk, but also has a lot of abuse in terms of how much work gets done
If you can't tell remote employees are slacking then you also can't tell if they are slacking in the office, you are just getting fooled by thinking presence implies work.
There's also COBRA, and the exchanges in the US. Frankly, even if you're eligible for Medicare it really isn't any cheaper if you're a current or recent high earner. But, in any case, it's about $7K/year for an individual who doesn't otherwise have coverage for a spouse etc.
A couple months ago interviewing.io posted something bragging about how "we do anonymous mock interviews. If people perform well in those interviews, they get introduced directly to a decision-maker at top-tier companies, regardless of how they look on paper." ( https://interviewing.io/blog/i-love-meritocracy-but-all-the-... )
This annoyed me enough that I sent in an email complaining that their introduction process specifically notes that I am not eligible for anything, despite performance measured by the site as "highest ever achieved: 94th percentile" (so, knock that down a bit for being a high water mark), because of an insufficient number of years of experience.
They responded:
> It really sucks, especially in this market, but this policy is a function of us having tried for years to get companies to take junior intros, and it didn't work. We offered to do it completely for free, too, fwiw, and no dice.
How competitive is the market for talent? Let's stipulate that, because of a lack of prior employment, I'm not qualified to have a job. How exactly would that situation change?
Clarification: Just because companies don't want a 3rd party like us providing them with junior candidates, it doesn't mean they don't want them. Even back in 2017-2019, when the market was booming, we couldn't get employers to take our juniors... because they generally have their own robust pipeline.
So the solution is to go to companies directly, rather than relying on a 3rd party service like ours, which companies tend to use specifically for roles they can't fill on their own.
I'm not really sure what you're saying here. My point was that the market for talent is not particularly competitive, with the opinion of interviewing.io given as an illustration of that.
You seem to be confirming that the market for talent isn't competitive - in your view, companies have more applications than they want.
Or maybe you're going for a different point? For the suggestion, my experience is that companies won't consider direct applications either, and in the general case do not ever even list junior positions. (An observation which is not unique to me; see e.g. https://marginalrevolution.com/marginalrevolution/2022/07/fr... )
If you're worried that I'm implicitly slamming interviewing.io for claiming to do something very different than what they actually do, I don't think you've rebutted that - "if people perform well in our interviews, we will introduce them to top-tier companies as long as we think their resume looks good" isn't particularly similar to "if people perform well in our interviews, we will introduce them to top-tier companies, regardless of how they look on paper".
Yes, companies do indeed have more applications than they want (I'd argue that means the market IS competitive).
The point I was making is that even though companies don't want to hire juniors through us, they still DO WANT to hire juniors in the absolute. So junior hiring isn't dead.
>> The market for talent is competitive. So companies bid up to the absolute max they can - The market for managers is also competitive. Creating dynamics that lead to larger teams and raises for team members - Companies allow things like remote work, which is a perk
Here, saying "the market for talent is competitive" clearly means that hirers are competing with each other over potential employees. Deciding that you already have too many potential employees is the opposite of that. It would mean that the market to sell talent is competitive, which isn't what was claimed.
I disagree with your conclusion, you have several flawed premises.
The market has been slowly shrinking into fewer and fewer hands over time, which is why it has become more competitive over time. This has also led to cooperative behavior among the large marketshare companies in the sectors to disadvantage competitors, and employees.
Companies do not bid up to the max they can, because the executives take their cut first. The companies bids can only ever be the max of what is left after that, and varies by the greed of those people.
Interest rates would be the shock you described, but Tech unemployment as far as I can tell has until now been bulletproof, and uncorrelated with interest rate rises or falls. Its not rational to assume this market shock is a result of interest rates, AI is the only competitive alternative.
The issue is not that you're getting fired. Its that you can no longer get base goods needed for survival arbitrarily and without notice, and without capital reserves which are finite you are living on the street.
When the entire market as an entirety is contracting, there are no new jobs to move to in other fields.
Worse, the concentrated market is naturally incentivized to impose high costs on any job seekers to interfere in labor relations to create barriers to entry for competitors while suppressing wages for prospective workers.
This natural progression occurs when anti-trust fails, and money printing makes it worse potentially leading to either deflation (a collapse to non-market socialism) or hyper-inflation (a collapse to non-market socialism). Debt issued as preferential loans from a money-printer makes a company state-dependent/controlled apparatus even if its claim is that it is held privately.
The economy today is worse than 2008, much worse then the dotcom bust, and if you plot the trend with good data going back and starting around the 1970s, the trend shows progressive ruin as time passes, with seiving and consolidation occurring regularly. That is the force driving this problem, and it doesn't enable tech salaries.
> There should also be some reasonable government provided safety net so people can reskill/learn.
There is a limit to what government can provide, it takes awhile to get to those limits (we're in a super-cycle going back to the 1920s) but we'll be there in the next 5-10 years thanks in large part to deficit spending and the FED picking winners and losers.
The main issues with academia also applies to government. They are structurally the same. Education today is not about learning skills, that is always secondary to instilling the qualities a loyal unthinking worker. That is what the entire prussian-model of schooling is about (which is what we have in this country).
These structures for training follow the same structure as guild socialism, and the same intractable failures (ref Mises for related details).
It inevitably ends up being a cult of qualification, where you are automatically considered unqualified without a piece of paper even if you have the actual skills to do the job. Once a target market size is identified and reached, new candidates are put on an endless escalator of suffering with arbitrary filters/requirements where the claimed outcome is nothing but an unobtainable pipe dream.
Either wrong or a lie. You are not expected to "fully drain all your assets." Your primary residency is completely excluded from means testing unless you don't intend to return to it or it's above an very high threshold - most of the country it's about 2.5-3x the median home price and it is higher in HCOL states.
I'd give you that, but in exchange, you'll have to agree that, if I'm renting, I shouldn't have to sell any financial assets less than, say, the median value of a house where I am.
I feel like "Medicaid could be better" is a statement everyone can agree on, but my point stands that the meme that US healthcare is some Mad Max apocalyptic wasteland where you're completely on your own and left to die in the street is categorically false.
Not a single person in the US is denied healthcare based on inability to pay.
> Not a single person in the US is denied healthcare based on inability to pay.
This is not true. Emergency rooms are required to take you in and stabilize your situation even if you can't pay. Everything else is not available if you can't pay.
Think of something like cancer, which an emergency room can't treat since it develops over time. You will indeed be left to die on the streets if you don't have the money or coverage from somewhere.
> Not a single person in the US is denied healthcare based on inability to pay.
Yes, because that's the law. Then they hand you an exorbitant bill on the way out, which you can't pay. Then you get hounded by collections. Then your credit score tanks. etc. etc. etc.
Not everything is a direct line, the end result is the same.
Very generous severance packages and companies/laders should be commended for this. If it's a one-and-done big cut with generous packages to save the company, then good on them.
Somehow overhiring and maintaining said headcount long enough to need to do a 20% cut is probably less commendable, but not exactly an outlier there in the current climate.
I've always wondered about all these standalone "point solution" companies and how durable the model is. In the current climate of reduce M&A, and cost consciousness there is no one to sell to. And as the big platforms - AWS, Azure, GCP continue to grow.. it strikes me that more big companies would rather have a one-stop shop full of 80% solutions than pay for 100 different SaaS.
> it strikes me that more big companies would rather have a one-stop shop full of 80% solutions than pay for 100 different SaaS.
Strongly agree (unfortunately I might add, because I'm not a fan of "the big just keep getting bigger). When it comes to data management, tons of companies are really concerned about access controls, policies and DLP (data loss prevention). In my experience setting up these policies and rules correctly, and appropriately monitoring them, is very difficult and easy to get wrong (many data breaches are a consequence of this). This is especially common when you need to bidirectionally share content with third parties, you may want to give some of those parties access control rights on some data buckets, etc.
I was at a previous company where we were essentially all on Google Workspace. Google Drive's access controls for sharing with third parties used to really suck, though they've improved in recent years. We had teams that wanted to use Dropbox enterprise because their third party sharing features were much, much better. The problem is that I spent a ton of time learning all of the access control and management policies in Google Drive (which aren't great, mind you), and then I needed to spend another large amount of time learning an entirely different interface and set of rules for Dropbox. I almost had a breach because a checkbox buried down somewhere was checked incorrectly. Also, adding Dropbox meant I had a host of additional SOC 2 compliance checks that I needed to validate.
Meanwhile, sharing features in Google Drive (of Google Workspace) have largely gotten "good enough", as of the past couple years.
Case in point - when it came out almost 20 years ago it was ground breaking.
Meanwhile, every single desktop OS, mobile OS and cloud provider basically has had this functionality in some form for maybe 10 years now.
If you are a home user in Google or Apple ecosystem, its all native and seamless.
If you are a corporate setup in Microsoft or Google ecosystem, its all native and seamless there as well.
Not clear what the standout features of Dropbox would be now.
Severence is only so they can dodge regulatory scrutiny. They are not doing it out of the goodness of their hearts and was a line-item in the burden category for those employees when they were hired.
There's really no pleasing some people. Companies make cuts and don't give generous packages, they're evil. They give a package and it's just so they can dodge scrutiny.
All you are arguing for is that Dropbox should never have hired these people in the first place. Why is that better? At least these people got some years of high pay, experience, networking relationships, etc. Obviously it's disruptive, and it could be a big net negative for people who maybe jumped ship from more stable jobs only to be quickly laid off, but that's not the broad experience.
I suppose it's largely a matter of perspective but I would argue that fewer more stable jobs would likely be better for both the companies and employees.
Also, you're missing another obvious argument. Most tech companies that are doing layoffs could afford to keep their employees. Dropbox hasn't done 3 rounds of layoffs because they're on the verge of bankruptcy but rather they're just following the trend and pleasing shareholders or whatever.
So I'm not arguing for less jobs but rather less corporate bullshit.
>I suppose it's largely a matter of perspective but I would argue that fewer more stable jobs would likely be better for both the companies and employees.
How do you expect this to work? Companies hire because they think the extra man-hours is going to give them a competitive advantage. Companies agreeing not to compete each other seems suspiciously like a cartel.
They can still hire people and compete with each other? I'm just saying they shouldn't hire in mass quantities if there's a high chance that all of those people will be let go later on. It seems unethical to me but again it's a matter of perspective.
>They can still hire people and compete with each other?
That's still cartel behavior. If Google and Apple formed a cartel to fix handset prices, they could still theoretically compete with each other on features or whatever, but that'd still be a cartel.
"It's no secret that tech companies have not been hiring for sustainability and that sucks."
Does it suck? It means that someone got a job where they didn't really have to do that much and got paid anyway.
An alternative is where that job was never offered. And then we're complaining that there's no jobs.
Also, no, the solution is not to "just hire the perfect amount". Sure if we could just do anything perfectly everything is great, but how is that a reasonable demand.
What regulatory scrutiny do you mean? They don't need to provide severance, as far as California law seems concerned. I'm not a Californian, but an Internet search shows they're an at-will state. So it seems like everything is on the (legal) level.
California has the WARN act which I believe requires notice of 50 days, which people usually use to give severance. In the USA when someone is told they will be fired, usually we do not keep them on staff so severance is the usual middle ground.
It's 60 days, not 50. But 60 days of severance would be significantly less than what they are offering. They're definitely not doing it strictly to avoid regulatory scrutiny, more like to avoid bad press and a bad reputation in the tech market. When things eventually swing back up, companies still want to be able to hire the best talent, they don't want to be grouped with companies like Twitter.
Remember how there used to be a blog (or maybe it was a Tumblr, I forget) that documented every "Our incredible journey" post that inevitably announced the start-up's closure?
I think we need another one for "An update from <company>", as this has seemingly become the standard subject to use when you're announcing layoffs or data breaches. I saw an identical headline earlier today from Sony announcing a studio closure:
When a CEO takes full responsibility for these things it doesn't mean that they submit themselves to the punishment that internet users might want. It's the CEO telling their impacted employees that, no matter how well you did as an employee, you would still have been impacted. It's the CEO showing you empathy for the hurt they cause you for having failed to steer the company in a viable direction.
These messages are obviously never going to be well received, but at least people can find comfort in the fact that it's because Dropbox is shifting direction and strategy and not because they were bad employees. Stuff like this happens in business. Maybe you've focused on private sales and want to shift to enterprise sales or fund investments at which point your company no longer needs it's sales and marketing departments because the company mission will be radically different. Changing course is a CEO taking responsibility for the company.
I think a lot of people misunderstand the statement 'I take responsibility.' They are not actually taking responsibility for the company's situation. They are owning the decision to make these layoffs.
In what other realm of life does "taking full responsibility" absolve you from any consequences? It "shows empathy," what? Suspect: "I murdered someone and take full responsibility, and I empathize with the victim's next of kin," Judge: "Thank you for your candor all is forgiven, you're off scot free"
If a CEO did not take full responsibility, what would be different?
> In what other realm of life does "taking full responsibility" absolve you from any consequences?
Very early in my career I accidentally deleted every IP phone in the municipality where I was working. It was because they didn't have a test setup and the documentation didn't the SysAdmin gave me weren't updated. It was still my fault though and the first thing I did was to tell the IT manager thinking I'd get in trouble. I didn't. He told me he wasn't happy that I had deleted all the phones, but that it was good that I had come to him directly and taken responsibility.
Because when you take responsibility in the adult world, it means that you can work from there. As such it's both ridiculous and disingenuous when you compare a perfectly normal consequences of doing business with committing a crime. It's also a little weird to do so on HN considering this is a VC site.
>It's the CEO showing you empathy for the hurt they cause you for having failed to steer the company in a viable direction.
Nah, screw that. So may CEOs get told by workers this is a horrible route, drive straight into a wall, then show "empathy" for their bloody nose as they throw the passengers off a cliff?
That's not empathy, that saving face.
>Stuff like this happens in business
Stupid stuff always happens. Doesn't mean we shouldn't call out stupid stuff every-time it comes up. I won't accept "it is what it is" when livliehoods are at stake.
I always think it's a bit weird how people put so much effort and angst into (over)analyzing the language that execs use in layoff announcements in the first place.
It's a layoff. Yeah, it sucks, and no matter what the CEO says people will be pissed. Better to just take the same good advice as when starting a new relationship: "Just ignore everything they say, and only consider what they do." I.e. is the severance package good? Are folks given some assistance/recommendations finding new jobs? If so, I couldn't care less about what the preamble in the layoff announcement looks like.
>t's a bit weird how people put so much effort and angst into (over)analyzing the language that execs use in layoff announcements in the first place.
It's professional passive-aggression. That's more angering than just saying "we need more money, we are laying off people". That "language" is what you're expected to do in the office half your life and it's a tiring waste of time keeping up false pleasantries.
If you don't know, look up the Umbridge effect. Sometimes the petty evils that pretend to be civil stings harder than the pure evils. Not many of us have a Voldamort in our lives. We all have an Umbridge.
I'm always a bit confused by profitable companies with (presumably) large reserves laying off lots of people. I get that they want to remain profitable. But sure 500ish people could be put to some use? A new product, a new market, a spinoff. Whatever? Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?
It always seemed common sense to me that once a piece of software became stable and profitable you would need a much smaller engineering staff than when it was being built. The opposite seems to happens and orgs 10X their engineer headcount once they start making money.
It makes sense to keep some high performers and a few redundancies to stabilize/modernize it and make small improvements, but it feels like tech got really bloated with these massive corps who were trying to burn as much as they could to keep all the VC money flowing. Take like Uber having a team that built and maintained a chat app just for internal use, and every single big org having a bunch of teams responsible for various "some_dumb_name" that is the "custom X for 'Y'" where smaller teams just use the OS solutions to those problems.
> once a piece of software became stable and profitable you would need a much smaller engineering staff than when it was being built
This is not generally the case, except in monopoly situations.
Your software product generally has a competitor, and they're busy trying to make theirs better than yours -- whether with more features, better integrations, whatever it is.
So your staff size generally stays about the same in order to build more features desired by customers to prevent customers from switching to your competitor and you go out of business. And certain features, by themselves, can be more complex than the entire v1 of a product. And/or involve massive refactoring, etc.
The companies that get to reduce their team size are often because they're in a monopoly position, and then customers suffer because the software gets stagnant and the features they need don't get built. That's capitalism failing.
Also, something like an internal chat app isn't always a bad decision. If your company is above a certain size headcount, it can literally be cheaper to build small tools than to license them. Especially when you can more deeply customize and integrate them, which you often simply can't with off-the-shelf software.
>There is a good case to be made that what Dropbox sells is a commodity.
Is there? I argue Drive and OneDrive surpassed Dropbox a while ago. Box is dirt cheap if you came in early as well (I still have some 50 GB forever deal from like, 2012). And there's a dozen others if you look into it. It's not very hard to drop any one cloud storage solution (or all of them if you invest in a NAS setup).
The present value of your org is your old products, all futures gains are from new products. The tech industry is littered with tombstones of companies that sat coasted on the success of an older product. Conversely there's a fascinating habit of really smart people in the right environment (Google, Bell Labs, Xerox PARC etc) to create things of enormous value. Things that were just a side project include AWS, Slack, the transistor and transformer architecture. All these companies are really trying to be incubators for the next 100x thing.
What you are talking of is only possible in companies where the founder didn't take VC investment. Once you take VC money, you get on the treadmill of infinite growth to satisfy investors. That makes companies do strange things in pursuit of this impossible goal. Like hiring for the sake of showing growth in headcount, hiring people to branch into unrelated verticals, hiring people with big resumes just to say you have them on the team etc
Interestingly enough, I once worked at a company that saw how huge amounts of money could be made taking the exact opposite approach.
This all came about because this company had built a couple of hugely successful, and profitable, enterprise software products. So this company then decided to plow a ton of money into building out other products. The company was also pretty famous for having a high employee bar, and their college recruiting process was kind of legendary for attracting top CS and other tech grads.
However, this company discovered that building follow on successful products, even with lots of really smart people, is extremely difficult. As a not-perfect analogy, think of all the "one hit wonders" out there in the music industry. Beyond those one hit wonders, the vast majority of the rest are basically two hit wonders. Point being, once you've built a really successful product, even if you have tons of smart people, there is no guarantee that plowing money into another product will give you a positive ROI.
So this company realized this, and then saw there were a lot of other small-to-midsize software companies who were similar: they had one or two really successful products, but then were trying to use money from that to expand and grow into other areas, usually with little or no success. So this original company pivoted their business model: they went out to buy these "one hit wonder" software companies, immediately stopped any investment into other products, laid off as many people as possible and outsourced the operations and maintenance of the few successful products to low-cost locales (at the time, India and China) and then essentially just milked the subscription revenue until the product slowly petered out. That is, they weren't really investing in big new features in the product, but the product had a lot of existing customers who didn't (or couldn't) move off of it right away, so often they had at least a couple years of milking the existing revenue dry. I called it "the world's most successful and depressing business model".
My overall point in telling this story is that when you ask "Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?", that often times the answer is "Correct!" People tend to underestimate how difficult it is to build successful products, even if you've already knocked one out of the park.
Google has killed products that could be entire companies if they weren't attached to the Search Ads firehose.
A $100 dinner could be an annual splurge if you're making minimum wage, and an arbitrary Tuesday if you have a quarter million dollar salary.
Executives think the same way about revenue streams. When they have one product that makes $$$$$ in revenue, they think "not worth my time" to consider another that makes $$. Really frustrating for the people making and using the lower revenue product, but it's why Google feels like a "billion users or bust" company.
> So this original company pivoted their business model: they went out to buy these "one hit wonder" software companies, immediately stopped any investment into other products, laid off as many people as possible and outsourced the operations and maintenance of the few successful products to low-cost locales (at the time, India and China) and then essentially just milked the subscription revenue until the product slowly petered out.
well that's just a dreadful experience. Couldn't innovate so they instead became a very alluring anglerfish with no intent to help stimulate the American economy at all. Successful and depressing business model indeed.
Such a shame how little respect tech gets unless we're spamming buzzwords to rich people. really ruined the reputation of "tech will make everyone's lives easier!"
It’s better for cash cow companies to acquire startups with PMF and real revenues. Let the market experiment and then pay for the successes. Investors and founders win, the company doesn’t waste it pretending to be a startup. Any other cash should be returned in dividends or buy backs.
Was this Insight Software? I usually wouldn't ask since you didn't volunteer the name, but seeing as throwaway is in your username I'd figured I'd ask.
> I'm always a bit confused by profitable companies with (presumably) large reserves laying off lots of people.
According to their financial statement, Dropbox has more liabilities than assets. So yes, they have a large cash reserve, but with an even larger debt offsetting it its hard to argue they are in a good overall financial position.
I had a product manager at Salesforce tell me he went around trying to build support for a new reporting product. He was eventually taken aside by some coworker and told they don't build new products at Salesforce, and bought companies instead.
And they did indeed later buy multiple companies, including Tableau, in that space.
Which can make business sense if you take into account both the probability of the project failing to deliver a competitive product (always high no matter how slick the pitch deck is) and the probability that it gets no traction in the marketplace even if it is as good as the competition. Buying an existing successful product and its customer base can be much lower risk even if it is the more expensive route.
> But sure 500ish people could be put to some use? A new product, a new market, a spinoff. Whatever? Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?
I think a lot of the low hanging fruit in tech has been eaten up, bought up and consolidated, or actually was recognized as much more difficult and expensive than they actually thought. The leadership talent and vision in a lot of these companies is also painfully lacking. In short, to answer your last question: probably not. And I think they're terrified that Wall Street is going to notice.
I agree with both comments. ~500 can surely build some amazing tech, smaller teams have done more. I personally do think there's still a lot of relatively low-hanging fruit left, especially with the boom of possibilities due to AI, or simply what one can do with modern CPU/GPU performance, new browser APIs, modern tech factors, etc.
I also do agree and think leadership talent and vision in a lot tech companies is painfully lacking. This are the companies that could burn some money and use their wedge in the market to build some really cool things, but they wont. I guess to some degree, ironically, the money they're making might be part of the problem.
I mean, you don't hire 500 people to build something from scratch. You get at best 10 core leaders/founders for a tech, establish an MVP, then hire the other 490 to expand and scale.
Tho in honesty, 500 if overkill unless you really are tapping into some multi-disciplinary project that needs experts in a dozen backgrounds.
The "exhausted low hanging fruit" model IMO has been wrong since the industrial revolution. The fundamental problem is it's based on the heuristic of fixed demand + technology saturating the demand. It's really the opposite - technology is an ever expanding fractal, and the larger the surface area, the more things are needed. For example compilers are having a huge boom now because hardware is increasingly performance demanding and heterogeneous.
It's easy to find new uses for technology. The hard part is turning the new idea into a commercially viable product. And it's even harder to find a business model that doesn't destroy the product in the long term.
The whole is often more than the sum of its parts. A company is not just a bunch of people, but it's also the company culture and the established ways of doing things. It's common that a company can't make something work, but the same people in another company could, because they can organize their labor in a different way.
Software development is often an investment. Hiring a developer is often an investment. Most companies eventually reach the point, where the rate of investment slows down and the company chooses to return the profits to the shareholders. When the company no longer believes that it can invest the money more profitably than the shareholders could, it's rational to lay off people working in R&D and use the profits for dividends or buybacks.
Remember Better, the mortgage company? They were briefly notable for laying off 900 people on a Zoom call. However, no-one asked why a re-envisioned mortgage application/process was failing in the best possible market. My opinion is Dropbox most valuable commodity is the millions of Windows PCs with a system level scheduled task that is vulnerable to "hijacking"... basically they are a data stream.
It was not failing in the best possible market. Better was a successful lender for mortgage refinancing. Better struggled to establish itself within the purchase market which has far more complex relationships.
And once 30-year mortgage rates got to 5% or higher, the refinancing market basically dried up. Without much of a purchase mortgage business they basically had no business, regardless of how much better their technology was.
It may well be that there is no alternative. Maybe Dropbox did try everything, maybe tried to let those 500 people work on producing different products or on finding other sources of income, I don't know. And I get that it's important for a business to keep itself afloat. But it's a recurring phenomenon in larger tech companies that I find puzzling.
Many of the answers in this thread have been perfectly reasonable. And I'm probably kidding myself when I think that "if I were that CEO, I'd do things differently".
Five or 10 years ago, they were doing a lot of this. Dropbox Paper ("a collaborative online workspace that allows you to create, share, and edit documents and notes with your team") for one. It's still active but it never took off. I was just notified that there is some sort of migration taking place which is probably related to the RIF.
Dropbox was barely cash-flow positive (basically meaning profitable excluding equity compensation) when it had its IPO. It's been having trouble expanding from the consumer space into the business space, and I wouldn't be surprised if its profits are slim.
Also, they've repeatedly tried to create new products. Carousel, Mailbox, and others. Dropbox has had little to no success outside of its core business. While it does that core business very well, it has stiff competition, and the market seems to be already tapped out.
Why not? Some companies do try this. It rarely succeeds though. The reason is that re-education en-masse, restructuring of the chain of command, re-allocation of resources are hard. Most businesses at some point enter the phase where the inertia is the strongest driving force: they only need to apply a tiny fraction of initial force to keep the lights on. At this point, trying to restructure is bound to be very hard.
Maybe, if the company can foresee and realistically assess the problems it's about to face, it may gradually prepare for the transition. I've seen this happen at my friend's job at Dell storage division: some storage product failed, they tried to reshuffle the teams to start working on something else, with some code reuse from the previous one. It still didn't go well, and a lot of people were still let go (because the initial effort of developing a new product cannot really accommodate an army of various kinds of extra personal that's necessary for mature product). They sort-of survived, but with a huge loss.
I feel like leadership and vision are lacking at DropBox, so they don't have any good ideas of what to do with the staff they've got.
They should be exploring new opportunities which leverage the skillset of their existing employees, this would diversify them from the effects of OneDrive and GDrive.
For example with AI alone we've seen an incredible number of new file services dedicated to just serving models, and DropBox has totally ignored that need.
Instead they regularly add bitsy, poorly implemented, "us too" features to DropBox which adds friction to common workflows - then provide no way to customise these features away for people who do not want them.
Perhaps to them they see this as evolving the product and keeping it relevant, but their approach doesn't address why Google and Microsoft are eating their lunch, nor does it take their eggs out of one basket.
Those employees were costing more than the value they were creating.
If the marginal product of labor is lower than the marginal cost of labor, the company should reduce headcount. If higher, the company should increase headcount.
Whether in the long term this is net-beneficial for a given actor in the typical case, is at best unclear. This marginal-labor-cost/benefit-in-a-given-moment accounting misses a large proportion of the harmful effects of a layoff.
When a bunch of companies in one sector do it, it does lower wages and reduce labor power to e.g. demand better working conditions. That part, is a benefit for companies. But it's not the result of one company doing what's best for their particular situation—it's a result of coordination, even if only by the understanding that "this is what you do, when there's an excuse to, and especially when you see others doing it". It's merely best practice then, not... collusion.
Arguably the value they were creating was influenced by the direction and application that labor was directed at. Redirecting that available labor at something more valuable would fix that as well wouldn't it?
Yes, if there is something more valuable to redirect the labor to and my intuition is that there is not, I mean not in the Dropbox business.
2640 employees seems like a ridiculous number for a company like Dropbox. I work at a company that's about half of that and you wouldn't believe how many different services this company runs and I still think there's a lot of inefficiency.
If companies wanted efficiency, they coould probably spend $400k to 10 engineers and get the best of all worlds. That's going to be cheaper than hiring a team of 50 @100k of varying quality.
Except when the engineer leaves for a $500k postion. Companies basically moved towards this churn market in a way not as far off from an assembly line as you'd expect. They prefer some inefficiency if the cogs are easier to replace every 1-2 years.
Yes, but not in a way that blames the workers. If a product improves but margins don't (because say, interest rates), you have employees who all perfomed above expectations that can still get taken off because the current environment can't make money on anything through consumers (who are getting less buying power and cutting non-essential services).
I'd hope tech workers on a community like this could empathize with other tech workers in such an environment.
But which people: the sales/marketing, the developers that actually make the product, across the board? At some point, development gets to a stable and solid product, so revenue increases come from staffing up sales/marketing. So does that mean you can reduce the devs to try and increase new users or that you've overstaffed the sales/marketing? Maybe there's just too damn many middle managers? Will the cutting be a surgical blade or a broad axe?
The company could put them to some use, or they could get capital and launch their own ventures. It's equivalent from a market perspective, except the one you suggest requires unnecessary coercion (forcing the employees to work on something they may not have signed up for).
At the end of the day, the american market place is distinguished in that venture capital, especially in tech, is very accessible. Being laid off seems to be a bonus in the hunt for VC money.
It's the same reason companies return dividends. Sure, they could use the money for R&D and launching a new product, or they could send the money to investors so that they can scour the marketplace for a new technology of their own choosing for investment. The first one unnecessarily takes investor money for a project they may not have signed up for, whereas the former maximizes their freedom to invest in what they find interesting
Every new product or market usually also needs additional investments, maybe even new workers with relevant domain knowledge. And Dropbox did try new products and markets, but what if it's not working out? Should they continue until money runs out?
And some interesting part of this announcement is the mentioning of the grown overcomplex management. This kinda smells of some shrinking for health-benefits. For some reason or another, they grew into a wrong direction, and maybe now remove the unhealthy parts to be able to operate better.
Often they target the lowest performers for such layoff. Of course they rarely succeed in doing that, but the idea is that these people should have been let go anyway but weren’t for various reasons.
> Often they target the lowest performers for such layoff.
In my experience, this is often an after-the-fact rationalization by people who "survive" layoffs to explain them, and a convenient justification by leadership for layoffs. If you've ever been in the room when layoffs are planned or discussed, the actual process is way more focused on blunt cost, personality of the people involved or on the chopping block, and is often practically a tossup considering "performance" is not really a clear or meaningful metric (actually, more often it's arbitrary for most companies --- they will find the metric they need to justify laying off someone). This phenomenon is greater the bigger the company and the more abstracted managers and leadership are from their lower level employees.
In many cases it can actually be inversely proportional to performance, since the one factor they can count in black and white is how much the person costs. Laying off someone making a TC of $500K probably feels like you're saving the company a lot of money, but its also possible the reason they were making that much is because they were more than twice as productive/valuable as the person making $250K. But salary and benefits are easy to quantify, and performance is not.
I've heard secondhand that a few layoffs of star players was as messed up as "well Suzy is pregnant, but we need to axe someone else to justifty it as being coincidental". It shouldn't be surprising at this point, but companies can and do go that far sometimes just to cover their tracks. slicing their nose off to spite the pimple.
Many times the marching orders were to fire the high earners, assuming that the remaining, less well compensated workers, could together do the same work for less.
Why do people still think like this? Have we not had enough layoffs these years from nearly all companies in tech with so many configurations to realize that this isn't just targeting new or incompetent people?
I'm a libertarian in most things but I still don't like layoffs from profitable companies.
Like it's probably not good for our society that people have to up end their life every few years and probably move to find a new job.
Both my parents stayed in the same
job for their careers and it meant they could stay in the same place, have kids, build ties to the community, etc. Seems important if you want to not die out as a society.
> Like it's probably not good for our society that people have to up end their life every few years and probably move to find a new job.
The thing is, Dropbox is done (as in feature complete). Like when the construction of a building completes, many people are "laid off" because they aren’t needed anymore. Yeah, you need to keep some people around for things like maintaining the building, but not to the scale of the original workforce required to build it.
It is "good" that the excess labour is freed up to go work on the next "building". What may not be good is that the workers didn't think to associate with each other like construction workers do. Construction, being a much more mature industry, typically keeps a clear separation between the workers and the building so that then construction is done the entire excess group of people can be lifted on to the next project instead of all going their separate ways.
Software will undoubtedly go that way eventually. But it is, in the grand scheme of things, still early days for it as an industry. We haven't yet learned the lessons that older industries have.
Interesting insight about construction. I think you're right.
We see this ad hoc in software now. When there is a mass layoff, someone will go get a new job, and then try to bring on all of their previous coworkers. Or a group will go off and start a startup which (if they're lucky) will get acquired and they get to keep working together.
Which now makes me think, if you're a big company, maybe it behooves you to offer a highly functioning team a seed round instead of individual severances...
>he thing is, Dropbox is done (as in feature complete)
Dropbox is "done" but Dropbox didn't employe 2700 people just to work on dropbox.
They toyed around with other services, weren't as gamebreaking as dropbox, and in hard times (not necessarily for their business) they deided to just abandon those other experients or products. This isn't some "the job is done" scenario, it's "we're hunkering down for the storm that we pretend isn't happening out loud" scenario and people are still falling for the idea that "the economy is soaring". It's disgusting.
>It is "good" that the excess labour is freed up to go work on the next "building".
sadly there is no "next building" in these times. When everyone is "feature complete", you just have a purge, not a new opportunity.
>Software will undoubtedly go that way eventually.
given the 3rd wave of attempting to outsourcce large software out, and the AI bubble, I don't think companies are ever going to truly appreciate proper mature software. Just the bare minimum to pretend the machine is running until the next CEO deals with the fire.
Software engineering, as profession, offers a very different kind of capacity compared to professions found in the construction industry, though. The physical resources for buildings are expensive and rare (land, material etc), whereas compute and storage are literally getting cheaper by the minute. The Silicon Valley dream of getting from garage to unicorn within months might be far from realistic, but still way more probable that in any other industry. Quick prototypes can be built in days and it isn't uncommon for graduates to finish their research with a viable business idea. I never seen that in my circle of architecture friends.
> Both my parents stayed in the same job for their careers
My father was the same, BUT.. this is an INCREDIBLY risky thing to do career-wise in the modern era. Given how much tech advances and that we actually face international competition that a lot of our boomer parents didn't during their career, I don't see really any going back either.
Some of the worst layoff situations I've seen were guys who worked in the same company for 25 years.. long enough that their knowledge & skills was too company-specific, but not long enough to retire. Just because someone seems indispensable doesn't mean they are safe.
Having to drain savings for 1-2 years jobless after a layoff in the last 10 years of your career and reset at a probably lower salary can set back your retirement 10 years.
Fully agreed - yet, we as a society consistently and systematically trade (or let "others" trade) much more critical aspects of life, such as quality of air, water, food etc. for short-term profits, even though that very often has no clear/direct positive impact on any other comparably valuable aspects of our lives.
So it's no wonder that "some people losing their jobs and needing to move for a new one" is irrelevant, when the only goal is profit maximisation, even though we don't even understand what for.
Dropbox my one critique is can you please make it affordable again. I just can't justify the cost as there are cheaper services out there. I don't care about PDF signing etc. I fear OneDrive/Google Drive are eating you lunch because it's a hard sell to be competitive against them price wise.
I left Dropbox when they added (and preemptively enabled) a checkbox that shared your data with them for AI training. I refuse to do business with a company that will just unilaterally invade my privacy like that. They can make it as cheap as they want, I'll never go back.
Selling data is always the last play for all businesses that have data.
Either you never give it to them in a way that can be sold (e.g. fully encrypted), or you expect them to sell it when the leaders need to increase cash flow.
The article Lammy linked is indeed the correct one. When that bit of news came out I checked my account, and it turned out that Dropbox had added and enabled the toggle without my consent. I was a paying customer mind you, I paid like $120/yr for my storage. After they pulled that crap I started working on setting up Nextcloud hosted in a VPS. It's more expensive, but Dropbox permanently burned my trust when they did what they did.
> “For eligible accounts, […] The Third-party AI toggle is turned on”
I just logged in and checked and don't have the "Third-Party AI features" tab, but I only have an old free account and am probably not at the tier where this appears.
That feature doesn't train the model on customer's data though, unless I'm missing something.
I agree it's annoying it was enabled by default in places, but I'm trying to either correct the incorrect "for AI training" part, or find a citation that shows they are actually doing AI training with it.
Exactly!!!
I stopped being a customer when they lost touch with their customer base. They decided to become something else, adjust plans however they thought, introduced useless featured and all these while riding the money train.
I feel sorry for those being laid off, it’s not immediately/directly their fault. It’s the management and the product responsible that should take the blame.
A feature of what? Surely Jobs didn't expect a feature of Windows, OSX, Android, Linux, and ChromeOS to all seamlessly interact with one another.
I don't doubt that Jobs might have seen Dropbox as a feature that Apple could have implemented across the Apple ecosystem, but that's a pretty limited view of where the value of Dropbox lies.
Why is iCloud different? For the Apple ecosystem, interaction with Mac/iPhone/AppleTV is all that matters. Which is why I don't subscribe to the garden. But it's a reasonable perspective of Jobs that doesn't conflict with this statement.
But it's a reasonable perspective of Jobs that doesn't conflict with this statement.
That's what I'm saying. From Jobs' perspective it was a feature for Apple, because Jobs believed only Apple devices matter. For everyone else that's a pretty limited view of the world that doesn't really apply, and measuring Dropbox (as a company) by that standard is nonsensical. It should be obvious that there's value in sharing files more widely than just within one ecosystem.
It's a product that I was willing to pay for (until I required native E2E encryption). _iCloud Drive_ is a feature, mostly — aside from the fact that you still have to pay for it to be useful, so kind of still a product.
Steve Jobs was wrong about many things, and this was one of them.
I'm responding to the person who quoted Steve Jobs by saying Dropbox isn't a product, it's a feature. 17 years is a really long time on the web, and Dropbox has not only been a product, but a successful publicly traded company for most of that time, during which so many other "real" products have risen and fallen. The fact that you subscribe to Google One doesn't tell me anything, except that Google created a product to compete with Dropbox, which is also a product.
Funny how Hacker News spent the past 15 years laughing at anyone questioning the viability of Dropbox as a business, but then after two years in a down market half the site is begging them to be cheap again.
What's the matter? You like the sound of that crusty, slow Linux NAS that this site has derided for years?
>You like the sound of that crusty, slow Linux NAS that this site has derided for years?
Honestly, it's a lot more enjoyable than I expected. Internet enabled, easily expandable (my setup is 5TB), can quickly setup a plex server for media, and can easily up/download any files needed from anywhere I have connection. And I feel I only scrathed the surface of potential. One of the more useful investments I made this decade.
> Impacted employees will be eligible to keep company devices (phones, tablets, laptops, and peripherals) for personal use.
It's not often you see this. Netflix used to do this if your equipment wasn't brand new, and with any phone[1]. And the very first startup I worked for let me buy my laptop, desktop, monitor, and cell phone for $50. But you don't see it too often.
[1] There was a "joke" at Netflix that if your manager told you that you should upgrade your phone, it meant you were gonna get let go soon, because sometimes people really did get let go just weeks after getting a new phone, and they got to keep the phone.
At a former employer I (voluntarily) left. I ended up spending a good couple hours driving my 7-year old laptop which I rarely used to a FedEx dropoff and I'm sure it was promptly recycles. But I wanted make sure all the loose ends were tied up.
on the opposite side, I had some nearby management literally come to my house 30 minutes after my layoff to collect my equipement. I didn't even have time to process the layoff; I had to disconnect my entire setup, lug it downstairs, and have it ready to lug into someone's truck faster than I could order a pizza.
That's just petty and one would think nearby management would have better things to do. Whether or not people "should" a lot of folks have their personal and work stuff pretty intermixed and need time to disentangle and may not even have a personal laptop. I guess there could be an element of not wanting to give ex-employees time to copy off work info but still (and, if they're that worried, they should be able to just do a remote wipe)... I've always tried to make a point of keeping an off-work copy of anything I want to keep and isn't confidential.
The "core" demographic of HN probably sees this as standard, if they were ever laid off to begin with. The commenters at the very least seem to be (or claim to be) on a very high end of tech that doesn't realize that not all US layoffs give you 3 months severace standard.
The linked article is specific to executives and kind of confirms what most are complaining about here.
> a 10-year study of over 2,600 leaders showed almost half (45%) suffered at least one major career blow-up — like getting fired, messing up a major deal, or blowing an acquisition. Despite that, 78% of these executives eventually made it to the CEO role.
An executive can make a series of awful decisions and still advance in their career.
Seeing the article dating 2018 told me all I needed to know about how out of touch it is with the current market.
I wouldn't wish for you to get laid off to understand thee current circus, but I'd urge you to at least spend maybe an hour in some of the "Who wants to be hired" threads to understand the scale of the impact, and how even HN workers can be struggling.
If that holds true (and not sure that it does), then it also holds true for when you decide to get another job, on your own terms, rather than being forced into it.
>Industry standard is to offer 18 months of COBRA, not 6. Job searches frequently take way longer than that.
job searches taking 6+ months is exactly why this whole process is broken. I I could get quick rejections and considerations, being laid off wouldn't even be that bad.
TBH it feels like Dropbox has a pretty fair earnings multiple at the moment (~4X). Have we reached a point where tech companies have been around long enough that they can / should enter a sort of maintenance mode? It feels like there is a company version of the Peter Principle. Why do they (Dropbox specifically) need to continue to "innovate"? Wouldn't it be better for all parties if they just focused on maintaining the best possible version of their core offering at the lowest cost? Maybe Dash (or whatever) will work but most likely it won't, and investing in that initiative puts their whole business at risk.
There exists such a mode: it's called dividend distribution. But currently DBX and many other tech companies aren't paying any dividends to stock holders. So if it's not growing and not paying dividends, what is the company doing?
Alternately we have entered a phase where layoffs have metastasized as a thing to do so much that executives are being asked about it. "We've noticed you haven't done any layoffs yet, can you explain that?"
"Wouldn't it be better for all parties if they just focused on maintaining the best possible version of their core offering at the lowest cost?"
Yes, absolutely.
There is value in new features and functionality but there can be so much more value in a predictable, stable tool that can be depended on and returned to.
There are people who cancelled their first account with us before dropbox existed and have returned, post-covid, to find a familiar tool to be picked right back up again.
This has been immensely valuable to a great many people and we wouldn't dream of ever changing it.
Would the CEO resigning or getting laid off, make your situation any better if you were one of those laid off?
Feels like a weird hill to die on, and more like a crabs in the bucket mentality that doesn't change anything in the grand scheme of things. In the end I'm still unemployed and whatever happens to my ex-CEO doesn't change my situation one bit.
As I grew older and experienced my share of layoffs, I stopped caring about what happens to those responsible for me getting laid off, as my energy is better spent on improving my situation and my life instead of ruminating how Krama vengeance would make me feel better.
> Would the CEO resigning or getting laid off, make your situation any better if you were one of those laid off?
No, of course not. But he is the leader, and he guided the company to a point where certain areas became "over-invested or under-performing." In other words, he didn’t do a good job. So, it should be him stepping down. Nobody ever said being a CEO would be easy.
>and he guided the company to a point where certain areas became "over-invested or under-performing."
And now he's fixing it by cutting those under-performing areas.
>So, it should be him stepping down.
Why? How would that help the company get better? Do you think competent CEOs are like cogs that you can pick a new one from the stack of LinkedIn applications whenever the old one makes a mistake, and then slot him in the existing machine and everything will magically work better?
>Nobody ever said being a CEO would be easy.
Exactly. That's why you don't rush to replace the devil you know with the devil you don't.
Why don't you start your own company so you can be a model angelic CEO then? Why bother working for these "evil" guys? Or work for a local mom and pop shop instead of a publicly traded company?
I ran a business which is why I know how hard it is and why I prefer working for someone else and accepting the trade-offs. You're the delusional one here wanting to have your cake and eat it too.
It wouldn't, but it'd reassure me I wasn't some expendable pawn and they are preteding to be responsible. A company trying to cut back on the highest paid workers who will still survive shows a captain willing to drown with their boat.
but it doesn't work like that in the western world.
>As I grew older and experienced my share of layoffs, I stopped caring about what happens to those responsible for me getting laid off, as my energy is better spent on improving my situation and my life instead of ruminating how Krama vengeance would make me feel better.
The tree remembers. If I have nothing else it's my pride for my craft. I'll probably never have some revenge arc, but I sure will take it personally the next time that company tries to make deals with me later in my career.
Call it cultural; I don't like being treated as a slave. Respect your fellow man, regardless of background or walk of life.
>but I sure will take it personally the next time that company tries to make deals with me later in my career.
You don't do deals with companies who fire people? You wouldn't be working for any company in the world then. IIRC in communism they never fired people, maybe that system will serve you better. Oh wait...
>I don't like being treated as a slave.
"Sent from my iPhone sipping my latte in California"
I wish you all spoiled rich western workers would stop using the slave word so easily whenever an employer does something to you, as it dilutes the meaning and the severity of the word. Similar with the over misuse of the words woke and nazi.
Please read up on what slavery actually meant and the lives of actual slaves. Working in tech in the richest country in the world, and being fired by Dropbox isn't even remotely in the same ball-planet as slavery.
That's a really positive attitude, to not fixate on retribution -- kudos to you!
I'd like to point out that there are other possible outcomes, like (say) the CEO and entire C-suite cutting their salary to $1 for a year (it's not like this will render any of them homeless).
IMHO, that would actually constitute "taking full responsibility", as opposed to parroting words that don't connect to the reality of the situation.
I don't know. As you said, it's a waste of energy to wonder about other people and their endeavors. Better to focus on me.
And I need the money. CEOs don't. Feels odd to go from "don't spend your energy thinking about other rich people" and then go "but rich people 'want' money" when someone makes a suggestion.
>Have the stress of running a company while working for free? Who would ever want to do that?
Again, don't know. But I suspect that most people at a CEO level are not just in it for money. There's easier, less stressful ways for millionaire to accrue money.
>I don't know. [...] And I need the money. CEOs don't.
That's some silly delulu shit right there. Imma end this conversation with you right here since you're not arguing in good faith as you've already made up your mind, so it's a waste of my energy and time to continue this any further.
What did you expect productive about this whole conversation?
Did you expect to see the magic formula/solution to people getting laid off from well paying tech companies and somehow I got in the way of that?
We're all just chatting here speaking our minds which has the real world practival equivalent of shouting into the void. There's no real value to be had here.
As CEO, it's his responsibility to make/approve the decision to do the layoffs, or not. The buck stops with him. That's all that it means. It doesn't mean he's liable for any hardships.
If "responsibility" only constitutes "I pull the trigger, and I don't care what happens as a result", then that is a fairly weak kind of leadership -- ostensibly not very different from a child doing whatever they want in a consequence-free manner.
I want to believe that "responsibility" not only constitutes "I can make things happen", but that "I am willing to Make Things Right if my actions cause things to go sideways".
If I'm wrong, then we live in a world where "taking responsibility" means "using power", and "I take full responsibility" means "yes, I used my power to do that" and that's Not Good Enough to call such people "Leaders".
Layoffs are a fact of life with businesses. It sucks. I'm sure these CEOs do not enjoy doing it, but someone has it in their job description (i.e. the responsibility) to make those kinds of decisions.
You may have it in your job description the responsibility to do performance reviews on your reports. Those reviews can make or break a career. If you do them honestly and with the consideration they deserve, you should not be expected to personally bear the consequences of giving someone a deserved poor review.
It's too bad we don't live in a perfect world where everyone has a job and is never at risk of losing it. But if wishes where horses.....
If that was what responsibility meant, then by definition any CEO is fulfilling their responsibility.
The moral meaning of responsibility here means that the CEO takes responsibility for the lives and livelihoods of those affected -- which does feel a bit hollow when the CEO presumably is not only not affected negatively, but probably will be rewarded for increasing shareholder value.
My insurance companies and government definitely share that opinion of responsibility. So, yes. But my answer remains "take responibility and mean it".
I'd love to hear you explain how I can get out of paying my car insurance of alimony though with this line of reasoning, though. Could be useful one day.
CEOs are responsible to the board of directors and shareholders. The BoD and shareholders are who choose and remove CEOs and you can bet both are considerably displeased when the company isn't as profitable as they expect.
That's the best part of modern tech markets in a not-recession recession. They are still profitable but will layoff because it's fashionbble or to make more money.
These words mean nothing really. I expect the next CEO to not use meaningless phrases. How does "taking responsibility" works in his case? What does it even mean other than PR fluff?
why would you expect the next CEO to not use weasel words? it's like they all go to the same "mom school". they all go to the same tailor to make teflon suits so nothing sticks to them, and they all learn the same "rain in spain falls on the plain" dreck.
No, responsibility is not a word. Responsibility is an action.
If I'm on-call, I'm responsible to carry my laptop with me and be available immediately to fix critical issues. I don't just say "I take responsibility of being on-call", and the leave my laptop at home, get drunk and fall asleep in a bar for the weekend. That's called being irresponsible.
I see. But that's still like doing your job. I do my job for being on-call by having my laptop with me and phone on, etc. If do my job badly I get fired.
So this CEO is saying, "if I do my job poorly I understand I could get fired."
But, did he/she do their job poorly? That's the thing I can't figure out quite yet. It seems it was bad for the laid off people, but maybe not for Dropbox?
>"if I do my job poorly I understand I could get fired."
If I got a million dollar parachute when I do my job badly, I would love to "take responsibility" as well. Fuck the people, I get paid either way here.
> But, did he/she do their job poorly?
in a fiduciary sence short term, no. So shareholders are happy since that's all their care about.
Long term, who knows? I don't see them closing the gap with Google nor Microsoft so this could just accelerate that downfall.
in a spirit of, as some politician say, "creating jobs and stimulating the economy", absolutely awfully. We have 500 more workers out on an awful job market and it's not because DBX wasn't profitable. They simply dropped workers to prepare for a bad time that the US economy doesn't want to admit out loud.
A 20% layoff means either the market changed very very quickly or something went terribly wrong in the company strategy. Here it's the second scenario and I'd expect the CEO to be on shaky grounds after such bad results.
There needs to be more explanation on where the CEO screwed up that badly and the consequences for the management.
At the very very least, they should be explaining how Dropbox is suddenly a 20% smaller company, because either that means the market has contracted by 20%, or Dropbox has shit the bed as a competitive entity in said market.
Both options should directly imply that the CEO should earn less. Either you're running a smaller, simpler company, or you sucked at your job.
Actually they don't. Well run companies have cash reserves and expect to have periods of ups and downs. They don't pray to the alter of the next quarterly report.
They do it to suppress wages, not only because of economic instability. It’s worked - wages are down across industry. Wage suppression is one of the responsibilities of a well run business (the CEO together with HR hires consultant help for this or they hire a benefits and wages role, and it’s referred to as market positioning)
It's pretty cynical to say that wage suppression is one of the responsibilities of a CEO. But perhaps not off the mark.
If only we had the equivalent on the other side to balance the equation. Some kind of a group of individual employees, who work together to counter wage suppression efforts.
historically in tech, that group is some new competitor that "disrupts the industry" and either becomes a new power respecting talent for a while, or gets bought out by a megacorp and given that huge salary once again.
That's really the main saving grace for this industry; the scalability that a few employees can still provide a solution that makes corporations with hundreds of thousands of workers sweat. That's why they surged salaries so aggressively in the 00's and half the '10's
That's also the reason why unionization will be a hard argument among tech workers. Slowly starting to happen in the games industry, so that at least confirms there IS a breaking point somewhere for that to happen.
not saying I should go work for McKinsey, just noticing that unnecessary payments are likely happening. companies don't exist to employ people. employees exist to help companies. just make everyone a decent shareholder with decent liquidity and move on when the employee isn't necessary.
>companies don't exist to employ people. employees exist to help companies.
Companies in society exist to serve the customer, provide labor opportunities, and overall stimulate the economy (all of which is needed to make money).
This mentality above is exactly why the latter half of Millensials and Gen Z were demystified by the labor market and simply don't take the kind of "loyalty" narrative of the older generations. You can't talk family, layoff "family" every 2 years regardless of talent and pretend that "hard workers get rewarded". So you'll get the bare minimum, you will get no overtime when you request it (especially if you aren't paying 1.5x), and you probably won't even get the long dead 2 weeks notice when I move on.
You can't expect much more "help" when you can't give the basic modicrum of respect to your help.
> just make everyone a decent shareholder with decent liquidity and move on when the employee isn't necessary.
They should make whole those affected, as best as possible. The CEO, who is the responsible party by their own declaration, should distribute their personal wealth to those affected until all parties have approximately the same amount of wealth.
How about describing what exactly taking full responsibility means for them in that particular situation?
Saying e.g. what is the impact on the situation for those responsible might be nice - no bonuses for next year? A plan in place so that this doesn't happen again? Stepping down as a CEO?
I mean, if I take responsibility for e.g. wrong tax filing, I pay the fine penalty, and/or go to jail.
Saying "I take responsibility" some kind of failure while having no consequences for said failure is not taking responsibility.
I dunno. It may take 1-2 months to prepare for Leetcode style interviews, and this can be pretty mentally exhausting. Every time you fail to solve a leetcode question, it feeds your imposter syndrome, which is probably even worse due to getting fired.
If companies just accepted good programmers and were frank with themselves that they are not going to find rockstar 100x programmers for half the market rate, Leetcode would be acceptable.
With all due respect, that sounds like a personal shortcoming to me. One can (and should) not take interviews personally. One also can (and should) be able to acquit oneself well at an interview even without prep time.
> One also can (and should) be able to acquit oneself well at an interview even without prep time.
I don't agree. If you don't prepare at all for an interview, it shows. Aside from leetcode, it's also important to research the company.
My point is mainly that I might be upset if I were in that group that's laid off today. I don't want to prep leetcode for several weeks. It feels like a waste of time.
I've never prepared for an interview in my life, and I've never had any difficulty. Anecdotal of course, but I think prep for interviews is vastly overrated.
You're telling me you maintain the ability to pass the various interviews that the modern FAANG SWE gauntlet requires year-round? Good for you if so, but this doesn't match the experience of any of the folks that I've worked with across my career.
Who said anything about FAANG? I don't work in that world and in fact you literally could not pay me to do so. It seems miserable as hell. But Dropbox isn't in that world either. And in any case, I've never ever had to prepare for a job interview at all, let alone for multiple months. They aren't that hard in most cases.
Wow, that's horrible. And you might even have to stay at a 4 star instead of a 5 star resort in Bali when you take a vacation during your severance, job market is tough.
Even worse, you might have to miss one contribution to your FATfire investment account to deal with the extra risk. Compounded, that missed contribution might mean you'll have to retire at 46 instead of 45.
How dare these companies treat these people this way. They took the massive risk of working for an already-successful company at $250K/yr with a $200K stock package, and now fat cat Drew Houston dares to leave them with just an abnormally large severance after they are no longer needed.
I don't think your tone aligns with the community guidelines[1]. Please consider not being snarky and sarcastic but actually responding to the merit of what people say here.
>I realized though that I was probably going to be okay
I thought so too... that was 13 months ago.
I still am okay, but only by pure blind luck. And okay in a "rice and beans diet" way. The actual interview gauntlets are worse than my first job search.
And yes, luck = preparation x opportunity. But I was literally cold called by a founder. My experience spoke for itself, but it only helped me tread water instead of sink into the abyss. Sure didn't work the other hundreds of times I kept searching.
>Sometimes the contrast of "sarcasm" is the only way to shake you out of your bubble and give you that perspective.
Again, the guidelines
>Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes.
Assumptions are horrible on the internet because it only enrages those who do not fit your strawman. I did everything "right" and I end up laid off twice, draining all my savings and a bit of my stock, and being gaslighted for over a year when I could grab multiple offers in 3-4 months the last few job hunts.
I work in games, I'm not making 500k salaries and was well prepared for layoffs. but I was doing very well for myself. So it's tiring hearing people deride my decade of experience with "well maybe you weren't actually a good worker". I'm definitely not a 10x-er, never have been. But it's backwards hat I have more experience now and am desired less for my experience.
It's just bad times. The sooner we can accept that, the easier it'll be to come together and weather the storm. But with layoffs it seems like all the elitism comes out instead.
This is a bullshit package because of the healthcare.
I was laid off from a different company with access to 18 months of COBRA. Dropbox is offering a third of that. Lots of job searches take longer than 6 months, so the employees are going to be left high and dry right when they need it the most.
For the non-Americans, my COBRA expenses are about USD$2,000/month for me and my partner. I’m paying as much for healthcare as I am for rent. Even so, it’s still financially better to take COBRA than pay out of pocket for my prescriptions.
I wonder if they meant paid COBRA of 6 months, bc 18 months is like the minimum to offer continuing coverage. COBRA coverage is a Federal Law for large employers.
"Q11: How long does COBRA coverage last?
COBRA requires that continuation coverage extend from the date of the qualifying event for a limited period of 18 or 36 months. The length of time depends on the type of qualifying event that gave rise to the COBRA rights. A plan, however, may provide longer periods of coverage beyond the maximum period required by law."
All West Coast states have free healthcare (medicaid) available if your income is below a certain threshold. And there is no time limit on that. It won’t help with rent, but at least these folks won’t be completely without healthcare access.
There's pretty much no way they'd qualify for Medicaid if they were a dev at Dropbox. The income limit for Medi-Cal is $20,783 for a single adult, $28,208 for a household of two adults. Chances are they were past that income limit the first few months of the year. You don't just immediately qualify after making $140k annualized for the first 10 months and then hit $0 one day.
Plus, they're getting 16 weeks of salary. At $140k/yr, that's $2,692/wk. Lets say their severance starts next week. There's 8 weeks left in the year. So they'll get 8 weeks of pay in 2025. $2,692 * 8 = $21,538. So no, they won't qualify for Medicaid at all in 2025 if they make that much as a single person.
True but even making $140k/year does qualify you for tax credits on ACA marketplace health insurance plans. COBRA is kind of obsolete, honestly. You should be switching over to a insurance plan purchased through your state's health insurance marketplace.
Totally agree there. Chances are they'll be better served with a marketplace plan unless they've got a complicated health situation/very specific care that might be questionablly covered without thoroughly shopping around.
I'm just pushing back at the idea someone can go from making six figures and turn around and hop on Medicaid. It's not that simple. It should be IMO, but it isn't.
Even if one does qualify for those programs, the sign-up time is on the order of almost a year here in California. Applications are Supposed To Be™ reviewed within 45 days, which is already a long wait, but they are using the new normal “due to higher than usual volume, fuck you” approach just like every other modern bureaucracy.
Expenses incurred during the coverage gap need additional approval for retroactive repayment, meaning you have to have the funds to pay upfront for however many months/years the sign-up process takes, then once your coverage starts you have to apply/wait/hope to be paid back for everything paid out-of-pocket which might just get denied: https://www.dhcs.ca.gov/formsandpubs/forms/Forms/mc210a0907....
Really? 16 weeks of salary, or 4 months of pay. In my country, you get 3 months of pay as standard when you're fired from your job. Doesn't seem that great to me to be honest.
I think perhaps that's why poster used "for this situation" -- if a company doesn't want to have to provide advance notice, their only option with WARN is to do it with this kind of severance payment. Not sure if it was intended but that's a pretty cool outcome of the law.
US salaries are quite a lot more; lifestyle creep is a thing but at least for developers they get paid a lot more than the average worker in the US than say in the Europe. Factoring that, 4 months is amazing.
In big tech in the US, 4 months is usually enough to find another similar job in the industry. Also in the US for mass layoffs at big firms, the minimum is effectively 2 months because you are required by law to give 2 months notice to workers about such layoffs, 2 months severance is a way to not have to give such notice.
> But are you not expected to work those 3 months?
When you are leaving on your own term yes.
When you are laid off you are technically still an employee for those 3 months but nowadays many companies will just tell you to not show up for security reason.
Personally, I'd consider this nothing to write home about. It's OK. Not great, not terrible.
If we're laying off 20% of the company, I'd expect the package to be somewhere in the 6-12 months range. To me, that would seem more fair, considering they are completely restructuring the whole company.
I'd rather take having a tech industry at all and the 2-4X bigger US salaries (and 30% lower average taxes) than having my fellow citizens shoulder the burden of giving me 6-12 months of daycare.
In the US luckily the job market is still quite dynamic (and extremely tight by historical standards) so only in an extreme scenario would someone with Dropbox on their resume need 12 months to find another job.
They might have to take a pay cut from a 99th percentile salary to a 96th percentile salary though. Rough, I know.
This literally happens every single time there is a big layoff announcement on HN; at this point it's completely predictable. People love these stories as a place to vent (not that I necessarily blame them), but I do find that these kind of stories always attract the lowest quality comments. E.g. "Why hasn't the CEO committed harakiri!" Which is always a bit sad to me because I think the biggest mistake (especially in highly paid industries) is to think that a layoff is the end of the world and the absolute worse possible thing that can happen to someone.
we've seen so many of these stories, the same narratives (which are just that. words, not actions nor plans), and no further insight on their real reasons.
What is there to say or inquire about? The human element is way more important.
>to think that a layoff is the end of the world and the absolute worse possible thing that can happen to someone.
Short of sickness or death of a loved one, I struggle to think of anything worse than losing my livelihood out of nowhere.
I guess if I owned a house and it burned down? I can insure that at least. Job insurance seems to be dead these days.
Car accident? if no one was hurt that's much less worse. I can rent a car until insurance figures itself out.
What kind of dismissal is this? Have you ever been laid off? I'm genuinely wondering what your mindset here is when you made this comment.
We've learned it because we've seen this movie many times over the past couple of years (the catalyst perhaps being Musk's decimation of Twitter): it's become acceptable -- and perhaps not only acceptable but expected -- to suddenly cut a significant percentage of your workforce in order to "drive growth", with some BS platitude (the details of which vary a bit but they all read pretty much the same).
It's not venom, it's an appropriate response by workers to the "shareholder-value-at-all-cost" race that the industry finds itself in; an industry that has prided itself, and often built companies on, values that are the opposite.
That, and the fact that CEOs have no accountability for these decisions.
I saw the venom the other way. People are losing their livlihoods and I see such dismissals as
- "You shoud have saved more money"
- "oh well you'll get a better job soon" (have not seen the job market the last 2 years)
- "They were probably low performing workers anyway, they deserve it"
- "It is what it is. Business is going to business"
- "The CEO's are just doing their job"
I hate it. We can't even come together as a community, which consists of many tech workers, to empathize with our peers. No wonder we can't rise up and bring about change from grassroots.
Just off the top of my head: every engineer should have 6+ months of savings. Market isn't great but our salaries can help build those savings easy.
If I had more time, I would love to understand the fss market better and also what impact ai is having there. I don't see a Q3 earnings report from Dropbox, but as others have pointed out in other comments, Dropbox seems to have been doing fine financially.
> Dropbox seems to have been doing fine financially
Not really.
The issue is Dropbox's core product is heavily commodified (Cloud File Store for Enterprise and Consumers).
Dropbox's EBIDTA is much lower than peers in the Software industry making it a much less attractive investment - even public companies need to attract investment.
Furthermore, Dropbox has missed out on multiple trends that it had the right ingredients to execute on, such as DLP, DSPM, AI Search, AI-leveraged Business Tooling, etc.
It's not that Dropbox didn't try building these teams - they did and I know plenty of people who were hired to work or lead these initiatives - but tech is competitive and they got outcompeted.
At some point they have to initiate layoffs in order to retool internally and concentrate on the BUs that actually generate outsized revenue along with strategic bets that can help make Dropbox more enticing.
> every engineer should have 6+ months of savings. Market isn't great but our salaries can help build those savings easy
Pretty much. Layoffs have always a thing in the tech industry.
And compared to previous cycles (early 2000s, 2008-2013), the current job market is fairly standard for mid-career.
I think this tech downturn is just the first one that a lot of 2011-22 grads went through and it makes them feel like it's the end of the world.
Keep saving, keep upskilling, and keep networking - these are what save you when we all (inevitably) get laid off.
"every engineer should have 6+ months of savings. "
I did. Even stretched it out to 9 months (getting a freelance gig out of nowhere helped). But it's been 13 months with no full time work.
>Market isn't great but our salaries can help build those savings easy.
It did not. Not everyone's making 300k at Google.
>If I had more time, I would love to understand the fss market better and also what impact ai is having there.
nothing short term, but the usual suspects come about as usual. Trendsetting from Twitter, ZIRP, tax code changes affecting how to amortize tech salaries, an anticipation of a downturn in the evonomy, and AI speculation (not really affecting tech, but other areas).
Those are each worth their own post, but this is againa topic talked about a lot . Since this has happened a lot.
And yes, this wasn't a layoff of necessity. That's the "venomous" part about it. Why Wouldn't I be mad at blatant greed?
I think the real learning here is that the company is still around even though they are sort of not in the popular zeitgeist at all anymore and there are so many other tools that does what they do.
Gotta prevent panic in stockholders is the main priority of a CEO in publicly traded companies. They only concern themselves with the well being of their employees as much as how it affects the stock price.
Because they risk getting punished by angry shareholders and risk lawsuits and risk losing customers if they deviate from the corporate speak to say anything substantial.
Something weird I noticed about Dropbox:
I cancelled my paid account two years ago. I had 5 terabytes of storage being used (mostly shitty concert vids and food pics).
Everyday they email me telling me I’m over my limit. They always “threaten” to delete the data but it’s been two years since I cancelled.
My Qs are: why are they hoarding my data for so long? Why would they want to do this? How cheap is storage for them to want to do this? How likely is it that they have sold my data to train various LLMs with?
If they delete your stuff, you almost certainly won’t resume your subscription. The cost of storage may be lower than the benefit from re-subscriptions, and possibly the cost of actually implementing and maintaining an automated deletion process in compliance with all jurisdictions.
You can just delete your data dude. No one is forcing you to keep it there. They’re generally not going to do something destructive because of unpaid bills. It’s nice of them
But why do I have to log into Dropbox to do this? I haven't logged into the site in 2 years and don't plan on it. I just find it odd that they keep threatening to delete my data but from where I'm standing it looks like they will keep my data indefinitely.
I'm not forcing them to do anything. I terminated my service and they're still keeping my data. Seems like shitty consumer rights that they'll just keep the data regardless of what I do.
That's what I'm trying to figure out, if others have similar stories.
>Seems like shitty consumer rights that they'll just keep the data regardless of what I do.
But they aren't keeping it regardless of what you do. You can ask them to delete it and they will. The power is in your hands and you are refusing to use it.
They are absolutely keeping it regardless of what I do, I cancelled two years ago (next month it'll be three years) and they send me daily emails about how they will threaten to delete the data when they have no intention of doing so.
You don't find that misleading and poor for consumers? Companies shouldn't have carte blanche to do whatever they want. Especially when I terminated a service years ago.
Once again you think it's a good policy to indefinitely retain data after nearly three years since canceling and you can't imagine why consumers would be upset about this policy?
Hopefully something breaks through your mind, maybe you're understand why the majority of the public don't trust or like big tech.
I understand some people want their data deleted, but think more customers would want the data saved in case they renew.
The part I dont understand is feeling helpless, complaining, and dealing with daily emails when it would take 60 seconds to log in and delete the files.
It is like someone who cant be bothered to wipe their butt complaining about the smell.
Sure the license agreement would not legally permit that.
I wonder what kind of legal recourse you would have. There's obviously copyright infringement, but I think state laws like CCPA include remedies for violations.
Company isn’t doing so great and future doesn’t look so great and people cost a lot of money so they are letting folks go who aren’t as valuable. This makes sense.
It wasnt needless, they didnt want to miss out. They are not sure what they didnt want to miss out on, but they knew for sure that they didnt want to be the only one not doing it.
If you look at its earnings they have appeared to plateau and there isn’t a major offering planned that will change this.
I am reminded of Slack which has a similar history of rapid growth followed by a very competitive market and then significant slowing. Maybe Salesforce could acquire Dropbox and bundle it into their offerings or some other similar company?
Slack shot their own selves in the foot iirc. They were miles ahead of any competitor, employees loved it, and then they just started gouging all their whale customers in contract negotiations, to the point that they started looking elsewhere...
If this isn't the full picture, let me know. I was at multiple companies trying to move away from Slack as the cost was not justifiable
MS Teams was a large contributor as well to the downfall of Slack. It automates decently with the stuff most companies already have (AD, O365, and most importantly all that compliance bullshit), and nowadays it can even do landline telephony, providing enterprises with a way to reduce their exposure to Cisco crap on top of it.
In the end, Microsoft is IMHO once again abusing its stronghold on the market. Just the enterprise-compliance-integration stuff is more than enough to cause any medium or large company to move off of Slack or its competitors (e.g. Mattermost).
Teams and Google Chat. They're both incredibly bad compared to Slack. But if your org is on 365 or Workspace, you're already paying for them. Big orgs don't love double-paying, quality be damned.
We’ve heard from many of you that our organizational structure has become overly complex, with excess layers of management slowing us down.
So we're making more significant cuts in areas where we're over-invested or underperforming while designing a flatter, more efficient team structure overall.
So a lot of middle management getting let go then?
> "As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change."
As with other CEOs who say such things in similar situations - does this "responsibility" amount to anything? Like loss of salary or options or seniority. Or is this just empty words?
I appreciate that this action is probably necessary to safeguard the business but, as someone who has been at the sharp end of a number of redundancies, I wish leaders would be honest:
"We tried stuff but it didn't work. I was and am in charge, and I'm staying. We're making you redundant because we need the money more than we need you."
Obviously no leader would say such a thing. But the people affected (and thas not just those being made redundant) deserve honesty, not platitudes.
"I earn the big money because I make decisions and I take risks (with others lives, but let's not talk about that). My decisions haven't worked; my risks haven't paid off. I'm however letting you take the hit, because I'm too important for that kind of shit. I've more decisions to make, and risks to take. My family is fine; my pay is fine. It's just you who are affected.". -- Your CEO, who still makes more money that you do (or don't), no matter what.
(Your comment was dead but I vouched for it because I want to explain why youve failed to appreciate an important distinction.)
tldr: the redundancy is not the announcement
I think people (and I include myself) do understand that companies need to adjust their workforce. I think that decision is not wholly moral in nature. But it does have a moral component - and Dropbox seems to appreciate that somewhat in the assistance they're providing the people who are leaving.
But what isn't moral is an individual announcing publicly that they take responsibility for acts that cause trauma to others (however constrained that decision was) while in reality that responsibility-taking involves no consequences at all the individual. None.
In the large train station in the city where I live, the automated voice announcements "apologise" for train cancellations. I'd argue that this is as empty and insulting as this CEO's email - because no responsibility has in fact been taken. The CEOs words and the announcement software are as morally empty as eachother.
The uncomfortable truth is that pretty much any business can cut staff by 20% without impacting overall performance. Provided that you manage to weed out the tail end of the performance bell curve that is.
Most of the time, reducing staff is a healthy move for the business and the impacted employees. The company will not only save cost, but strengthen its culture of high performance. And under-achieving employees are often fundamentally unhappy in their role. While the short term impact of being made redundant can cause some distress, these people can still use the occasion to reset their careers.
They don't know which 20% needs to be cut. That's why they wait until something unrelated to their business internals (market downturn, other companies are cutting) happens to try.
I remember seeing somewhere an analysis that layoffs do not improve medium or long-term stock performance for companies performing layoffs. But if layoffs are coordinated sector-wide they can have a big impact on employee compensation in the sector by creating a reserve army of unemployed.
I was originally a huge fan of dropbox, and still a customer, though reluctantly these days.
Dropbox has fallen so far behind many other companies. Google photos search is amazing, it merges people even if they don't have contacts, it has really good image recognition, it has some sorting/ordering amongst many various dimensions.
Why can't I make small edits to text files in dropbox? Why haven't they added any useful apps?
Why are they not the best photo organizer/searching system?
Du you have sources for this? Now I'm not much better but I actually think there are several studies that show correlation between layoffs and worse than average performance.
It absolutely affects morale for the "suvivors". you don't just cull a fifth of your company like cattle and expect the remainers to be blissfully ignorant. Also, top performers seeing this, even if they survive, will definitely start shopping around. It's an awful move for companies in the middle-long term. T
The titanic was warned over a day in advance. It then took 3 hours to sink. You can absolutely be sinking but look to be productive for a while. Especially if the company just wants to tread water instead of grow. And I hope they have enough lifeboats ready when that time comes.
Evidence, please. From what I've seen in person, it doesn't work this way at all. Companies don't have a great fix on whom to cut, and it usually just makes the other employees feel stressed (and start looking at other jobs), while the unemployed suffer very significant life stress.
Perhaps the better lesson is that tying your self-worth to your corporate employment is a really, really bad idea.
I realize that's difficult in today's performative world, where an quick perusal of LinkedIn shows loads of people that are "passionate" about banking compliance or insurance claims or whatever. Many companies have also have fostered this false idea that companies are a "family". That is always false. The best companies are more like a team, and when things start to go south, sometimes people on that team are cut.
Ironically, I think the professions where people really are passionate and see it as a "dream job" (think professional sports teams, actors, musicians, artists, etc.) generally have a much healthier view of their employment in the first place because they realize how tenuous it is to begin with. Point being, if you're considering suicide if you lose your job, you should be in therapy long, long before it gets to that point.
One final note: before I get the pushback of "that's all nice to say until you have no income and are living on the streets!", let's get real for a moment. First, I have a ton of sympathy for people who are laid off - it sucks and can be very destabilizing. But lets also get real - people were laid off from Dropbox with a very generous severance package and they are in a highly paid industry to begin with. None of these people are going to starve, and nearly all of them will be able to eventually find employment (if perhaps not at the same exact high salary as Dropbox). Any mental health issues folks have after getting laid off is nearly always the result of tying one's self-worth to one's job, and that's the link that should be broken.
The only thing we would agree on is that disconnecting self worth from a job is, in general, a good idea.
I have spoken with professionals in ballet and they actually feel mental strain from having to file for unemployment when off season. Even though it’s considered normal practice it doesn’t mean it’s right to treat people like that.
Dropbox gave a generous severance? Maybe, but is that is the case everywhere? I can tell you, the start up I worked for before, Aurora Innovation, only gave people one week for every year worked and they were doing silent layoffs in groups of five. One of those people was a young father on H1B who had been there less than a year.
Saying you should be in therapy long before it happens is rather callous. How was that father, or any of the other people, know they would need therapy beforehand for something they have no control over? It’s like saying you need therapy before an earthquake destroys your home.
>tying your self-worth to your corporate employment is a really, really bad idea.
We can talk philosophy all day long. I just want to pay rent, respecfully. People telling me to "upskill" seem tonedeaf to this.
And this isn't some thing unique to tech. All jobs dried up. I wouldn't be worried otherwise if I could find ANY work right now.
>But lets also get real - people were laid off from Dropbox with a very generous severance package and they are in a highly paid industry to begin with.
okay. Other companies don't. I got a month of severance and saved up 6 months.
It's been 13 months. What now? I'm not starving but only by dumb luck.
>Any mental health issues folks have after getting laid off is nearly always the result of tying one's self-worth to one's job, and that's the link that should be broken.
No it results from peopel stresse on how to survive. Maybe be real and look outside the FAANG bubble every once in a while. I'm not worried about Dropbox, but everything else in this BS economy that pretends to be soaring.
I don't belive you have any sympathy given this comment. You just want blame anything except the environment and people not magically being prepared for 6, 12, 18+ months of unemployment in what was very recently a "hot market".
You think that people who are doing nothing all day are unhappy?
Protestant work ethic got you by the gizzards.
We call it "rest and vest" here in the tech retirement homes of companies known for being "chill" like Microsoft, Linkedin, Salesforce, Oracle, IBM, Intel (historically), etc
For context, Drew Houston's total compensation for the year in 2023 was $1.5M:
> According to our data, Dropbox, Inc. ... paid its CEO total annual compensation worth US$1.5m over the year to December 2023. That's a notable increase of 34% on last year
Even if Drew took minimum wage, that would save ~15 jobs assuming $100K all-in comp (which seems low to me for a tech salary). 500 employees is more like $50M/year, and probably more.
Of course, Drew Houston's net worth is ~$2B and he could technically loan Dropbox Inc money personally to save the jobs, my guess is a lot of his net worth is actually Dropbox stock that he would have to liquidate and would affect the stock price materially. He would also need to follow insider trading laws too and can't just up and sell vast amounts of stock on a whim. Most executives are on pre-approved schedules to sell any stock to avoid triggering insider trading.
The severance package Dropbox is offering is pretty good - 16 weeks of pay + an additional week for each year of tenure, impacted employees get their Q4 equity vest & prorated bonuses, everyone keeps company devices, an offer for extra time + help for people on visas, and job placement help for everyone.
Dropbox is a public company that is profitable, but not really growing through their flagship product. No growth is more or less bad on Wall Street. They also haven't really had a major hit since their initial file-sharing product and missed some shots they probably should have hit (mainly vs. Notion with Dropbox Paper, Mailbox acquisition, etc). With many systems moving away from "files" and to "cloud objects" like Figma, Notion, etc, their workhorse product might be going away over time too. They need the time and focus to find that next S-growth curve.
Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship.
> Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship.
Layoffs are the trolley problem but you get to pick how many people are lying down on each side of the track and if you want yourself to be one of them.
That said, if one reaches the conclusion that under their leadership they were forced to downsize by 20% (either due to over hiring, failure to reach revenue/growth targets, whatever) that should make that person one of the people on proverbial tracks. Compensation has little to do with it.
>that should make that person one of the people on proverbial track
That's a satisfying thing to say, but as practical advice it's absolutely terrible.
Often that person's leadership wasn't the problem, but even when it was, that doesn't necessarily mean that the company will be better-off without them. And that's the question -- what will make the company most likely to be the most successful going forward? Even if the current trouble is because of some of that leader's mistakes, the answer is often to keep that leader. Sometimes it isn't.
> Often that person's leadership wasn't the problem
Then what is the problem? Ultimately you’re paid the big bucks for being held responsible. Why isn’t it never something like the CEO doesn’t get any stocks that year. I’m not saying he needs to leave the company but maybe he should take a substantial hit to his pay. He has enough money to put food on the table for many years, unlike the people who are let go where it’s mostly a mixed bag.
No, I dont think there should be a penalty by default.
The objective of a company isnt and shouldn't be to run a charity. Some amount of layoffs are desirable just as a matter of housekeeping. Layoffs can be a hard part of doing a good job.
I think there are extreme examples and tactics where layoffs cross a moral line but not a legal line. for example, I think the humane thing to do is freeze hiring before layoffs so you dont relocate someone only to let them go.
That said, there are already a lot of business incentives to avoid turbulence in headcount. It is slow and expensive to hire people and let them go.
>I dont think there should be a penalty by default.
I do.
>The objective of a company isnt and shouldn't be to run a charity.
Charities pay employees too. 501ks don't mean you run on all volunteers and that it's okay to remove them at your whim. Horrible metaphor.
Anyways, a company has 3 goals
1. serve the customer
2. support your labor to enable efficient production
3. overall stimulate the economy and society
These all help the bottom line of "make profit". Shareholders have little stake here so it's annoying that that is all they prioritize lately. because you then break all 3 rules just for them, who will leave on a whim for some other speculation. And then they wonder why they lose money as workers burnout and leave, as customers get frustrated and move, and the economy gets worse as money is pocketed to the rich instead of the public.
It'a all a horrid death spiral. It needs to stop. It will stop forcefully if not voluntarily.
>It is slow and expensive to hire people and let them go.
And who's fault is that? I don't remember shouting in glee whenever I hear 5 rounds of interviews, including 2 rounds dedicated to trivia.
>Its actually incredibly hard to to figure out which people to cut in an efficient manner.
it is. That's why Hanlon's razor simply tells me they aren't trying very hard. They need to cut numbers, maxiize money and care about next quarter next quarter. efficiency wasn' prioritized before the layoffs, why would it be now?
I dont think we agree on enough fundamental facts about the world to have a productive conversation. It seems like you are in denial about the possibility that some workers can be detrimental to bottom line profit and efficiency.
By the way, the charity comment wasnt about volunteers. Companies are not run as a non-profit charity with workers as the beneficiaries.
Yes we are. You're in denial that most of these layoffs are performance based, and not because of factors beyond their control.
If you're cynical about your peers to think that the default of them in the field is unprofitable and unproductive, we have nothing to say to each other. Learn some empathy.
/s aside
Its actually incredibly hard to to figure out which people to cut in an efficient manner. It is one of the reasons companies suck so bad at doing it, and many avoid layoffs and firing when they should be doing more of it.
to play devils advocate, there are different levels one can look at that. From the level of the companies and owners, the goal is to make money.
From the perspective of society there are tons of answers. A common answer is that companies provide goods and services that give consumers more value than they cost, thereby enriching the lives of consumers.
It seems like some people, especially those who take issue with layoffs, tend to think the social purpose of companies is to give jobs/money to workers. This leads to a lot of frustration for those people because the entire economic system is set up such that jobs are an optional byproduct of making goods, not the other way around.
We live in a society where there are more metrics than money. The entire notion of corporate amorality is a thin veil that people use to hide their own unethical and immoral behavior.
That's why I made the comment that layoffs are the trolley problem. It's an ethical question and companies don't always make the ethical choice, for example choosing profit over jobs in a downturn.
That presupposes an ethical obligation to provide jobs, which is of course at the center of this.
If you think companies have a ethical obligation to provide jobs and do so continuously, of course you will find issue with the rest of it. All objections stem from this, and it is controversial.
I disagree, and think you're missing the forest for the trees. I think that people have an obligation to keep their promises to other people - that's a virtue called honesty or integrity. When a promise needs to be broken, that presents an ethical dilemma.
One example of people making a promise is hiring. A layoff is fundamentally breaking the promise you made to a group of people to keep them employed - whether that's the most ethical choice or not circles back to the trolley problem. If 20% need to be laid off to save the 80% then it's not an unethical choice. If 20% need to be laid off to make up for the mistake of a small group of leaders in order to benefit the small group of shareholders, then it's unethical.
> All objections stem from this, and it is controversial.
It's only controversial when you pretend that you can absolve an unethical choice by placing it behind the corporate veil. It's not controversial outside of Milton Friedman disciples.
Do you think hiring is a promise?
What do you think the promise consists of? I think you are projecting a promise where you want one to be, but nobody is actually under the impression it exists.
Neither employers and employees are under the impression jobs are for life. If you're concern is primarily honesty and promise, would this piece satisfied by a written declaration and acknowledgment that the duration of employment is not indefinite and can change based on the arbitrary whims of the employer?
If you remove the corporate veil, what do you think the promise is for one human hiring another, and the ethical requirements. If I hire a housekeeper or babysitter, what am I committing to?
I dont see how corporations are held to anything but a higher expectation than individuals, not lower. Can you expand on this?
Huh? A promise to keep people employed? If it's not in the contract, it hasn't been promised. You're fan-fictioning a promise that was never made to manufacture an ethical issue that's not actually real.
If the contract says you'll get 60 days notice and you don't, that is a broken promise (and an actionable breach of contract). Firing someone you hired is not a broken promise. You don't have to be a Milton Friedman disciple to refrain from gaslighting about employment being a promise to keep people employed forever.
It's called the "social contract". You do good work and make me money, I keep you around and let you keep doing good work. It's equally a cynical and fair interpretation of a company.
This was broken long ago, so I understand it being a foreign concept, but it's something my grandparents told me about when giving me my bootstraps to pick myself up with. Now it doesn't matter how much you make them because you can't outpay their ability to save on tax breaks or make funny monopoly number go up. So we're all doomed.
>Firing someone you hired is not a broken promise.
depends on the contract and laws around it. This is far from universal unlike the social contract described above.
> It's called the "social contract". You do good work and make me money, I keep you around and let you keep doing good work. It's equally a cynical and fair interpretation of a company.
If it's more profitable not to fire someone, because they're making the company money on net — given a big picture perspective — then they don't get laid off. There's no profit in laying off workers who are making the company more than they cost.
Where workers often miss perspective on this is in looking only at the smaller picture. Things can be making money in the small picture while not being profitable in the big picture, e.g. Kodak's film production operations before the rise of digital photography. If the business needs to be building digital cameras and the capital needed to do that is currently tied up in traditional film, the fact that employees working on film production may be profitable on net given the current capital allocation doesn't mean they're profitable in the big picture. And it's often a very, very good thing for society when a company in that position lays off a bunch of people and reallocates that capital, as it would have been with Kodak had they fully committed to digital earlier.
>There's no profit in laying off workers who are making the company more than they cost.
Yeah there are. If a worker is paid $100k, makes 1M for the company, but you have a 20M dollar tax incentive to bring people back to office: it doesn't matter if that worker is a 10x-er. It is more profitable to tank your productivity so you get a cushy tax break if that worker can't/doesn't want to RTO.
That was my core point on this "social contract" being broken. Companies are more interested in finding loopholes to save money than ways to make their products more attractive and grow other revenue sectors. There are a dozen more examples of this. It's not that they aren't productive, it's that the company found non-labor ways to make or save money.
>Where workers often miss perspective on this is in looking only at the smaller picture. Things can be making money in the small picture while not being profitable in the big picture,
And it's where companies miss when they look at next quarters earnings call instead of years later. Boieng is reaping it's rewards from over a decade of doing this. You can't screw over your employees and degrade quality to a point of costing lives and then suddenly wonder where it all went wrong.
why do you think these people are making the company money? The CEO and stockholders all seem to think the company will make more money without them then with them?
No, but that specific sentence you're quoting is targeting a very specific bit of business ethics teaching that I find great issue with. IME no one making decisions like layoffs really believes in the amorality of corporate decisions, except the morally bankrupt. You don't find solace in the idea that a company only exists to make money when you're telling a father whose kids are about to start college that he needs to look for a new job.
> Performance based compensation is absolutely standard for CEOs- Both in terms of options and stock grants.
Yes but you’re still making $1.5M after a 34% haircut. That seems like a reward, and not any real sense of taking responsibility when you have to let go 1 in 5. Wouldn’t it be better if he just got a base salary of 200K or something and no stocks for that year? He already has a bunch of equity and if he does well at the end of the year, that equity will be worth more anyway.
In what sense do you think it would be better? Would it advance CEO performance or the company? Would it bring the world more into alignment with some sense of moral justice?
It certainly would be some real accountability. They didn’t perform well and they’re mostly compensated in equity, so they get less of it. When they perform better, they’ll get more equity. Why wouldn’t this encourages the CEO perform better? The sword cuts both ways.
You are describing how the world already works. The only difference is base pay. Why do you think lower base pay is better accountability and performance? They already have millions on the line. I imagine better base pay means better candidates.
>Why do you think lower base pay is better accountability and performance?
it really doesn't matter. Because you don't just apply on linkedin and get interviewed for a CEO position like this. You're already a millionaire if you're being considered for a million dollar position. It can be charity work and I wouldn't care because you probably accrue money passively anyway.
>They already have millions on the line.
and if they fail they have millions left. oh no!
the outcome can be equal but the opportunity never was. And it's a real shame people with these safety nets actively work to erode the pittance of safety nets he government gives to people who make less than them in their careers than they do in a few months.
And who sets the standards? Their CEO-buddies on the boards. None of them would dare rock the boat.
One of the failure modes of 401ks and investment funds are large investment pools that don't vote at AGMs, leaving boards largely dominated by CxOs, to their own devices.
Either you dont understand my point, or I dont understand yours.
Im saying CEOs have financial skin in the game tied to company performance. They get less, often much less when the company shits the bed. This was in response to a parent post that seems to think CEO comp is entirely isolated from performance.
You probably didn't understand my point. You said CEOs are paid that way because it's the standard. In your opinion, who sets the standards for CEO compensation, and what are their day-jobs? The majority of boardmembers happen to be C-suite executives themselves.
My thesis is that the boards of public companies have been captured by the executives, and the diffuse shareholding has been ineffective in providing oversight to the boards at AGMs. If SWE (or teacher) remuneration were determined by a (nominally independent) subcommittee dominated by other SWEs (or teachers), I posit that incomes for that role would outstrip other roles at the same organization over multiple decades, due to biases and knowing who butters their bread. It would become standard practice, naturally.
Okay, I think we are both misunderstanding then. My original point was a fairly mundane one. Pixel was asking why CEOs don't suffer substantial financial cost for bad performance. My point was simply that they do! Poor performance often incurs millions of dollars of opportunity costs to CEOs. I suspect that the deeper question was why don't CEO suffer more than just opportunity cost, in harsher way that would be more emotionally satisfying.
You raise good questions about how prevailing compensation is set and the relative power of corporate governance. I tend to agree that executives have a lot of leverage and it seems like boards are relatively weak. They don't have a lot of incentive to pinch pennies push back on CEO compensation. There's a pretty huge cost to shareholders if they want to fire or even replace a CEO, and uncertain upside.
There might be some class/roll solidarity going on as you propose. However, I think the bigger factor is that minimizing CEO comp simply is not a priority for boards and shareholders, despite the attention it gets from outside critics.
Held responsible for what? The what part is written in contract for execs, movie stars, sport persons. I have not seen in any category people not getting paid per their contract for poor performance.
The ones out of job can join a different company, america’s unemployment rate especially in the tech sector tends to be low.
Them doing layoffs doesnt mean the people become destitute.
It is better to layoff people who are not adding value to a company, so that those newly unemployed folks can join a different company and build great products and add more value to the economy.
Ofcourse this only applies to US tech sector where hiring is tight. Especially when coming out of top tier companies like dropbox on your resume.
I don’t think its that dramatic, folks who tend to hold similar ideologies like you state, tend to not even bat a single eye, when average americans who lack the privilege of a tech worker lose their job to automation (with tech) or outsourcing or due to overburdened climate regulations and redtape leading to fewer factory jobs in America.
This is not the titanic, those people will move on to places where they’ll have a chance for promotion.
Whenever people are laid off where you work, I suppose you always volunteer to take their place? Since according to you it's only such a minor inconvenience I think it would be hypocritical of you to not to offer to take their place.
Grandparent is not even saying that it should be avoided, just that the CEO should face some accountability from it. In many cases they have none at all, whereas the impact on the employees can range from actually quite low (as in your example) to very high. In fact there is no upper ceiling to impact to the worker which is the real problem. From the horror stories I've heard about the US they could even lose health insurance and end up with someone in the family dying because they can't afford treatment. Accountability is good precisely when there are such asymmetrical power imbalances, where one person makes the decision and someone else bears all the consequences. Either you add some feedback loops or the imbalance grows unchecked until it becomes unsustainable, and eventually you end up with a war of independence, or a French revolution and things like that.
With just a bit of empathy it should be easy to understand why accountability is needed in such situations to keep a good social dynamic long term. Someone with the empathy of a river boulder might think it's just people behaving irrationally, but I suggest you look into game theory and you'll see how some seemingly irrational behaviours like tit-for-tat are not as irrational as they seem.
>The ones out of job can join a different company, america’s unemployment rate especially in the tech sector tends to be low.
>Ofcourse this only applies to US tech sector where hiring is tight.
So, which is it? Will we move on or wont we?
>tend to not even bat a single eye, when average americans who lack the privilege of a tech worker lose their job to automation (with tech) or outsourcing
They keep trying to re-outsource tech every decade and we're in another wave. Why would I not be batting all my eyes at outsourcing?
> Often that person's leadership wasn't the problem, but even when it was, that doesn't necessarily mean that the company will be better-off without them
How convenient (for them)! When the company is doing well, they get millions in bonuses because their irreplaceable leadership skills - which make them 2000x more valuable than the least paid worker - were instrumental to the organization's success.
When the chips are down, it wasn't their fault per se, and the company still would be allegedly worse off without them, so laying-off waves of those who don't have decision-making power is the correct remedy, until the good times roll again, and senior leadership is ready to claim responsibility.
It must be nice to claim "macro-economic headwinds" as justification for poor performance and poor planning, but still get paid bonuses for the never-mentioned "macro-economic tailwinds"
> must be nice to claim "macro-economic headwinds" as justification for poor performance and poor planning, but still get paid bonuses for the never-mentioned "macro-economic tailwinds"
What would you do if you owned a business? Fire leadership every time they make a wrong call? Or ban them from admitting they made a wrong call?
- Find the issues, the ACTUAL issues. not "the stockholders are unhappy" issues. Not the "we overhired" issues. tangible issues hurting my bottom line. Economic head/tailwins is not a tangible issue for anything (let alone performance related) so much as a means to adjust projected earnings.
- Make an action plan, give tangible, reasonable goals. Not speculation on what appeals to monopoly money. We're a software company; if we can't collect internal data, how are we handling client data with any integrity.
- If anyone in leadership acted maliciously, they are gone. Full stop. Others are corrected. I can correct ignorance or incompetency. I won't stand deception and trickery among what should all be an aligned company with aligned goals.
(note, I won't codify a need to "fire someone" everytime a mistake is made either. a mistake is a managerial failing at best and a company failing at worst. Operate in a “a rising tide lifts all boats” mentality, not blame culture)
- if action plans and projected revenues look dire and we absolutely need to, introduce cuts. Try to cut my (assuming I'm earning anything) salaries first, then other execs. If absolutely necessary after they, we do layoff rounds. Ideally this should not happen because I have a proper savings chest for the worst times, but I'm not 100% opposed to layoffs as a last resort.
now of course, all this is unnecessary because dropbox is in fact not at the point where any of this is needed. Except maybe for Monopoly money. But yes, I have thought quite a bit about this scenario. And I still know this is still a shallow exercise since I'm missing tons of looholes and other scenarios.
If I owned a controlling stake in a business, I'd fire the leadership every time there's evidence of short-term thinking. The problem with public companies is systemic: a large fraction of shareholders want short term appreciation, and so they support and reward short-term mindsets in leaders at the cost of long-term value.
> I'd fire the leadership every time there's evidence of short-term thinking
Have you owned a business? Worked for a manager who thought like this? You’re describing the sort of mercurial boss who fires people for disagreeing with them.
There's nothing mercurial about firing someone over poor strategic planning. Before you hire someone, you communicate the expectations of the job, amd if an executive prioritizes quick ones over long term big wins, that is a fundamental misalignment in values - not a spur-of-the-moment dismissal.
> Before you hire someone, you communicate the expectations of the job, amd if an executive prioritizes quick ones over long term big wins, that is a fundamental misalignment in values
Right, this is micromanaging leadership. You're looking for a manager to execute your vision. Not a leader. Short termism is a problem. But layoffs aren't proof of short-term thinking. If anything, they're a sign of past exuberant optimism.
If the leadership mistakes lead to the loss of livelihood and healthcare of thousands of employees because of their mistakes, yes, they should be included in the firings, or strongly considered for them - more so than any of the people getting laid off who made no mistakes, except working for a bad leader.
1. This really shouldn't be advice handily thrown out like "learn how to play guitar". You gotta spend money to make money, and if you're laid off without a plan this is the worst time to spend money.
2. I plan to one day. I very much plan not to rely on a VC for that. The purpose for my company is to not require millions to ship products users want/need and to stay extremely lean. A small team of "full stack" developers, to put it roughly. I should already be in a very solid position by myself before I come to such a crossroad.
3. I will admit I am not this "full stack" dev yet. I will still need some months/years to get to this point myself. So I'm a "student" as of now.
I agree with you in spirit. In reality, the "I quit my cushy 9-5 job to make my own game" is such a meme in my industry that I want to have a plan B and C for if/when I fail.
I have started a company[1], but that's neither here nor there. I vehemently disagree with your insinuation that I couldn't challenge leadership culture had I not.
Founding a company doesn't make one infallible or irreplaceable. Though to be fair, it doesn't feel that way when it's your company though!
1. I will note that this is an incredibly low bar.
> Often that person's leadership wasn't the problem
What's the basis for this claim? I would rather think often it was the problem. Not absolutely every time, but most times. After all, the C-suite makes the decisions. I can not believe management decisions do not influence the course of a business.
Sure, it's possible that outside circumstances were such that no decision could avoid a bad outcome. But that's a rather unlikely possibility. Most of the time, outcomes depend on decisions. Otherwise businesses would be some headless automatons. And if that was the case, we should not pay execs much at all.
It's an obvious cheat: when times are good - it's all because of the leaders, when times are bad, it's all because of the environment. This is what they claim, but it is not the truth. Again, what's the basis for this claim? Any proof, studies, anything?
Generally leaders are not going to fire each other.
So sometimes a doomed strategy will be pursued far longer than you'd expect, barring some board or activist intervention.
Some of it is self interest, some of it is hubris.. but also one can easily blame a bad run on some broader economic situation, specific competitor actions, or right strategy with wrong team (so fire the team) .. this works for a while until it doesn't.
Seriously, that severance is awesome. Of all the tech workers struggling, the ones from companies big enough to throw 4+ mo severance packages are not the ones I am worried about. Any smaller company your severance is a pat on the back.
Yes, as soon as you have a regular paycheck you should start building an emergency fund. This should be taught to everyone in high school (or earlier) but we don't do it, among many other "life skills" that we do not teach because they aren't on the state standardized tests.
I had 6 months saved . It's been 13 months. School did not prepare me for the fact that my college degree in STEM could still leave me on the market for an entire caledar year
Yep, this is what I do. Individual responsibility is an unpopular idea these days but the way I look at it, I am the one who is ultimately in charge of my family's wellbeing. That is far too important to entrust to a corporation's generosity or the whims of lawmakers.
I don't think its an unpopular idea. But the fact is, being an employee is a lopsided relationship. You only have one employer but they have many employees. You leave and they still have an army to keep the business going but you get laid off and your income goes to 0. So yeah you can keep some money in the bank but still being without work especially with a family and mortgage, is a terrible spot to be in.
And it leads directly into the US being richer than all but tiny petro-states and growing faster than all of its peers. Fair enough if that's not what you want but there are tradeoffs.
Lets see how much it remains left if US keeps offshoring all the stuff, followed by imposing import bans after those countries become good enough to start taking over economy sectors.
>There's also unemployment benefits for US workers.
if you consider a few hundred a week "benefits", sure.
> people still vie from all over to work at US companies and we still draw the best talent.
yes, because like companies, the USD is coasting off of successes from long ago. We corrupted the tech boom, but fell behind on the FEV boom and manufaacturing in general.
USD is great to earn. It's horrible to live in the USD to utilzie it though. That's why companies are trying yet again to outsource.
The average tech worker really should not have to go into any debt for even a year long hiatus from their typically well paying job. All that is required is living like a typical American and saving your salary. I honestly don't see how anyone can claim tech workers are not compensated for the volatility inherent in the industry.
My cost of living has increased proportionately with my compensation, but also I don't work for any FAANG companies. I would love to work for someone that actually pays well, but typically those companies have ridiculous interview processes. Not all of us went through the standard CS degree pipeline and memorized all those questions. My first job was paying me 35 thousand a year, something most people probably would be surprised about, and I suffered through that for almost four years, the only raise I got was very marginally insignificant. It's not been a fun ride considering this is what I love to do, I know others who do drastically less work than I do and make more income wise.
1. all tech jobs pay well. Well enough to expect 1 year+ savings. They don't
2. that we all have the same cost of living or family situation. Even living frugally, supporting a spuose and kid on savings is not trival.
>I honestly don't see how anyone can claim tech workers are not compensated for the volatility inherent in the industry.
Come work in the games industry for a while. 30% more hours, maybe 60% of the pay in a "good studio", and near guaranteed layoffs when the proect ends.
Early-in-career folks are more vulnerable. Even before major family/life costs start to play a role, it can be difficult to save enough for a safety net after moving to an apartment (even w/ roommates) from college & managing student debt, etc. I remember it took me a couple of years of stability to not feel at risk.
That’s actually a pretty low salary but I just looked up their revenue numbers and it’s not looking that hot. They are also hemorrhaging cash this year. His salary and the performance of the company were probably a good foreshadowing of the layoffs
> His salary and the performance of the company were probably a good foreshadowing of the layoffs
As is standard. My recommendation to anyone that works in a corporate environment is that if you want to know whether the company will be at risk of layoffs in the future, become good friends with someone in sales. When the sales leads and activity start to drop (or growth rate starts to slow), you can usually be assured that layoffs will eventually follow. In my experience the sales folks were always the first to clean up their resumes and start the job hunt because they knew what was coming.
I'm not going to believe this "matured business" narrative when the letter itself claims right after that.
>We continue to see softening demand and macro headwinds in our core business.
This isn't a matured business strategy. This is a business predicting a cold winter and trying to bundle itself up. Of course, the less people to warm up the better.
Yea, that's fair. I'm just being critical of the 'facade' (said with less ire than it sounds). The size is no surprise, in or out. I'll be mildly merciful - not all his doing
I still hate the fact that people can borrow money against a stock. Stock should be sold, period. That is how the market sets a price for stock, through the volume of it being sold and bought. By allowing people to borrow against a stock, let's them get the money for the stock while still holding it. That artificially increases the stock price and value.
probably whoever makes the loan will hedge, maybe by shorting the stock. or buying puts, but then whoever sells them the puts will hedge by shorting the stock.
if they decide not to hedge, then it must be because they don't think they're exposed to much risk, which basically means they like the stock and would be willing to own it. it feels like it mostly works out.
> Drew Houston's total compensation for the year in 2023 was $1.5M
That is insanely low for the CEO of a public company of Dropbox's size. But I suspect he owned a lot of shares in the company so when it went public, so he doesn't need salary, it is just a rounding error in terms of his wealth.
I always wonder what gives these people the drive to continue. Maybe I’m lazy and lacking vision but if I were worth 2B, I don’t think I would go to the office every day just to get accused of mismanagement when I have to lay people off. I would take my yacht to the Caribbean and slack off.
People enjoy having a purpose and a mission in life. Leading a team of people that you put together, in order to improve a project you started, and knowing that doing so will improve both your lives and theirs, is incredibly fulfilling. Even if the day-to-day is full of hardships. In fact, working to overcome hardship is one of the primary source of meaning in life.
Kids are another example. They're expensive, they're annoying, they ruin your health, they take up your free time, they consume all your resources, and they're inherently needy, selfish, and largely incapable of being grateful. Yet raising kids can be profoundly rewarding and fulfilling, in part because of the hardships, and in part because you're contributing to something bigger than just yourself, which is another crucial ingredient of meaning.
Sitting around on a yacht doing nothing is not so different than moving into your parents' basement and doing nothing, save with better scenery. It's the kind of thing you crave when you're burned out, overworked, and jaded, the same way we crave sleep when we're tired and food when we're hungry. It's a reaction to a state of being. But we only desire sleep until rested and we tire of eating once we're sated.
If you ever get to your tropical yacht vacation you may find that, in much the same way, what you thought was a permanent desire was only a temporary one.
Dreaming of winning the lottery and Going On Permanent Yacht Vacation is precisely the difference between being a worn out low-level worker and being a high-level executive who has all their needs met (or at least has the resources to have them met). With the latter you can have enough resources for you next ten generations and still go to work and optimize shareholder profits while thinking to yourself that you are serving a higher purpose.
The average person enjoys villainizing those who they see as somehow "above" them in standing, whether that's social, financial, or otherwise. They are of course incensed when the people "below" them do the same thing.
Type A people who become CEOs don't dream of sitting around on yachts.
Some might be driven by money, but at a certain level it probably switches to a sense of responsibility, but also, it's intoxicating to be at the top where you don't really have to work in the same way, but get to direct what happens. People enjoy power. People enjoy the secrets of what happens at the top. People enjoy the recognition (within their peer group). etc...
One hardly needs $2B to slack off on a boat in the Caribbean… many people do so on surprisingly nice ~30 foot sailboats you can buy with a few months work at minimum wage, and wild seafood is free
I see a lot of people that say “If I won the lottery I’d….” and then describe something they could definitely do without winning the lottery… which makes me think they still would not actually do so if they won
Sure there is- opportunity cost, the real dangers and skills required to operate a vessel at sea, etc. You can pay a professional crew to do everything for you, but then you'll probably feel pretty useless, and be looked down upon by the people you meet along your journey that do it themselves.
The sea doesn't care how rich you are, and being a helpless dependent is boring and infantilizing no matter how big your boat - and you don't develop skills without taking risks.
Ultimately, I don't think people are often that conscious of their real goals and motivations. It's easy to say you have no choices in life because of financial and time constraints, but I don't think those are the real reasons most people choose to do or not do things.
I don't have billions and I don't manage people (I've been voluntold to manage 1 person a few times, and I'd rather that not happen again), but I have enough that I don't need to work for economic reasons.
I'm working part time anyway, because it keeps me busy and interacting with people outside my home, and it gives me access to interesting real world problems that I can't really access as an individual person on the interwebs. Having other people depend on me to get things done provides motivation to keep moving on things that I can't seem to manage on my personal projects.
If I liked the kind of organizational management work a CEO does and I was good at it, I'd probably get roped into being a CEO.
Ultimately he mentions that being CEO is a rare opportunity to play a more infinite game and practice the craft of getting really good at something that doesn't have an end
Yeah I figure a long shot deep tech project would be better suited to a billionaire. Little to no accountability for the first decade or so, and loads of glory if it somehow works out.
I can understand wanting to continue doing something. What I don't understand is why instead of putting their time and now considerable wealth into more philanthropic pursuits, they decide to continue increasing their wealth, often at the expense of other, less fortunate people.
People who have mission and vision of the future are entrepreneurs because they want to solve problems and help other people not because they want to become rich and sail with yacht.
Listen to Snapchat's founder and CEO Evan Spiegel[0] why he didn't sell to Facebook for $3 billion. He even didn't sell to Google which offered 10x more ($30bn) for Snapchat.
To clarify, I actually kind of get it for businesses that actually have a important mission (using my definition of important of course). If you’re working on curing cancer, I would understand that a CEO doesn’t want to leave even if he’s set for life. I just don’t see entertainment and service businesses like Snapchat or Dropbox as actually meaningful endeavors. To me they are nice to have and something I would work at for money, but I wouldn’t feel like I’m making the world a better place. Maybe that’s exactly the thing I was misunderstanding about those CEOs, they truly think their work is needed and important for the world.
No idea about what big CEOs feel but for me, I would absolutely continue working even if I was a trillionaire someday. What matters and drives me would be impact and influence I could have on society. Have couple billions? Throw them on things I care about and keep getting more to throw at the same.
Some people do exactly that but it's rare that someone will simultaneously have the drive to do something that will generate them billions of dollars and also be willing or able to just stop working at that point.
Also remember once you have that much money a lot of things become basically free, both figuratively ($100,000 to a billionaire is nothing) and literally (comped rooms, gifts, etc for basically every event and your company(ies) end up footing the bill for most of your expenses).
There's plenty of people who make $5-50 million in a windfall and are never heard from again.
True, it’s probably that this drive is what allowed them to be billionaires in the first place.
Just to rant a bit more: the Wordpress situation makes this point even more crazy to me. Mullenweg has about 400m and instead of retiring and enjoying life, he’s arguing with anonymous users on Hacker News. No offense against hacker news but defending my life decisions on HN isn’t exactly the first thing I would do if I could do everything I ever wanted. Like, go buy a plane and take flying lessons, or go scuba diving? Nah, I’d rather justify myself on the internet.
The internet is a direct pipe to every person on earth. You have to acknowledge that this is new territory for humankind.
In fact, internet communication is much closer to dark-age "public square" type communication. Bring your soapbox to the square, talk loudly, gather a crowd, and listen to the crowd jeer or clap. We haven't had that since the industrial revolution pre-1800s (i.e. at the earliest 1700s)
For the forseeable future, we are in a situation where people will "feel" that the most authentic communication is intentionally said in-front of the internet bystanders. So a CEO posting an intimate reply to an individual with billions of people able to see the intimate reply is more "authentic" than everything else.
(Much closer to dark-age communication implies that we are closer to "old" methods of communication that disappeared for the last couple of centuries. We used to have industrial revolution-type communication medium, one-direction broadcast medium.)
I expect a lot of people with that kind of money can't enjoy life as it disconnects them from everyone else. Your friends can't afford to do those things with you, so you either end up buying friends – with all the disillusionment that goes with that – or you turn away from people and get your fix trolling computers instead.
I have a slightly different version of this. There are some other replies here to the effect of "people like to have a purpose in life". But surely "helping people share files" or whatever the Dropbox "mission" is can't be that inspiring, right? I mean, the point of starting a company like that is to make those billions. Maybe to do it successfully you need to delude yourself into thinking that mission is really important, I don't know.
But for me, if I had that kind of business success I'd cash out and go do something that feels actually important. Go get a PhD and take a crack at curing some obscure disease, or setting up a Dyson swarm around the sun, or making a great work of art, or thinking about how to improve elementary education a la Khan Academy; something like that. Then you get to have a real purpose and work toward something that most people don't just by virtue of the fact that it doesn't pay well enough, and you still get to spend plenty of time on your yacht!
The instinct to acquire resources does not have a limit. When homo sapiens evolved, such a limit would not have been a useful adaptation. There were no billionaires then.
Also it's nice to boss people around, probably for the same reason.
You and lots of people say would do something or other. I submit that it's different when you're actually in that position, as opposed to imagining it. Lots of us imagine we're going to go to the gym for years, and give up after a month or two.
Some people have made the (good in my opinion) point that this is actually survivorship bias and a lot of people actually do retire and are never heard from again once they have enough money. So people predicting what they would do aren’t necessarily that wrong, it seems that some people actually do that.
I got from the other comments that he got the 2B by owning part of the now very valuable company, not by working for a salary. Assuming he picked a good enough successor that didn’t completely ruin Dropbox, he should still have pretty much the same net worth without any work, no?
It’s not “ridiculously low.” Before the layoff they were 2700 people. That’s like a VP2 at most large tech companies and 1.5M total comp is spot on for that level.
Nope, MBAs have to learn exponential growth is impossible to accomplish forever.
Companies should be managed to be profitable, while paying employees and business expenses.
Anything other is a pipe dream that eventually blows up, but since only employees suffer while the MBA guys go to become CEO of yet another adventure, who cares. /s
The myth of exponential growth is not that companies can't grow exponentially forever (since that's the case for most companies) but rather that the valuation of these companies depends on exponential growth (it does not). Most public companies in the United states do not experience the exponential growth many tech startups do, but do perfectly well for themselves, their customers, and their employees.
No one is pushing for exponential growth. If a company wants to stop, declare a dividend, and be done with it, and let investors choose a new rodeo.
Except that isn't what happens, instead every year a new goal that has to be X % higher is set, and when expectations are not met, the employees are the ones landing on the street for stupid values of X%.
The one signing off on X% might even get a bonus for doing that, and enjoy some Bahamas vacations.
In tech sure, but in the market, many companies simply return dividends. Lots of mining stocks, retailers, commodity producers, etc don't experience exponential growth
indeed. but tech gets some new boom every 3 years and that's why no company worth their salt is going to settle on dividends. It's still growing fast, so companies expect fast growth. Even in the recession they don't want to pretend exists but knows exists.
I have an MBA and am not a CEO. I'm probably better at developing software than you, too.
But, I do get a chuckle out of what you believe is a "diss," when you're actually stating that MBA holders will not only do better in life, but they'll also control your fate.
"But, I do get a chuckle out of what you believe is a "diss," when you're actually stating that MBA holders will not only do better in life, but they'll also control your fate."
This doesn't mean it is not a diss - most parasites fare quite well, and definitely determine fates of their hosts.
>when you're actually stating that MBA holders will not only do better in life, but they'll also control your fate.
Not if I can help it. America is doomed but I can scavenge out my own little hole to settle in and see if that survives the fallout.
If there's one thing I learned, it's that tech has an amazing ability of scale that can even topple titans if you strike at the right time and place. You won't make trillions, but you can live very comfortably. And that's all I want; I don't need infinite money and exponential growth. And if I do get a company that achieves that I will keep it that way. a proper business, not a speculative stock to gamble with.
It means absolutely nothing to you, but you're the exact kind of person I'd avoid in my company at all costs. Our goals diverge too much, and that's not a bad thing. Comapnies need to have proper alignment to succeed.
Like all rules there are exceptions, and I am old enough to remember when management was battled earned from the trenches, not people thinking they could manage any random company.
It is like assuming generals can win wars straight into the battlefield after graduation from military school.
Some get lucky, most of them do not, then again the little soldiers are the ones thar have to worry with the actual outcome.
Public company CEO pay is almost always paid by shareholders not by the company itself.
It's so misleading that these "CEO compensation is 100x employee pay" stats always get kicked around like it is an apples to apples comparison. It's not.
CEO's get paid in stock which they need to redeem from shareholders. Employees get paid with cash which them redeem from the company's checking account. They are different sources of money.
It's so annoying that this keeps getting repeated, on and on and on. It's totally disingenuous.
The company's checking account also belongs to the shareholders, albeit indirectly.
The remarkable thing is how readily shareholders will accept narratives which give the CEO very large amounts of compensation. The notorious $50bn is a high mark: https://www.forbes.com/sites/antoniopequenoiv/2024/06/13/tes... - but that is very much taking value away from shareholders and handing it to the CEO in huge amounts.
It doesn't indirectly belong to share holders, it directly does.
But that doesn't change the fact that employee's are paid with money that is generated by the business itself. Stock compensation comes from the wallets of shareholders and is totally disconnected from the operations of the company (although generally proportionate).
Yes, but we can all agree that stock/$ is pretty fungible and can be exchanged for goods and services in pretty much the same way. So effectively, it is apples to apples.
Stock/cash is not fungible for the company itself. Using shareholders as an ATM is a surefire way to tank a stock, and companies tend to use it as an absolute last resort.
We aren’t talking in the context of the company though. The gp comment said it’s not an apples to apples comparison to say a CEO makes 100x an employee because CEO’s compensation is stock.
If the CEO’s stock compensation has a monetary value of $100 and the employees salary is $1, it absolutely is fair to say the CEO is compensated 100x the employee, regardless of it is stock or cash. The CEO can borrow against this and use it as effectively cash, if they are unable or do not want to exercise the options. This is such an insanely common practice and absurdly pedantic argument that I wonder why we’re even having it. Does the distinction matter? Of course it does not.
It's not apples to apples because it is in essence two different employers. The CEO does not work for the company (this why you see that $1 CEO salary so often), the CEO works for the shareholders. But the employees work for the company. They are two distinct entities with two distinct finances.
If a company does layoffs and the CEO still gets paid, that is perfectly logical because the company was never paying the CEO in the first place. Whether or not the CEO got his $5 million compensation package has no impact on whether or not the company could have laid people off, as just about everyone portrays it (and thinks how it is).
Can pretty quickly see that the CEO comp # in question is not the stock. Houston sold many times more than $1.5m in stock in 2023. The $1.5m is likely direct cash and services.
Arguably from what I've seen it is TOO random or non-performance based.
Some combination of personal dislike and unfamiliarity.
The people making the cuts are not line managers and are sometimes given very short amount of time to make their cut list. So "oh I know that person" stays vs "I have no idea what they do / they asked me a pointed question in a meeting once" goes.
I've been laid off twice, neither time has been performance based.
once i was on a team of 2 ICs and a Manager - only the manager stayed - the company is now about to fold. Other time i was let go as part of the entire US arm
Yes, most layoffs I've seen in my career are of the "mass layoff" variety, and these are generally far from being performance based.
There's just too many people, the decision making is too quick, at too high a level.. and more driven by cost / future strategy (so which teams to cut deeper).
When layoffs are random, it engenders a profound sense of betrayal among those who have diligently gone the extra mile. It severs ties and creates a chilling effect, dampening the morale of those who remain.
Employees, acutely aware that their efforts might be disregarded in the next round of cuts, become increasingly disincentivized to exceed expectations. The result is a workforce more focused on survival than excellence, fostering an environment where mediocrity thrives.
>That would be like throwing out good fruit, when there are spoiled ones.
Have you seen the industry lately? They don't care unless they have leadership who actually has tech experience. The company will float long enough for the next executive to worry about the consequences.
To put it more charitably: They may want to care but there's too much beuracracy to holistically figure out performance, and the stats measured are horrible 99% of the time anyway. So yeah, it all comes down to "vibes". Which is probably worse than random for tech workers. They won't feel short term consequences, so it's not a big deal for them if they lose a few "best and brightest" (they will probably leave after the layoff announcements anyway).
This often does happen along with layoffs when a company is in real trouble. A problem of silicon valley culture is that you basically can't fire anyone for underperformance, so you need to have these sorts of layoffs as a prophylactic measure to cull the heard. So that means you get a cycle of "overhiring" followed by "layoffs" and that is working exactly as intended.
California is at will, you can fire anyone for anything or even nothing. I'm yet to see poor performing executives take themselves out before they take out the people that actually create value. You don't need to have layoffs, you need better leaders, and they're the last ones to get culled, usually running off with bonuses for under-performance and lousy work.
Why is firing someone hurting them when it's not working out? Both the company and the person would be better off doing something else.
We have attached shame and this idea that it is "hurtful" likely because it is so rare. At a place like a hedge fund, firing the bottom 10% of people is relatively normal, so being fired can sometimes just mean "you had a bad 6 months" not "you am a terrible person who does not deserve to work anywhere" (which seems to be how tech people and Europeans think of it). In that environment, there isn't any shame involved in the firing and everyone gets on with their lives (usually including a cushy severance package).
The executive failed to ensure profitability which is their entire focus. They are the ones that should be laid off first. You're giving them a pass which is literally the crux of the problem, these people are allowed to fail up at others expense. I'm talking about the dropbox layoffs, you're talking about just cause termination which is again completely meaningless in California.
I am telling you that "layoffs" are the mechanism by which silicon valley makes just cause termination culturally acceptable. If a silicon valley firm decided to fire the bottom 5%, they would lose huge amounts of talent that doesn't want to work in a "competitive" environment. If the bottom 10-20% happen to get "laid off" every 3 years, that's just an "unfortunate oversight" and a "management oops" that they take "full responsibility" for.
These layoffs do not generally happen when executives and companies fail; they happen as a matter of course. They are, of course, accompanied by rhetoric about executive failure (again, a cultural cover), but nothing more. When executives actually fail, executives get fired.
I'm telling you I disagree and I think your explanation is rather comical. Dropbox's slow growth in 2023 and 2024 is directly tied to an under performing executive team. Executive accountability is mostly gone and you're doing a great job furthering my point by trying your hardest to explain why poor leadership is culturally acceptable.
How is Dropbox's poor performance tied specifically to a poor executive team? The end of ZIRP and a bad core product are likely more to blame. This was likely the end of dropbox no matter what the execs did.
Also, can you explain the layoffs at Google this way? The layoffs at Meta? Microsoft? TikTok? Are all of these the result of underperforming executive teams? Are they even related at all to business trouble?
Or is it perhaps something closer to what I am suggesting?
Layoffs happen in waves at these companies. It really has nothing to do with performance. They do it every time they can, and the best explanation for that is that they are trimming the fat. Companies all say "we hit hard times" when they do this, but most of them really didn't. The issues with Dropbox's core business have likely been foreseen for 5-10 years.
How is it not? They're steering the ship. They're in charge, they're the decision makers. If the company is failing, how could it not be the executives problem?
We used to live in an age where leadership meant something, when people took responsibility for their failures. Now executives make excuses, they even have people like you making excuses for them, and instead of forgoing a bonus or handing over the reigns to more qualified team, they play with peoples livelihoods and you think that's perfectly acceptable, even called it cultural.
Anyway, given the age we live in, I'm not surprised at all to see people kissing their asses.
>The end of ZIRP and a bad core product are likely more to blame. This was likely the end of dropbox no matter what the execs did.
Yeah, but we'll blame the workers anyway for "underperforming". nevermind that the only real change was that they got harder to get tax breaks on.
>Are they even related at all to business trouble?
I kinda agree with you, but also: yes they all had business troubles. Meta fumbles with VR hard and shuttered its in-house VR studio that otherwise put out well acclamed games. Microsoft is on shakey ground with OpenAI and their Xbox division is fumbling from the worst time to spend $70m on an aquisition. Tiktok may or may not be banned from the Unites States and that will take a hit (this one isn't really their fault, but alas).
>Why is firing someone hurting them when it's not working out?
"Not working out" is doing a Herculean amount of lifting. In this case, "not working out" is "we want to make earnings calls look better and do more work with less people". Yes, you are hurting everyone in your company by doing that.
>We have attached shame and this idea that it is "hurtful" likely because it is so rare
Yes. I'd really hope that the singular good thing from this 5,6,8 round interview cycle for hiring that you somehow didn't hire someone who managed to underperform on the job. Maybe I'd even agree with you about firing culture if I believed for a second that it meant they'd be more lax in the 4 month interview process and do more probation trials.
But that's just hopes and dreams for now.
>At a place like a hedge fund, firing the bottom 10% of people is relatively normal, so being fired can sometimes just mean "you had a bad 6 months" not "you am a terrible person who does not deserve to work anywhere" (which seems to be how tech people and Europeans think of it)
Again, tell that to the recruiters. You're seeing it among peers, but there's a lot of stigma that if you got laid off you must have been "one of the bad ones". It's absolutely not true, but with so much fascination on "why did you leave your job" you can see how people really feel.
>there isn't any shame involved in the firing and everyone gets on with their lives (usually including a cushy severance package).
Yeah, I wish. Not all tech companies are created equally.
Mind you I hate stack ranking, but if you're going to something as fast paced as a hedge fund, those 6 months will pay you well. So you're rolling the dice youself there.
> Again, tell that to the recruiters. You're seeing it among peers, but there's a lot of stigma that if you got laid off you must have been "one of the bad ones". It's absolutely not true, but with so much fascination on "why did you leave your job" you can see how people really feel.
Yeah, I agree with you that this is mostly on the risk-aversion of recruiters. There seems to have been this vicious cycle of firing being harder and more stigmatized combined with companies being more picky when they hire. Nobody really benefits from this, though.
What you are referring to is called rightsizing and it's taught in business schools, but almost never implemented well. I would guess it's because it takes to long to figure out who's weak and who's not and they are in a hurry to cut costs.
This is a joke, right?
If a company is underperforming, then the underperformers are the first to go.
Market economies require efficiency. Capital flows in the direction of success.
Impeding this flow with regulation is a great way to create a malfunctioning economy.
Nope. it REALLY depends. Sometimes underperformers are focused on. Sometimes worst ratio of performance to pay is focused on. Sometimes it's random if lawsuits are a worry (AKA they want to layoff the older workers but need to shuffle in some others so it isn't suspicious). Sometimes it's purely vibes for who's picking who to be laid off.
There's no consistent layoff strategy. Especially not in times like this.
> Impeding this flow with regulation is a great way to create a malfunctioning economy.
It's not any industry anywhere. Any layoff thread on HN is people saying what they wish things were but framing it as "this is how everyone else does it this one company is being greedy" when it's not the case 99% of the time.
> COBRA is the single largest expense for departing employees.
Life pro tip: Do not use COBRA!!!!! It is almost always much, much cheaper to find an ACA compliant healthcare plan on your state's health insurance market. For one thing the plans will often be cheaper (though with fewer features). For another ACA plans qualify for tax credits, etc and COBRA doesn't.
When I got laid off I made one of the worst financial mistakes of my life keeping my employer's high-deductible plan via COBRA. I stupidly figured it had to somehow still work out to be cheaper than shopping for private insurance. Boy was I wrong! Between the "high deductible" part and the fact the plan wasn't able to qualify for tax credits I overpaid my medical expenses by about $10,000 over the course of a year. Had I gone with even a "bronze" level ACA compliant plan that would have been cash in my pocket that would have helped out a lot while I was looking for work.
The big reason was my medication was like $800/mo. And on my employer's plan once I hit my $3500 deductible it went to $0/mo. This wasn't a problem when my former employer picked up most of the insurance premium for my high deductible plan but with COBRA you are paying the entire premium! And for my use case, medication was my top medical expense so I was paying a hefty premium for a fancy health plan that didn't actually cover my expenses.
A "regular deductible" ACA plan would have made much more sense in my unemployed scenario as the premium was not only lower but the medication was generic and would have only been like a $23 copay!
Always, always bust out Excel and compare the full cost of healthcare on different plans. Compute the total cost of your medications, how & when you'll hit things like your deductible, what tax credits & deductions apply, etc. What made rational financial sense while employed might not make sense when unemployed or buying your own health plan. But you have to find out for yourself. Rarely does it make sense to continue paying your employers health plan via COBRA. After loosing your job you have like a 30 day window to switch plans before you will be locked into your COBRA plan for the remainder of the year -- do not dilly dally around, figure it out now!
Forget ACA compliant health plans. When I was laid off, since my income / week was $0 (Oregon), we just got medicaid for my kids, and pregnant wife, and I paid an extremely modest amount for a solid plan. There is no reason to use COBRA. It's a relic and probably should be done away with.
> It's a relic and probably should be done away with.
This is the conclusion I came away with as well. It made sense back before there was the public health insurance marketplace.
...but I tell you what there was nobody out there who told me "hey, revisit your health insurance" and it cost me a non-trivial amount of real money to learn that lesson!
Please look at your individual situation and don't take this suggestion blindly. If you've already contributed significantly to your deductible or out-of-pocket maximum it can definitely make sense to continue with COBRA.
Also you can game the COBRA enrollment window. You have 60 days from your loss of coverage to elect COBRA and once you elect COBRA you have another 45 days to submit payment. You can elect on the 59th/60th day and then pay 45 days later if you ended up needing the coverage. If you don't need the coverage don't pay.
> Please look at your individual situation and don't take this suggestion blindly.
Exactly. The message here is it is incredibly important to re-evaluate your healthcare plan. Every household is going to be different! Bust out excel and crunch the numbers.
Please check though, because my kids qualified for medicaid despite my six-figure income. The state of Oregon qualifies by week, so even if you made $10 million / year, if your expected income in the week is $0, you qualify for that week (yes, I literally asked them this question, and he said yes, that is how it works). According to our DHS, there is no upper limit on yearly income that would mandate a clawback of benefits received[1] . And in Oregon at least, OHP is accepted everywhere, and is usually better than the platinum plans (no payments taken from users, ever)
[1] As another example, I asked if I didn't work Jan - Nov, and then made $10 million in December, would my kids qualify for mediacid Jan - Nov, and he said yes.
That is interesting to know, and does seem to be true if that $10 million is the lottery and is truly random income and is truly instantaneous. If you are working on a company that you sell, it may not be the case.
that is not what I was told. I bluntly pointed out that I expected to make good money that year despite being laid off (and I did), and he said it did not matter, since I was unemployed, my expectation for the current week was zero. It has nothing to do with whether you have a lotto ticket or a company exit.
Although obviously if you're working at your company, you are not unemployed and do not have zero income expectation.
When I was laid off in 2023, my mom and aunt told me to go on Medicaid. I thought it was a bit ridiculous since I had already made well above the poverty line, and was planning on still pulling in a substantial amount in the same year despite the lay off (I was laid off in January). I was going to pay several thousand a month for COBRA, and I thought my mom and aunt were crazy, since they are the sort to claim everyone's using welfare (my aunt retired early and is on medicaid, since her income is zero, so I guess she has some evidence to support her claim).
Anyway, so I did look into it mainly for the 'I told you so' aspect, to 'prove' to her that the social safety net did not exist as she imagined it.
However, to my surprise, it did, and within an hour of filling in the form online, I got free medicaid for my kids, and highly subsidized marketplace plans for my wife and I. In my state, medicaid eligibility is based on expected income / week. According to the man on the line from the state, even if I did end up making more, since my expected income was $0 (being unemployed), I still qualified! My wife's premium / month was like $100 (she was pregnant so qualified for more).
I did tell several colleagues about this, but they didn't believe me and forked over thousands of dollars.
In my state, medicaid is superior to my old PPO plan. For one, there is no co-pay and my daughter ended up needing major orthopedic intervention (severed finger) and we paid $0 out of a total cost of $150k. Although you're assigned a doctor, it's still essentially a PPO plan (you can see whomever you want whenever you wanted, so we stuck with our old doctors).
So, please avail yourself of the very safety net you pay for. COBRA is basically always a bad deal. There is almost certainly a subsidized plan out there for you. There's a pervasive myth that the social safety net doesn't exist in the USA and I almost lost $10k (or more with my daughter's incident) because I didn't do the obvious. I also learned that should I ever want to leave my job to start a business, I honestly really don't need to worry about health insurance.
i wish they would focus on what the users wants instead of making their client more and more invasive, and when I complain about it just explaining that they have a lot of privacy controls and I shouldn’t worry about their invasive client.
i would love to use dropbox over icloud, but I just want a drive that works and a way to turn off all their weird features.
Kind of surprising to me, because I think I've tried every large competitor in the space, and have found there to be a gulf between the Dropbox UX and everyone else. I'm more than willing to pay their premium price. I was hoping Proton Drive would compete, but I felt like I was beta testing an inferior product.
Anecdotal: I know a lot of people who use Dropbox, I don't know even one person who pays it. They pay for iCloud, probably cause it makes the iPhone experience even more convenient, but not Dropbox. I also don't pay for it.
Anecdotally, having been in client services, I saw Dropbox use plummet on both the client and agency side once the pandemic hit. People switched from syncing files to working directly on the same document in the cloud (e.g. Microsoft Word -> Google Docs, Keynote -> Google Slides, Sketch -> Figma)
In 2024, I wouldn't invest in any company that's based on "Files"
The premium experience does have a heavy price tag attached to it since they repeatedly increased the pricing. In the UK, the first plan is now £7.99 / month.
This eventually led me away from Dropbox and I am now an iCloud user - the convenience and cheap prices eventually convinced me, even though I wish a Linux client existed.
Proton Drive through Proton Unlimited. I have my e-mail setup through Proton already, so the plan was going to be to consolidate, and use Proton for cloud storage as well. I have since downgraded back to Mail Plus. The reason being a pretty bad experience with Drive.
I honestly don't remember the fine-grained details, sorry, but it had something to do with waking up one morning to my remaining storage being consumed by every file in Drive being duplicated, with a title "(overwritten 21h4m)" or something like that appended to each one.
I can't remember what caused it, but what I do remember is that there was no way to remediate it through the Drive app itself. Meaning, if I wanted to return my drive back to its original state, I would be burning my own time to write the script to do it, or I would be burning my own time to research some other solution. I couldn't believe the feature was shipped in that state.
In my opinion, if there exists a feature that leads to all of my files being duplicated, then it shouldn't be released unless there has been thorough testing against that feature's ability to remediate the fubarred status that it has enacted to "protect" my files. In this case, I think the feature was version history.
So the three conclusions I could come to were that there was little to no testing, inexperienced engineers, or a project manager that isn't managing the project particularly well. In any case, I don't want to feel like I'm beta testing features with my most important files, so I went back to Dropbox and its more mature app. Haven't looked back since.
I don’t know how but over time all the “new fangled” tech companies have the same approach to hiring. They just keep growing headcount as its own workstream. Google started it I think, their HR just interviews and grabs the talent without a need. Matching employees to a role that already got hired to a company is just insane. That is the reason why I never interview with anyone that wants to do a generic hire. These HR folks are purely assessed on how many they hire and so they keep hiring.
This just makes me respect the old school processes that apple and nvidia follow that much more. They are the best run companies in tech
It's clear they are preparing for an acquisition. They are profitable with great gross margins and cash in the bank. With 20% workforce reduction they are going to be very attractive to the salesforce of the world.
You are welcome to start a business that competes with Apple/Alphabet/Microsoft/Amazon, and see if you can survive without raising prices or making bets that may not succeed and cause you to fire people.
Dropbox makes over 600 M per quarter and about $2.53B per year. They dont need to do layoffs. This is a choice to desctroy jobs to temporarily enrich shareholders to the detriment of the company itself. Classic short-term decision making. https://stockanalysis.com/stocks/dbx/revenue/
How is it to the detriment of the company?
I've been a dropbox subscriber I think since they launched. Over the years they've added some nice features here and there, but I feel like at this point they could scale all the way back to server admins and sustaining engineering and be perfectly fine. This is another case of I can't imaging what all of those people actually DO day to day.
Financially, perhaps not, but maybe the product is now done? I mean, what more can you really add to the service at this point? There is still work to do with maintenance, support, etc. but that doesn't require the same level of employment as when you are still building.
I did, and found that it's supposed to apply to early stage startups. Dropbox isn't an early stage startup anymore. At what point will investors have to be content with lower returns that are still in double digits and better than the vast majority of companies?
This is a stack ranking layoff. They will fill the roles with new roles to teams they believe are more vital to achieving company goals. Pretty much every tech company has operated this way the last couple years. They’ve fired 10-20% and have replaced all those heads pretty much across the board.
and then after the first full clock cycle, middle managers are hiring people to fire them, to keep their core dev team intact so that it can solve problems that take longer than 90 days
Makes sense and was only a matter of time considering it has essentially no revenue growth to date this year and Non-GAAP margins in the low-to-mid 30's %. With near-0% revenue growth, investors will expect a SaaS company to post 40%+ margins.
Any easy to migrate to alternative to Dropbox? I don't mind paying, but Linux support and light sync client is a must. And I don't need more than 1GB storage.
Nextcloud if you don’t mind a mediocre piece of PHP software. It syncs files well for me, but a lot of the other apps are clunky and perpetually half finished (calendar, photos, etc.) but with some elbow grease I find it usable.
Dropbox was where I first encountered the infantilization of the workplace, with animated emojis all over your biannual performance review. It was a shock, having come from a real company run by adults. Now everyone thinks this is normal, at least at companies that use Slack where 40% of the traffic is animated emojis.
Exactly how I felt working at Google with their “open concepts”. Thankfully I am back at the University of Washington in a cubicle now, away from the yuppy babies. God knows where people get these ridiculous ideas.
I've never been a big fan of any such language, regardless of layoff context. Do enough people prefer it that it's actually a net win for business by way of improved morale or whatever? I wonder if it's been seriously studied.
Then again, I'm also of the mind that email addresses (or whatever other contact methods) ought to belong to functional areas/positions rather than to people (other than for person-specific topics such as time off, personal development, etc.) so turnover doesn't lead to questions of where to send questions/requests. I assume this is an unusually inhumane outlook!
I agree it's actually a well crafted layoff announcement. I wouldn't even faulting for using Dropboxers. If layoffs have to happen there are much worse ways of announcing and implementing them than this. Still very unpleasant if you're affected... (been there...)
---
Listen up: 20% of you—528 people—are out. This isn’t a discussion. I’m pulling the plug on your roles. That’s it.
Why? Because we’re not making enough money to keep this bloated mess afloat.
We’ve been weighed down by too many damn layers, too much bureaucracy, and soft sales. We’re not here to carry dead weight. If your department wasn’t delivering, you’re gone. We’re only keeping what’s absolutely necessary to survive.
What’s next
This is a brutal market, and we’re not interested in getting left behind while our competitors rake it in. We’re cutting back hard and doubling down on what we think might actually make us cash. This is a no-BS, keep-up-or-get-out game now. You’ll hear more about our plans for 2025 soon.
What you get if we’re cutting you loose
Here’s what you can expect, take it or leave it:
Severance: 16 weeks’ pay, plus an extra week for every year you put in here. If you’re international, you’ll get what’s legally required. No more, no less.
Equity: We’ll throw you your Q4 vest.
Bonus payout: If you were on a bonus plan, you’ll get a prorated payout based on what we predict you would’ve gotten.
Leave payouts: If you had any paid leave left, you’ll get a check for it.
Visa holders: We’re giving you a bit more time and a consult for your next steps. After that, you’re on your own.
Healthcare
US folks: Six more months of COBRA.
Canada folks: One month of healthcare.
All of you: You can still use Modern Health for therapy. You might need it.
Devices
Keep whatever company devices you’ve got. We’re not taking them back.
Job placement
You’ll get some career coaching and placement help, but after that, it’s up to you.
What’s happening next
We’ll give the rest of the details later today. If you’ve got questions, there’s a Town Hall later this week.
For those who got cut: thanks for your work.
---
Kind of crazy that Dropbox has 2600 employees no? What do they all do? Isn't Dropbox finished?
I guess there's a very small number maintaining the core Dropbox stuff and most of them are working on speculative projects to increase revenue (e.g. this Dash thing they mentioned)?
No, the HN consensus is they are massive geniuses for moving out of AWS. Nobody here ever accounts for the extra datacenter, hardware platform, hardware ops, infrastructure ops, etc.
That's quite unlikely. If Dropbox could save a decent amount of their engineering effort using LLMs with 20% less people, then they could also increase their engineering effort by a decent amount using LLMs and keeping the same workforce. Assuming the team aren't completely useless, being able to go faster would be significantly more valuable than any cost saving made here.
I dont know… i felt like the eng facing llm work at my company was distracting and not useful. I can only see Dropbox and others obsessing over LLMs as clinging to relevancy. At the end of the day we will just get a chat bot and a handful of niche projects AI investments paid off for
Incredibly disappointing, but not surprising. Dropbox is no longer in its growth phase, and needs to settle into maintenance mode - enjoying a steady stream of revenue while continuously optimizing expenses, with a bit set aside for R&D to try and find the next big growth opportunity. Severance packages look really good, with the caveat that these figures really should be _the default_ in Corporate America at this point, like our EU peers.
I just wish the language in the announcement reflected this reality. Instead, it feels like a lot of desperation measures from current tech companies: overly optimistic to the point of naively dismissing or ignoring reality, and believing that if we just keep building then we’ll continue to grow forever.
Jokes aside, how do you end up having more than 500 excess people than what you need? What is management exactly doing during the time they went from 1 excess person to 500? Did they just hope the "macroeconomic headwinds" would become tailwinds? Didn't they at some point see that they have more people than valuable work, and maybe we should deal with that problem instead of hiring another team to place even more bets?
Actually, I know why. It's because they have too much money and when you have too much cash, you start splurging without thinking and then one day the chickens come home to roost.
Honestly, I would not hire a single manager from these big companies because they operate in an environment where they're playing with monopoly money and don't know what reality is. There's something to be said about spending within your limits and not splurging on the next shiny object. Way back when it was called cost control and operating within a budget. All that management theory seems to have been lost in the age of cash injections and valuations based on everything except retained earnings.
> Actually, I know why. It's because they have too much money and when you have too much cash, you start splurging without thinking and then one day the chickens come home to roost.
This is an incredibly uncharitable and shallow take, on the level of that comment many years ago that said something along the lines of "what's so interesting about Dropbox? It's just rsync, I could build it in a weekend".
We don't operate in a perfectly legible world, especially more so when it comes to people. It's all bets and risks and whatnot.
If you or anyone has the power to create perfectly aligned and efficient organization, I'm waiting here to see you build large multi-trillion dollar companies. Let me know how it goes.
My understanding is DropBox was trying to transition from sync and share to being a multi-product document-centric company (look at acquisitions like HelloSign).
One possibility is they staffed up a bunch of projects on bets that ultimately didn’t turn into viable products, and are now pulling the plug.
More like the cloud sync functions out of the box on Google, Microsoft and Apple products caught up in features and already got good enough for the customer base of these to not bother paying extra for Dropbox no matter how much better they would have been. See Evernote.
It's difficult to go against Apple, Google and Microsoft when they're vertically integrated and can squeeze you on all sides offering an OS, email, browser, cloud sync, document editing, etc with seamless integration between them, while you're just a cloud sync service on their OS. You don't have any moat, while they do. There's no way you can compete with them from that position unless the government were to break up their vertical integration for anti-competitive practices.
I think that is why Dropbox has been trying to diversify their offerings. They know as well as the rest of us do that cloud storage that's only cloud storage and not much else will have serious trouble competing with cloud storage that you also need to have to work conveniently with Google Docs, or Office 365, or whatever.
But, as parent poster pointed out, taking on that new work requires hiring people to do it. But that's expensive, and those new products need to start generating revenue quickly in order to cover the increased payroll costs.
>For me, Dropbox's moat and USP is that they make all of their money from file storage, giving me some confidence that they'll ensure it keeps working.
To me that's now become a red flag with these companies. Not speaking of Dropbox in particular but all these start-ups from the past that offered a free new innovative product/service for Android/iOS went to shit soon after Appel and Google copied and integrate similar functionality into the OS out of the box, leading to investor money drying up and the company suddenly paywalling and gouging existing users to make money to survive. Look at Evernote, LastPasss, Cerberus, etc. but also Amazon, Netflix, etc, enshitification galore.
Google and Apple are less likely to do that since they already make more money than God and tend not to want to fuck up their reputation just to squeeze a few more bucks from their users.
That's why I don't trust these small app companies anymore, since they'll get squeezed out by Apple, Microsoft and Google, and enshitification will ensure. The app is good in the beginning for a few years when VC money is abundant and their goal is user growth at any cost, but after that suddenly once you're locked in, you get paywalled, as the company tries to squeeze more money from you so VCs can get their money back. Rinse and repeat. So no thanks, I got burned a few times already.
The problem is that it’s unclear consumers actually ever wanted Dropbox to become any more than a sync and share company, or to deal with the resultant complexity that that will bring to what has been a beautifully simple product. But they had to do that to justify Sky-high valuations.
> This is an incredibly uncharitable and shallow take,
So is yours.
> We don't operate in a perfectly legible world, especially more so when it comes to people. It's all bets and risks and whatnot.
What bet was dropbox taking by overexpanding their workforce by 20%?
> If you or anyone has the power to create perfectly aligned and efficient organization, I'm waiting here to see you build large multi-trillion dollar companies. Let me know how it goes.
This is an interesting statement. Dropbox is a single digit $billions company, not trillions.
> What bet was dropbox taking by overexpanding their workforce by 20%?
When asking this question, I think it's good to remind ourselves how much we don't know. We don't know if they overstaffed in a push to expand their business that didn't work out, we don't know if the had an older operating model that went from "efficient" to "inefficient" as scale and market dynamics changed. We don't know if advances in productivity to tools, or changes to major client accounts, impacted their staffing needs. Determining whether one is "overstaffed" is a multi-factorial determination that can be false one month and true the next.
Set aside whether it's uncharitable to just assume management oversight or idiocy - it's hubristic. Having said that, it doesn't mean the assumption is wrong, it could be exactly right! But it might not be.
The OP made strong statements with weak backing. Their statements were also placing blame. Your profile says you're an SRE--can you imagine a post mortem with that kind of attitude?
I think what people forget about layoffs is that all those "excess" employees who have been there didn't sit around doing nothing during the time they were there.
Those 20% of Dropbox staff wrote a bunch of code, made a bunch of sales, and did a lot of other tasks that will have an impact even after they don't work there anymore.
Even though they are being laid off, their contributions still have a positive impact on the company. Even the government treats it this way from a taxation basis: software that is written by engineers is treated as a depreciating asset that is amortized over 5 years.
In other words, if I write some code that consumes $100 worth of my labor, that engineering work is considered by the IRS to be an asset to the company with book value from now until 5 years from now. If I'm laid off, the company still has that $100 asset on their books, which depreciates over 5 years.
It's perfectly normal for a business to plan out their future based on uncertainty and risks. If they only hired people they knew 100% they would need forever, they'd miss out on a lot of opportunities.
Extending this logic far out enough and we could say ridiculous things like "How could IBM be so irresponsible to hire hundreds of thousands of engineers to make business mainframes when their marketshare will dwindle to a sliver in 40 years?"
The truth is that businesses need the employees that they need at a point in time, and that number is constantly changing.
> The truth is that businesses need the employees that they need at a point in time, and that number is constantly changing.
Another truth is that we've collectivly decided that all people must be working in order to "earn" their right to exist. So anytime there is a large layoff like this, there are a lot of new stories about people relocating, making major changes to their lives, some for the better, some for the worse, and some for the absolutely devastaing.
One must not forget that these 'human resources' are more than just a number.
I'm all for better protections for workers, and I think that the US should make companies give employees more notice, or alternatively make unemployment benefits a program that is more automatic, a full 100% of salary instead of being capped, and biased more toward the employee. I.e., I think a company should have to prove to a judge that an employee was fired with cause or quit voluntarily before the employee loses their benefits.
I totally agree with the idea that the benefits of at-will no-notice termination employment are lopsided in favor of the company, but the flip side of that arrangement is that it's very easy to get a new job in the US compared to many other places. It's easy to be hired on a short conversation and a handshake in an at-will environment.
Depends. If those employees truly are excess and they haven't been doing much for the past couple years, they might be just producing tech debt. Cancelled projects and migrations have negative value. I doubt this entire 20% was made redundant overnight, which means they haven't been valuable for some time.
> Honestly, I would not hire a single manager from these big companies because they operate in an environment where they're playing with monopoly money and don't know what reality is.
In part, to unpack why part of this glib take is missing the complexity, "don't know what reality is", is that finding reality is slow and costly.
Perhaps your team provides a platform which is used internally by several other teams building various products. It supports a bunch of use cases, but it's hard to evaluate the actual ROI of the platform you provide, both because no one knows how much better/worse those products would have been without your platform. Would they have taken months longer to implement? Would they have not been possible without spinning up a team like yours?
Further, some of those products actually are used by paying customers, and others are still in development. Of the products used by paying customers, it's unclear which they would actually pay to use vs which they use because it's available in their subscription basket (e.g. is Dropbox Paper making money or is it just that some Dropbox customers use it but would pay the same sync subscription if Paper was killed?). Of the products that are not yet in customers hands, how should you value them? If your small team supports multiple in-development products, that must be worth something even if they're not revenue-producing yet.
Similarly, suppose you're a manager who runs a team building a product which has dependencies on multiple platform/infra teams -- do you really have visibility into the real costs that your team's requests create? Can you really know the ROI of your team, to guide choices about various investments?
This kind of ambiguity means that even when leadership wants to see which teams are really contributing value and how much, it's quite difficult to see. Teams may optimistically estimate their own value because they cannot see all of the costs to which they contribute, or because they cannot see which revenue-affiliated use is actually valuable.
Open the "More" menu in your Dropbox interface and I think you may be surprised at how many different products they have.
I am sure they're not trying to be a Microsoft of Google, but they're trying to make a niche in document handling, file sending, password management, a lot of those little things that are something of a pain for many businesses.
I think if you compare what Dropbox is offering at $15/user/month to Microsoft 365, there are a bunch of things that Microsoft isn't really covering or isn't covering as well (and vice versa, to be fair). For example, the ability to take e-signatures, document watermarking, facilitating out-of-organization file transfers, etc.
I also think they compete quite well with Amazon Drive, considering that Amazon Drive was discontinued.
My point is that this is probably the case for most users; the "more" doesn't mean anything because it's some functionality created by underemployed product managers rather than things that customers actually need/want to pay for. If you have to point out "hey, look here under this 'more' menu", then it's not part of the primary value proposition for the product and not why someone would pick that product. Sure, it might be that it is useful for some subset of users, but that you need to wave people down to show them that value means that it's probably not that valuable.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
This question always gets posted to HN, and is always the top comment whenever an article talks about how many people Company XYZ has. It seems like a lot of people just have never worked for a company that's growing (in terms of both profit and the amount of _stuff_ they are trying to do). Companies' need for people grows quadratically in proportion to the amount they are trying to do, not linearly. If it takes a staff of 20 to deal with 2 "units of work", it's going to take many more than 40 to deal with 4 units, more like 80. For 10 units of work, we're talking a staff of 500. You need all of these people to manage all of the growing internal network of complexity and yes bureaucracy that forms whenever you need to get people to work together. For every N people you hire, you'll need a manager to manage them, and for every N of those managers, you'll need a second level manager, and so on. You also start needing to actually deal with legal and regulatory compliance (rather than the yolo approach most startups take), you need to deal with HR and payroll for all these new people, you need to deal with power-of-2-scaling training and internal documentation needs. And all of those people you hire to do these things need their own managers and on and on and on.
I've never seen a company successfully scale what they are trying to do without needing a ton of people. Maybe every company I've ever worked at is just inefficient but I don't believe it.
> This question always gets posted to HN, and is always the top comment whenever an article talks about how many people Company XYZ has.
Perhaps because there hasn't been a good answer yet.
> For every N people you hire, you'll need a manager to manage them, and for every N of those managers, you'll need a second level manager, and so on.
But clearly that's not absolutely necessary, because already we know that two uncoordinated companies can make 4 units with 20 staff each. If the second level manager isn't providing enough value in terms of eliminating duplicated work then they shouldn't be hired.
Of course diminishing returns are going to set in, and bureaucratic inefficiency is a law of nature, but I see your answer as more shallow a dismissal than the question deserves.
And not to mention acquisitions come with their engineers, sales staff, support and management crew.
The leadership should have been rebalancing yearly and quarterly in small chunks so they’re not in a position like this. It’s also a strategic play, while they come out with their major AI move next. That’s my guess. Gotta satisfy that board somehow
Dropbox is public and has actual profits. I think your comment is not accurate.
Instead I think the company has plateaued in growth and thus they need to cut back spending otherwise they will have falling profits and no growth - which is worse than just no growth.
If you don’t have growth you have to treat this as a PE firm would. You cut spending to a minimum while ensuring you keep your customers, thus maximizing profit to assets ratio. A lot of companies do not have growth but are great money machines. It may be that this is the mature stage for Dropbox.
A P/E on its own is not good or bad. If the company’s earnings are in decline you would expect a low P/E, and if they were growing aggressively then you would expect a high P/E. It is only when there is a mismatch when the ratio becomes interesting. I am not saying it isn’t interesting in this case but the comment you are replying to does not tell any information that would lead to the conclusion it is “quite good.”
Yeah if there is no growth but a lot of earnings the stock should probably start to pay dividends no? Otherwise what is it doing with all that cash it is generating?
> Didn't they at some point see that they have more people than valuable work
Product roadmap probably had some ambitious ideas that got scrapped when earlier steps proved to not be marginal revenue generators.
Jobs said it best: Dropbox is a feature not a product. All their efforts to make it a product (let alone a platform!) have worked against usability and alienated a lot of users. I am hopeful these layoffs signify a return to sanity in a company that seems to be leading the charge in racking up unforced errors.
They were (I think) first to market with fast, cheap cloud storage but at this point there's just too much competition and not enough differentiation. I have only the vaguest awareness of them trying to build some value adds to make Dropbox more of a collaboration tool, but I've never seen it get any adoption. I'm guessing those are the LOBs getting cut with this announcement.
I switched to OneDrive when it started getting bundled in free with Office 365. I also tried iCloud when it came in the Apple One subscription. Both are total shit compared to Dropbox. The sharing in iCloud is nothing short of laughable and OneDrive is just buggy Microsoft garbage (on my Mac - might be better on Windows). I am planning to move back to Dropbox which says something - I’d rather pay than use competitors’ products that come to me for “free”.
That said, I’d rather the company stick to its fundamentals with no further feature creep and focus on lower subscription cost rather than features to justify higher costs.
In my experience a lot of hiring in those big or publicly traded companies is to "build the structure to get promoted".
When you're big, investors and banks and auditors don't like flat structures with a lot of individual contributors. A vertical structure is a must to go public. The rest is people playing the game they're forced into.
> When you're big, investors and banks and auditors don't like flat structures with a lot of individual contributors. A vertical structure is a must to go public. The rest is people playing the game they're forced into.
Might be the first time I've heard this hot take out. What makes you think banks care what the org structure is for a public company? Banks don't care for size as long as the company is fiscally prudent and can prove it. They do check silly metrics sometimes like revenue per employee, but they really don't give a damn how your company is structured. By that metric, 2012 frat club Facebook wouldn't have been touched - yet they had like 10 investment banks frontrunning their book. In fact, I'd say 2012 Facebook IPO was the trigger for a lot of banks not caring about such silly things.
As a counterpoint to your argument, there are 200-500 employee biotechs not generating meaningful revenue that are trading publicly (and which went public without a SPAC play). The decision on who gets to go public falls on the exchange, not on the banks - they simply sell your stock to their investor list, and a flat structure with fewer than needed employees is actually a great selling point for a bank.
>In my experience a lot of hiring in those big or publicly traded companies is to "build the structure to get promoted".
This comment should be at the top. Not just at the top of the thread, but at the top of HN homepage.
It's how during the pandemic many companies just suddenly doubled their headcount without any extra output in products or quality, and now we're seeing somewhat of a correction to that with all the layoffs.
It's how you see people in tech hubs climb to the top of some large companies despite never having worked longer than a year at any company. Nothing against job hopping but I ask myself what skills and value people like that actually bring, who have 10x 1-year of experience, as they're never in a place long enough get to see the end results of their work and decisions, if they're good or bad, they barely pass the onboarding stage.
It's also how many of these large orgs end up failing long term. Look at Intel now, or german auto makers, as the goal of each worker there becomes gaming the system to getting yourself a promotion at the cost of the org as a whole, instead of adding value to get a promotion, since the org is very bad at setting the right goals and incentives for the workers. Google and the like who have a monopoly with an impossible moat or an infinite money cheat can resist this enshitification much much longer than the rest of the companies.
I'm not even mad, in the end most people are just playing the game, they don't get to write the rules of the game, and the ones who do are out of touch with reality so they can't be mad when people try to game it for their personal advantage.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
There never is an excess amount of workers (sure, there probably are 4-5 exceptions). What happens is that they need those employees, but instead are going to demand that the employees that are left pick up the slack. Which they will because they need a roof over their head.
Those companies are merely cutting costs, they don't actually have any excess employee.
It's not black and white like this. There is such a thing as having to many employees and such a thing as having too little. I think realistically, most of the time, it's a mix.
People are hired to deliver what's on product and/or engineering roadmaps. If the roadmaps are less ambitious, it becomes pretty easy to justify headcount reductions.
It's also less labor intensive to focus on a few core areas, making smaller incremental improvements than doing that PLUS launching big ambitious greenfield projects.
Also, remember how people used to say "Startup X is a bad idea because <established tech company> could just clone you in 6 months"? Well, those ideas are now back on the menu for entrepreneurs because bigger tech firms are now running too lean for quixotic defensive plays like that.
It has been even more than 500 excess employees. 300 were laid off in January 2021, and another 500 in April 2023. The percentages imply that headcount bounced around from 2800 down to 2500, up to 3100, down to 2500, up to 2600, and now down to 2100.
These same macroeconomic headwinds have existed for some time now, and the fundamentals of Dropbox’s core business commoditization haven’t changed for the better.
The problem is we live in a society now where everyone has a public platform to promote themselves (linkedin etc) and there are a lot of ruthlessly ambitious narcisists who put self promotion and resume building ahead of everything else.
So they muscle into a team lead or manager position and grow the team, because it looks good to post on linked in "hey I'm growing my team" and it doesn't matter if the team needs another person.
And who cares if the company is then stuck with surplus employees, not the person who hired them because they have moved on and up at another company.
I have a offtopic but related question. Why are our taxes still calculated in stepwise bracket manner. Why not a smooth curve? We have the mathematical and technical knowhow to implement it. Coming back to the Dropbox layoffs, why was this decision a drastic stepwise reduction. Not a smooth curve over a period of say 1 year.
>understanding the output of knowledge workers is a famously difficult task
That's why large companies don't look at individual worker output (performance reviews are mostly performative and subjective) and just look at stock prices and profits.
If "line goes up", it means workers as a whole must be doing a good job , even if individually many might not be good at their jobs, but as long as line goes up, nobody cares to look too deep into the hows and whys.
If line stops going up, then they start laying them off more or less randomly or forcing RTO, or such things regardless of individual performance.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
If you bet on growth/new features but your current and future customer base are going out of business or downsizing and you have to switch to more of a survival strategy.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
It's actually a pretty simple risk/reward equation.
The risk of understaffing a company is greater than the risk of overstaffing a company.
If you overstaff a company, the solution is quick and easy. If you understaff a company, the solution is extremely painful and takes a very long time to fix.
E.g. it takes 1 day to fire someone, but 9 months to hire/onboard someone. So to ensure the staffing isn't a bottleneck for growth, the obvious answer is to err on the side of overstaffing.
TLDR: You need to hire and onboard people before you actually need them. If hiring and onboarding someone takes 9 months, you need to guess how many resources you'll need a year from now, and hope that your estimation is accurate. (And obviously a lot of companies over-estimated how many people they would need, hence lay offs)
If you're running a SaaS that isn't customer-interaction heavy, you can usually get away with dropping about 80% of your technical staff (if, of course, you pick the correct 20%, which is not easy).
Having worked in several startups through the early growth stage, it's just surprising how much you don't get more done with, say, a 500 employee company than a 50 employee company.
There is a ton of room to grow less and maintain more, and it's a real struggle for a business to decide its product is done with major growth and the associated need for a large staff.
Staffing your business (or even team) with the right number of people to accomplish a job is a real challenge that the majority of managers don't engage with, instead simply trying to grow their little kingdom to the largest size they can, both for intrinsic power reasons, and also to foster greater jobs for themselves later on.
If I see a manager put "led a team of 40" on their resume, in the interview, I ask "did you need 40 people? Did you need more, did you need less, and how would you have found out?" and the number of times this completely catches them off guard is staggering. It's like... did you choose that number for a reason? Or was that just the most you could fit in your budget?
And sure many hands make light work, but there's an inflection point where the sheer weight of your organization becomes a liability, where getting anything done or changed requires the involvement of so many people that most just don't bother unless it's an emergency. That's how you get corporate rot, and that's how you get all the massive companies we rag on here about all the time who have been making like, 5 products since before most of us were born that everyone fucking hates but everyone uses because everyone else does.
I'd like to emphasize further the but. The speed of tasks scales with the inverse log of the organization size.
In other words, as you get bigger, every project gets slower, regardless of how many people you have working on it. A project that would take a week in a tiny organization might take a month in a medium organzation and 2 quarters in a large organization. Sometimes there are good reasons for this, sometimes not.
In a large orginaization, launching a new feature requires interaction with lot of other existing teams which slows speed down. Auth, permissions, metrics, etc. The new feature must seamlessly interact and integrate with existing systems.
Yeah but usually these people are top candidates and occupy the other engineering manager positions, and you, managing a super productive team of 5 or 10 instead, don't even get into a single interview there. And that applies to every single company I have applied to.
> how do you end up having more than 500 excess people than what you need
The Law of Multiplication of Subordinates:
> we must picture a civil servant called A who finds himself overworked. Whether this overwork is real or imaginary is immaterial; but we should observe, in passing, that A’s sensation (or illusion) might easily result from his own decreasing energy—a normal symptom of middle-age. For this real or imagined overwork there are, broadly speaking, three possible remedies
> (1) He may resign.
> (2) He may ask to halve the work with a colleague called B.
> (3) He may demand the assistance of two subordinates, to be called C and D.
> There is probably no instance in civil service history of A choosing any but the third alternative. By resignation he would lose his pension rights. By having B appointed, on his own level in the hierarchy, he would merely bring in a rival for promotion to W’s vacancy when W (at long last) retires. So A would rather have C and D, junior men, below him. They will add to his consequence; and, by dividing the work into two categories, as between C and D, he will have the merit of being the only man who comprehends them both.
There is a tendency for managers at big tech companies to want to hire regardless of need and "build an empire", so they can then say on LinkedIn that they managed n number of people. Then they will move to another big tech company, rinse and repeat. At these companies, the more people you manage is translated by higher ups to responsibility and salary. There isn't much reward to keep a team small, focused, and efficient.
Conversely, I also know folks where everyone is redlining in the org because they cut deep and folks who can leave are able to leave for equivalent or better roles. The market isn't great, but it isn't 1999-2000 or 2007-2009 either.
If you want another job, make it a job to find it, and you will eventually find it.
> Actually, I know why. It's because they have too much money and when you have too much cash, you start splurging without thinking and then one day the chickens come home to roost.
But that view might oversimplify things from a business perspective, especially beyond the case of Dropbox.
When a company has ample cash reserves, a common strategy is to leverage the opportunity cost. This can mean growing the team or investing in ventures with both planned and unplanned outcomes. Take Microsoft or Google, for instance: both have a long history of projects and acquisitions that might be considered failures, but these bets were possible because they had the resources to try, even if some failed to pay off. This approach acknowledges that some investments will succeed, while others are simply part of exploring new growth avenues.
As a former engineering manager this is obvious, in my opinion. Companies don't really like laying people off and PIPs are long and require work. If someone is underperforming, hiring a new person is easier. Alternatively, instead of retraining someone, hiring a new person is easier, and you just keep the old guys around doing whatever. Plus, once in a while they might actually offer something (they typically are very knowledgeable about past decisions)
Given how much money there is in these industries this strategy works for a long time.
The alternative is a harsher work environment that is common in other fields. Despite the popular belief on this forum, tech work has some of the most genteel management of all industries.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
Often with this sort of thing, the company is essentially sacrificing future revenue to cut current costs; projects get delayed or cut, but, hey, the balance sheet looks better for a bit!
The other reason it happens (and here the cuts would mostly be operational and sales) is if the company just isn't getting as many customers as it had expected.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
What you need can change over time. As I remember, Dropbox acquired a bunch of companies of the years, so maybe some of them originated from there. They also had many new products and tried to move into new directions, which probably also brought many new people.
Maybe not. But typically natural attrition rates would let a hiring freeze take care of most of this. Layoffs are kind of normal current day, but a 20% layoff is not.
The common argument against relying on natural turnover rate is that the most competent workers are also those who are the most likely to leave because it is easier for them to find a new/better job. So if a company just freezes hiring instead of doing layoffs it will experience a reduction in the competence of their workers.
I don't know if this is empirically true or not, I haven't seen any statistics. But I don't see any obvious logical errors in this reasoning.
I suppose it is the following:
1. Maybe they didn't over-hire but instead the economic conditions changed.
2. Maybe instead of gradually letting go of people it is best to wait and then strike once and hard.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
Because circumstances change and evaluation of projections and optimal employment numbers under them change, and it's never optimal to hire enough people to actually assess that with minute-to-minute updates.
> There's something to be said about spending within your limits and not splurging on the next shiny object.
There is something to be said for hiring and cutting slowly rather than rapidly in response to changing circumstances, and that is that, under the material incentives in a competitive capitalist economy, it is a poor strategy for a corporation.
> Way back when it was called cost control and operating within a budget.
Guess what happens quickly when you are good at operating within a budget and the projections on which the budget is based changed and so the budget changes going forward?
how about you estimate a software project to within 20% accuracy? I've never seen it happen once for anything beyond the most trivial thing. have some humility buddy
As a recent example, when you have "the great resignation" of 2021 turn into (in my view) "the great hiring" of 2021 followed by the Silicon Valley Bank collapse of 2023, it's obvious that hiring managers just follow what is trendy.
Obviously past results do not guarantee future, but what the masses follow is generally a recipe to disaster. I think that's why we're seeing the return/visibility of stacked ranking. Management theorists see one successful company trive or a former successful company fall, and then everyone follows suite because they're "data driven," not driven by first principles
Huh? It's obvious to almost everyone that Dropbox is in a tough position in that it's largely failed to expand its offering beyond the very original product and value prop, which is also being eroded by the other major players.
So they attempted to use DB's position to leap-frog into new product categories, which require big spend on R&D and related teams, as well as new heads for supportive teams (sales, marketing, support, etc).
It's not working, so they are pulling back and re-trenching.
That all seems pretty transparently NOT a "having too much money" problem.
> Didn't they at some point see that they have more people than valuable work, and maybe we should deal with that problem instead of hiring another team to place even more bets?
Well, part of the overhire spree was to prevent other companies from hiring the talent.
> What is management exactly doing during the time they went from 1 excess person to 500?
It is usually not the case that these people are standing around and doing nothing. It is more that they are working on initiatives and projects which the company is discontinuing now.
When the company has a lot of money investors expect them to spend some of it in finding new directions and opportunities. It's not all just spent on keeping the lights on, and the servers humming.
If they don't do this people in 3 years will be asking "What has Dropbox been doing all these years?"
If they are doing it right you are just amazed by the steady trickle of new features and services, and improvements which keep the company relevant in the years to come.
Also, factors like quality, maintainability, performance, etc are open ended and hard to measure. So teams tend to just keep improving them. Some amount is critical, some is important, some is nice to have and some is just excess.
Sometimes I think that tech world has been after "growth" for too long. Instead accepting that at some point companies are reasonably mature. After which they can do more incremental development with lot less head count growth.
That’s such a naive take. For the past 5 years at least these layoffs are not about particular projects being discontinued or even improving the bottom line. This is about how people are expendable and their priority is investors.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
Twitter fired 80% of their staff; and they've been releasing features faster than when they had 4x more people. I suppose work can expand to occupy whatever available headcount - nobody cares whether it's useful work or not.
> Actually, I know why. It's because they have too much money
Money was almost literally free for like a decade. I'm so glad that era is over, and I hope it never returns, but the period of adjustment as businesses discover that they have to actually have a business model again does suck a bit.
Forgive my ignorance, but why would very low interest rates ("almost free" money) be a bad thing we want to avoid?
Isn't it for best if society keeps interest gathering, rent seeking, behavior to a minimum and instead encourages that more of the available capital is put to good use?
Because having a functional business model is what defines whether the use of capital is good or not. Bad outcomes from low interest rates are all these layoffs from overstaffing, all the wasted human-years on blockchain & NFT garbage during 2021, VCs blowing money on obvious failures like Juicero, etc. These are not good uses of capital, and if they had to have a real business plan to get capital in the first place, it would not have been wasted.
I suppose it depends on what the alternative was for that capital. Sitting in an index fund wasn't really doing anything useful for society, but providing high paying tech jobs to dropbox employees was probably very useful to society. Especially when you consider all of the downstream impacts of those employees spending.
Similarly, I would ask if society gets more good out of transferring the wealth to crypto-bro's or from it sitting in relatively low yield investment vehicles? I would wager that the crypto bro's buying lambo's acted as a better economic stimulus than non-productive interest gathering.
Now if the choice had been between investing in "good" businesses vs "bad" businesses I would agree, but I don't think it was.
> I would ask if society gets more good out of transferring the wealth to crypto-bro's or from it sitting in relatively low yield investment vehicles?
I think rewarding people for dumping useful labor into a black hole is bad, yeah. If we're just handing it out, we could've split all that money to everyone equally and reaped much better rewards as a society (useful social services; more family stability; less poverty) than giving a few gambling addicts overpriced cars in return for nothing.
It feels like you're only thinking about it at a personal level.
From a higher level perspective, we didn't give them those cars, they bought them. And buying them provided tangible benefits to the people who made them and the companies that serviced them, etc. The money was freed from the dragon hoards of the unproductive and actually SPENT on something. Spending is useful. Hoarding isn't.
Could it have been better spent? Sure, but spending it at all is better than leaving it to rot collecting a few points interest without actually producing anything of value.
Unpopular opinion, but I don't understand this type of comment. It sounds like people want executives to get some kind of punishment or pain as a consequence of laying people off.
But what would that even look like? A fine? That would probably make no practical difference, and would discourage them from making changes that need to be made. Fire them? Then you would probably get a worse decision maker in the driver seat going forward, who also didn't learn from experience of going through layoffs.
Layoffs are awful. They affect lives and families deeply. But all businesses don't go up and to the right forever. Reductions are a necessary part of running competitive companies.
> Iwata ran the Kyoto, Japan-based video game company [Nintendo] from 2002 until his death in 2015. To avoid layoffs, Iwata took a 50% pay cut to help pay for employee salaries, saying a fully-staffed Nintendo would have a better chance of rebounding. [0]
By taking that pay cut, how many employees could Nintendo keep that would otherwise have been fired? 5? 20? Certainly not in the hundreds or thousands. This just seems like virtue signalling.
Edit: to expand on my point re virtue signalling: the article states the CEO took a salary cut, not total compensation (and it doesn’t elaborate on the value of the cut). Salary is a small fraction of CEO total compensation - the bulk of which is stock based, and even in the event that stock grants were also cut, the CEO surely already had significant stock. Cutting a relatively small component of compensation in order to boost the stock price which disproportionately adds to the CEO’s personal wealth seems like virtue signalling to me. If the CEO said “shareholders be damned, morale and culture are all that matters in the long run, no layoffs etc etc” that would seem more meaningful.
Optics matter. When a CEO approves mass layoffs, and ALSO approves a 60% salary increase, I can only conclude that the CEO is nothing but self-interested. Rewarding yourself for firing a statistically significant percentage of your company SHOULD indicate failure, not success.
I feel like this would be the few times where virtue signaling is probably a benefit. It can make all the people in the company feel like the leader is on their side, and maybe make the employees less resentful and be more productive.
In 2021, the average S&P 500 CEO made 324 times what their company's average worker made [0]. The widest gap was at Amazon, with Bezos making over six thousand times as much as the average worker at his company. The report is from a few years ago, since then the gap has increased further. So yes, many companies could trivially retain hundreds if not thousands of workers simply by cutting the CEO's pay.
Taking a massive pay cut isn't "virtue", it's a direct and measurable sacrifice. Just because you don't agree with the position or outcome doesn't make it "virtue", I'd wish people stop using that word for things they disagree with.
5 or 20 workers (and their families) who don't get jerked around for stuff way outside their control is an absolute win.
Right now, there is no actual downside for executives. Just less upside. Did they earn XX Million this year or XXX Million. Some tangible downside would be nice.
I mean, heck, why aren't they fired? And really, it's more then middle management where that'd make a huge difference. If bad performance led to actual shakeups in the entrenched middle management, we might actually see business practices change rather than continue on through the established fiefdoms and petty corporate politics.
If the CEO taking a paycut materially reduces the size of what would otherwise be a large layoff on the basis if reduced cost savings, the CEO was way overpaid to start with. (And it probably doesn't change the number of people the firm can usefully employ under changed conditions, even if it provides cost savings, because the latter is based on whether employing them makes more money than it costs, to which external cost savings are probably mostly irrelevant.)
It should be added that layoffs are not commonplace in Japan. What you'll see instead are bonus cuts and salary reductions (at most 20 percent). To do US style layoffs you would need to show that the affected department was directly involved in a line of business the company has abandoned. If this isn't the case the employees stand a good chance of successfully suing the company in court. And then there's the reputational damage which would be considerable in a country where lifetime employment is valued.
In other words this kind of behavior wouldn't be viewed as all that surprising locally.
Mass layoffs -- unless the company is actually tanking and on its last leg, which isn't the case with any of the tech companies who have been doing this recently -- cause the share price to rise. CEO pay, or at least bonuses, are often tied to the share price.
To put salt in the wound, my understanding is the research on elective layoffs (ones that aren't forced by circumstances) indicates the outcomes are mixed at best, leaning negative.
So all this crap is just cargo-culting our current management paradigm, and/or execs cooperating to suppress wages and weaken labor, which had gotten a bit too uppity after Covid (that's one thing waves of layoffs like this do accomplish).
Probably: just leave out the full-of-shit sentence...
There's an Indonesian joke based on the word "responsibility" which is "tanggung jawab". "Tanggung" in this context means to carry the consequences, and "jawab" is to answer. One can say to a friend "We have to share this responsibility. I'll do the answering, and you'll do the carrying of the consequences."
I think a start would be to stop saying the phrase “I take full responsibility for this decision” if you aren’t also publicly taking a pay cut.
There’s no need for a CEO to bring themselves and their feelings into the conversation. It’s this weird attempt at empathy that fails, because the CEO isn’t making any sacrifices.
Just say that there are layoffs. Most rational people who have been in any business for more than a few years recognize them as an unfortunate part of the business cycle.
Agreed. But just say that. No need to pretend taking responsibility, which is defined as facing consequences when things go bad.
“As CEO, I’m truly sorry to those impacted. But I strongly believe that this change is what is needed now to make sure Dropbox can thrive in the future.”
Simple: they sure love to talk a big game about responsibilities and taking responsibilities. Until it's time to actually do it. For the good of the company of course (if the company is in such dire straits, as the most highly paid employee - and probably not the hardest working one - why don't you take a big pay cut? For the good of the company of course).
> It sounds like people want executives to get some kind of punishment or pain as a consequence of laying people off.
No - as a consequence of poorly planning cost controls. It's not that the people don't need to be laid off for the health of the company, but that the executives who made the bad decisions don't get the boot along with them, in favor of more cautious or frugal leaders.
Yeah I'm not sure people with compensation well into the millions get to go "haha, sorry, still figuring this out!"
Cool, can we pay you intern wages then?
[EDIT] To make this a bit more substantive: I think this is a sign both that we need to stop with this whole professional-managerial-class horse-shit, promote people who know how to do the actual work of the business, and reduce exec wages because the job's simply not all that damn special and the comp shouldn't be so high that only godlike-perfect performance could possibly justify it, because in truth nobody's that good at it.
Step one of this would be reducing M&A activity (hellooooo antitrust enforcement) and reigning in the power of finance, since letting Wall Street suits put their HBS frat brothers in charge of everything is at the heart of why this stuff's how it is.
Preach! The job is straightforward - lot of these decisions they make are very clearly articulated by LLMs. We need more businesses, more competition, not bigger businesses.
I think it's an outlet for general frustration with the justification for high executive compensation (and returns on capital, for that matter) often being "they have much more responsibility and risk" when the actual downside is typically nonexistent, and even if there are consequences, the outcome is something like "LOL still richer than any ten of you combined will ever be", i.e. the "risk" is all fake.
Perhaps you've misinterpreted that statement? It is the board that takes on greater risk with executives as compared to other employees. The executives are given the keys to the kingdom, which means only an exceedingly small group of trusted individuals can be considered for the job. By the transitive properties of supply and demand, when supply is limited, price goes up.
The thing is, high executives have become a self-perpetuating class entrenched in corporate boards, this is the reason CEOs comoensation keeps skyrocketing, not supply and demand. And this entrenchment obviously also stifles accountability.
How does this self-perpetuating entrenchment not become a factor in what establishes the supply and demand, instead managing to exist as something off to the side?
Why do people understand this phrase "taking responsibility" as some kind of admitting of fault? Maybe I'm missing something, but it seems neutral and could even be referring to positive future outcomes for the company.
Because the context is that 20% of their employees are now unemployed. The tone of the letter is also "this is a hard but necessary choice" and not "this is great news for dropbox!"
> As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change.
I think Houston being a cofounder means the financial picture looks different. Last year he made $1.5M in total comp. Which is a lot in absolute terms, but cutting his pay to zero would only allow keeping ~6 of those laid off. OTOH, he owns 25% of a $9B company. His salary is a rounding error compared to the performance of the stock.
Not to be an apologist, but I bet Drew really does feel responsible. He’s not professional management, and he always acted like Dropbox was his kid, at least from what I saw working there. I’m sure this feels shitty to him, though it’s obviously worse for the people laid off.
True - it means he could transfer, say, a billion dollars worth of stock to the affected employees and still be a billionaire. If he actually felt all that bad about it, of course.
Why can't the executive taking responsibility also take a pay cut and tighten their belt the way they expect the company to and the people who they've fired do?
Taking a hit on their giant salary seems completely reasonable to me. Having skin in the game makes people perform better in all sorts of cases, and I don't see why a CEO would be different.
Do you also object to sales reps or athletes making less money after a long period of performing poorly?
It's the grey goo of manager-speak. It rides both sides, but never truly picks one.
The other two options: blame employees(someone not you), or take some form of punishment as an individual.
I too do it sometimes, and I feel bad each time. I at least tell people what it is and that it's just the reality of the situation. I'm not gonna commit career suicide and jeopardize my family's livelihood but I also won't blame them. So I follow the meaningless middle road where the status quo mostly stays and we all at least learn from it.
Ah, you're only going to endanger the livelihood of your employees' families, most of whom have substantially less wealth than you. I bet the rest of your employees don't really care that you "feel bad."
I'm not responding in the context of layoffs nor have I fired people because of my mistakes luckily. That's a different story, and I was trying to explain to OP my take on it.
Yeah that opinion is unpopular because it's deeply stupid.
“you would probably get a worse decision maker in the driver seat going forward, who also didn't learn from experience of going through layoffs” or you would maybe get a better decision maker who didn't have to layoff — or hire unnecessary — workers in the first place? Ridiculous speculation.
Responsibility without consequences just means failing upward. That's why we have a gilded executive class of people who are barely qualified to run a local Taco Bell franchise.
> But what would that even look like? A fine? That would probably make no practical difference, and would discourage them from making changes that need to be made. Fire them? Then you would probably get a worse decision maker in the driver seat going forward, who also didn't learn from experience of going through layoffs.
Well they're the one asking to "take responsibility" here, the fact that they claim responsibility yet nothing happens is exactly why people don't like this phrasing.
Also who the fuck else can be responsible anyways ? The cook ? The guy who mops the fucking floor ?
yeah, taking a personal financial hit on this would go some way to at least pretend to actually have tried preventing it. Not sure about this particular CEO's salary, but I wouldn't be surprised if you couldn't finance a few engineers' salaries by cutting the CEO's, without it even hurting very much.
Not saying it's enough, not saying that's the only way, but I find it peculiar that this seems to be unthinkable.
People come in two flavors: conflict theorists and mistake theorists.
Conflict theorists think that every event is a result of power struggler. So if someone gets hurt, someone must be punished for that.
Mistake theorists think that the world is complex and sometimes bad stuff happens because most people operate with good intentions most of the time. Often, that means no punishment needs to be metted out.
To mistake theorists, conflict theorists look like ideological blood thirsty savages. To conflict theorists, mistake theorists look like enemy troops.
This is a gross oversimplification but it always shocks me to see how much more conflict theorists there are on hn now than before. So many comments here blaming the CEO or capitalism, most of which are going off extremely scant information.
> It sounds like people want executives to get some kind of punishment or pain as a consequence of laying people off
Um... yeah. Yeah, that's pretty much exactly what I want.
I used to work at a Dairy Queen. One dude there had been working there for a couple years. Unfortunately, one shift his drawer came up a dollar short. Our cutoff was 5 cents - a nickel - over or under. He was immediately terminated, of course.
He cost the company one dollar. A Dairy Queen cashier making minimum wage is held to a higher standard of accountability.
The latter. If you can not manage the company correctly and it leads to the job losses of hundreds of people not to mention the millions in salary that was wasted by their poor planning then yes they should be immediately relieved and not allowed to run any other company. They are clearly incompetent.
Considering dropbox is not facing some economic recession outside of its control we can only blame the CEO's incompetence.
I don't really get why layoffs mean that the company was not managed correctly.
Let's say you believe you have an opportunity that will double the value of the company, with a 30% probability, or cost the company 10% of it's value. This means it has an expected value of +21%. This is pretty good, and exactly the sort of thing shareholders want from their management. So you increase headcount and pursue the opportunity.
In the 70% scenario when that doesn't work, you have to downsize. Failure is not just possible, it's probable. That doesn't mean that the CEO mismanaged...they may have, I don't know the Dropbox details. But in the scenario where they haven't mismanaged, what do you want? Do you want companies to never take these risks in the first place?
When they hire as part of the push for that 30% chance, are they telling them that they have a 70% chance of being laid-off if the bet doesn't pay out?
If it's "just a bet" and not mismanagement, then we should tell people that, shouldn't we?
The reality is that these bets are only bets for the people getting hired/laid off, and they don't even know they are betting in the first place. Even worse because we're not talking about simply losing money here. Losing a job is many times a life changing event in real people's lives. It's not like someone betting on a stock.
That's why there should be consequences for the ones making those decisions. They get the most rewards, but none of the punishment. How's that fair in any shape or form?
Most big tech companies did mass layoffs in the past few years. They are now fully recovered and posting record profits this week all with the same leadership. You are saying they are incompetent and someone else could have navigated this better?
It's always amazed me how much leeway and clemency leadership gets. I worked at a company that was always fairly intentional about their performance review process being a meat grinder, and they also did something that didn't look nearly dissimilar enough to good ole microsoft forced curve / stack ranking.
So if you were an IC and were on a project that failed (or even just didn't succeed enough), God help you. Many folks just quit when they saw a project going sideways, or tried to escape/transfer. Alternatively, people would report green statuses and hope someone else fell over first so they wouldn't be the root-cause.
Obviously this caused many problems. It was very hard to execute projects with lots of people or teams, and/or that took a long (>3mo) time. It came to a head when finally a major initiative missed another deadline "just barely" and it finally tripped circuit breakers and someone went in and did a full Inquisition. Yeah no the project was f'd and they basically just gave up ("pivoted") to an adjacent goal. Their official diagnosis/RCA was "people were too scared to report red, so everyone prettied up their status reports a bit, and that was compounded by each roll-up status report also prettying up the status.
Literally no leadership changes happened as a result of this. Then I got laid off. (Unrelated, just the big layoffs of 22. I was not directly involved in this, I was in big data and this was all happening in the main product infra stuff).
So yeah. Your project fails? Bye. But your f'd up performance grinder culture causes literally hundreds of people to behave so out-of-alignment with the actual company goals? Nah man stick around for 2 more years and leave at your leisure over some other petty squabble.
People make mistakes all the time, hopefully it's mistakes they learn from. You can't simply fire someone for being incompetent, unless it's so bad and beyond the pale.
> You can't simply fire someone for being incompetent
Lmao what? Outside of being absolutely skint and unable to make payroll, that's pretty much the only reason to fire someone (I mean other than misconduct, which is also a type of incompetence)
What if managing the company correctly requires hundreds of people losing their jobs?
I understand the anger in this scenario as employees, but I don’t think doing layoffs means leadership is clearly incompetent. Running a company is hard.
Doing layoffs definitely says something about the company’s values and current standing, but I don’t think it necessarily means the CEO is bad.
> What if managing the company correctly requires hundreds of people losing their jobs?
It occurs to me that there is no failure of performance a CEO can produce and be held responsible for. Are these CEOs really so irreplaceable that when they bet incorrectly they can't be replaced?
20% of employees have been fired. The CEO directly cited mismanagement as the cause. And yet, its impossible to fire him because "its a learning experience" or "think of the upside!".
A CEO being fired does not mean the company falls into the abyss. The company still exists and can hire a new CEO. I'm certain there are plenty of fools more than willing to risk the livelihoods of 20% of Dropbox's staff in exchange for a mansion in Miami.
> Are these CEOs really so irreplaceable that when they bet incorrectly they can't be replaced?
That’s the thing though, another comment nailed this perfectly. If they made a +EV decision to hire more people, but the preverbal roulette wheel landed on 00, maybe it’s not a bad bet that they should be fired for.
It needs to be repeated until its acknowledged: "risk management" wasn't the reason given for the layoffs.
The explicit reason given was "economic headwinds" and bad organizational structure. If in your role as CEO you have left the company in a poor position to handle normal, cyclical slowdowns then you are a failure. If in your role as CEO you have produced an org chart which burns money and slows progress then you are a failure. You should be replaced. Period.
The same consequences that a person lower down the ranks would have.
For example, if I lead a team that fails, the team will be disbanded and I will be either fired or demoted. (obviously if there are external factors I/we might be reprieved )
If the CEO leads an aggressive strategy that doesn't playout, they rarely get fired and certainly don't get demoted.
At a minimum, don't say "I'm taking responsibility" when you aren't facing any consequences whatsoever. If an executive wants to talk like that, they best put skin in the game. Otherwise, shut up.
If the company miscalculated, or mismanaged, to the degree that it suddenly has to cut 20% of its workforce in order to survive (or give shareholders what they want), then yeah, that's a pretty big mistake, and your head should be the first one to roll.
I bet you'd have a lot fewer CEOs calling for mass layoffs.
They should face the same consequences as the people they are firing. Lose their health insurance (or pay COBRA), have a few months' worth of expenses in the bank, have to find a new job, that kind of thing.
I suspect you wouldn't see these comments if CEO pay was on the same order of magnitude as the people who actually work at the companies they run. Watching someone treat your livelihood like a toy, while also being rewarded with more money than any person will ever need, is a bit grating.
I ask this myself. What is the point of both doing layoffs, and then also firing the CEO? That next person will probably be worse, won't have the learnings of the layoffs, and would probably increase chances of layoffs happening again.
putting an employee elected representative on the board
negotiating the layoffs and severance with employees (e.g., giving folks the opportunity to voluntarily take layoffs to reduce the number of involuntary layoffs).
Have you ever managed a complex, dynamic, changing system and found that the optimal size based on current conditions was 20% less than it was at some prior time?
Why is it a blunder? Do you think only poor CEOs face downturns or overhire?
And if a company hires too many people for a few years and then right-sizes, isn’t that better for the economy overall than if they simply stayed small the whole time? They still paid salaries for those years and added to the overall level of employment.
Do you want a system where CEOs are hesitant to hire? Or where they’re afraid to right-size the workforce and instead run the whole company out of business?
There’s literally zero logic to your position, just feelings and Monday morning quarterbacking.
Maybe he should, Meta's main product has peaked in their biggest markets, and his last massive bet went nowhere. He may not be the right person to lead the company at this point.
It's more fun now though, because instead of being tied to individual performance, you need to make sure you're on a product team that is going to survive the cuts.
Also prior to 2010 you wouldn’t be a senior engineer after 3 years of experience making $180k/yr. The staff and principal engineering roles paying <$100k are still super safe jobs
Crowded space, macro headwinds and too much middle management. It was difficult to foresee in 2020, but regarding the macro headwinds (elephant in the room) perhaps some billionaires should adjust their donation patterns:
Lifetime licenses for cloud services is the worst deal imaginable. Even if you're not getting billed, you still cost the service money to continue using it. It's basically the same as a freemium model, except when you get rug pulled later, you're also out the money you paid on a "lifetime" license.
Plenty of examples of how long "lifetime" licenses really last in the modern era. See TeamViewer for example.
Software is complicated. If you keep writing new functionality, maintaining it slows down your ability to write more new functionality. Eventually if you want to ship more new features and not wait an extraordinary amount of time to do so you need more people. This doesn't scale super well so your headcount grows non linearly.
Companies develop a lot of bespoke features used by a handful of their customers. It might not be obvious to the average person what all of those features are. Additionally just scaling software to continue running with more customers using the product is not a trivial task as well. Adding more servers or making servers beefier only works until it doesn't.
> I’m 22 and work on a 3-person team so it’s hard for me to imagine why a company would more than 4 or 5 total employees.
You're not wrong.
I've seen companies with less than 10 employees make around $9M ARR within the first 3 years, and some with around 50-100 employees that can't even reach 100K ARR.
The smaller your startup the more faster you can go, Dropbox's main issue is that they haven't implemented Founder Mode yet. I am willing to bet that that there are jobs in Dropbox that doesn't need to exist.
The same forces that enable high tech salaries, also make layoffs more likely.
- The market for talent is competitive. So companies bid up to the absolute max they can - The market for managers is also competitive. Creating dynamics that lead to larger teams and raises for team members - Companies allow things like remote work, which is a perk, but also has a lot of abuse in terms of how much work gets done
The end result is that if companies are spending their max, if there's a shock to the market/system etc they have to cut. You'd see this less if there was more padding/ less competitive pressure/lower salaries.
I think that's fine and the system is working as intended. People should be freed up to move to other roles where they can be productive. Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
The issue is not that you're getting fired. The issue is that healthcare is attached to employment, that makes zero sense. There should also be some reasonable government provided safety net so people can reskill/learn and move to other fields.
A somewhat sensible take, but the issue isn’t just healthcare. A lot of your life is based off of long-term, fixed cost cash flow. E.g. you can’t pay less on your mortgage just because you got fired. Even with savings, getting laid off is highly disruptive, and, if done as part of a broader downturn in the market, you may never recover the required cash flow to enable your lifestyle.
Avoid lifestyle creep! I have to say I'm bad at this myself: somehow it all adds up, while each individual expense doesn't look so bad.
There are also different types of creep, some that you can easily stop, and others that are more difficult. Specifically, everything that involves a medium to long-term obligation (such as a mortgage or vehicle loan) can cause problems if you cannot sustain it through cashflow interruptions or significant declines. Going out to expensive restaurants and Broadway shows definitely costs a lot of money, but you can immediately stop them if you have money trouble.
the problem with restaurants and broadway is that you've already spent the money on those things when the going is good, and can't claw it back retroactively when the going is bad.
That's why a budget is necessary, and you plan for emergency (of which a layoff is one). Saving up for an emergency fund means you don't spend on luxury until it is saved, which means no broadway or restaurants (unless you're super highly paid, in which case it'd be quite fast).
You can still sell your house or car. The first potentially for more money.
The restaurants and broadway shows are gone.
I’m all for spending on experiences btw. But you have it backwards financially.
Transaction costs for selling your house are incredibly high. Also depending on your personal situation, especially if you have kids in school, it can be extremely disruptive.
Car market is crazy these past few years, but the common wisdom is "your car loses worth the moment it leaves the lot". and it is probably still an essential so you can ensure cash flow. It's more expensive making a bad bet with a beater and spending hundreds keeping it running.
And selling your house is a last resort. rent is still more than mortgageso you're losing both asset and liquid wealth with that move just to buy some time. You're better off taking out a second mortgage if needed than selling off entirely.
>And selling your house is a last resort. rent is still more than mortgageso you're losing both asset and liquid wealth with that move just to buy some time. You're better off taking out a second mortgage if needed than selling off entirely.
...not to mention that if you're losing your job and can't find a new one readily, chances are you're in an economic calamity and you'll be selling near the bottom.
Exactly, I feel a lot of my coworkers fell under this trap: if you need cashflow for mortgage on your 4m mansion in (affluent neighborhood), you can't really afford it.
I make a decent salary as a programmer (150k) but my house only cost 250k and my mortgage is about 1400. How I see it, if I have to flip burgers to keep my house, I can pull it off. I can't imagine have a mortgage that's 10gs a month.
>if I have to flip burgers to keep my house
Sadly it seems it's unlikely they'll hire you even though they might need the help that bad because they're afraid of paying to train you and then you leaving once something better, and in your line of work, comes along.
I mean I just meant a low paying job. During COVID which even have more oversupply, I was bored and I was drive around doing doordash and other delivery services even though I had my tech job. There is always a surefire way of making one or two thousand a month here in the states if you're properly motivated.
You underestimate how bad the job market's been the last 2 years.
And no, 1k a month is under minimum wage in my state. It's not even covering my mortgage, which is much cheaper than rent.
Not sure what you mean. Job growth is continually rising, and unemployment continues to remain at historic lows (where it has been since 2021-ish). [0]
The job market is doing just fine, unless you’re in very specific areas such as the automotive industry or certain types of manufacturing.
[0] https://www.npr.org/2024/10/04/nx-s1-5140039/labor-market-jo...
These charts use "employment" in a very pedantic way. They don't look much at underemployment nor the shifts in proportions of salary ranges.
I believe they also count gigs. So I could run Doordash for under minimum and be "employed" technically.
The other dangerous thing is "averages". This is one of the special cases where you need to look at the lower quartiles. The average/median can look great, but if we have an entire quartile unable to pay rent we'd be in trouble as a whole.
To be clear, I was only responding to your first statement about “how bad the job market's been.”
You can click through to the BLS survey to read more about their methodology, but the job growth number of +254k jobs in September only includes payroll employees. And reading the report would tell you that they do, in fact, track underemployment (people who worked part time but would have preferred full time employment). And neither job growth nor the unemployment rate has anything to do with “averages.”
Can you provide any data to refute the numbers I shared? Because again, the job market is looking pretty good to me.
For a lot of people this isn't possible. You won't find a liveable home in my country for under 600k.
Sounds like any major city in Canada.
Maybe Edmonton, and in not great parts. The parts that give it the reputation as "Stabmonton".
Rural is a different story -- seen some damn nice places for $300-400k CAD -- but rural Canada has its own challenges.
For sure but that would mean saving for it is even more impossible.
I'm curious what country that is. Monaco?
How are housing prices in the neighbouring countries?
New Zealand.
And salaries are likely not 150k either
> my house only cost 250k
I find it hard to believe you can flip enough burgers to pay that mortgage and still survive. Not many fast food places will pay over 30 hours a week to burger flippers. Managers yes. You would barely survive.
> find it hard to believe you can flip enough burgers to pay that mortgage
To keep a $1,400 within the 28/36 rule [1] you need to make $60,000 a year. That's around the median wage for a fast-food manager [2].
[1] https://www.investopedia.com/terms/t/twenty-eight-thirty-six...
[2] https://www.glassdoor.com/Salaries/fast-food-manager-salary-...
Can I just walk in with no management experience and ask for a manager job anywhere?
Even fast food managers will want to know you've been slinging burgers for 2-3 years.
like it's not an amazingly complex job, but you can't just hire some rube off the street because he had a CS degree and knows a bunch of node.
> I make a decent salary as a programmer (150k) but my house only cost 250k
I'm guessing remote work, or a high position in the midwest or some other place?
In SF/Seattle/NYC, 250K is not enough for a studio apartment.
There are tons of apartments for less than 250k in nyc right now, just gotta accept the bronx or maybe far out queens. https://www.zillow.com/new-york-ny/?searchQueryState=%7B%22p...
sure, ignore $1k-$2k/month HOA
That is nonsense. That's more than enough to afford a studio in New York City. You can easily afford a luxury studio with a doorman and a pool making half of that!
Is a "luxury studio" a real thing in NYC real estate or was this a joke?
The term itself sounds absurd and oxymoronic to me, but also I know NYC housing is absurd and I can imagine that there are places that do nice interior finishes on studio apartments and call them luxury so maybe it's real?
A door man is considered a luxury here bud and an indoor pool is as luxury as you get.These apartments also include a patio, a washer and drier.
really depends on CoL and remote work and a half dozen other factors. My house is around the same mortgage but also twice as expensive in a suburb that is arguably the boonies. Even with the $20/hr miniumum wage for flipping burgers It'd be a tight fit after utilities and other payments.
Every house requires cash flow, regardless of mortgage amount. There's something to be said for overspending on a house for sure - but let's not forget mortgage(if any), maintenance, property tax, utilities, insurance, etc. Last year I spent more on maintenance than my mortgage cost.
You get a mortgage because most people cannot just outright buy a hosue with cash. We can discuss the balance of how big a mortgae to your salary, but most people through American history could "not really afford it" by that definition.
But most of history relied on a labor market focusing on retention and training. We're far past that. We're a gig econnomy in all but name with these kinds of evonomic swings.
The only mortgages that don't require cashflow are the paid off mortgages. Even if someone has a year of savings, or two years, or three, after that amount is drained, they need cash flow again. So how does one buy a house without being dependent on cash flow?
Well, you need cashflow on a house in general. Even with a paid-off mortgage, I'm easily $10K/year and probably closer to $20K if I'm not pushing various stuff off.
Property tax alone is around $13K/yr for me. Insurance is another couple grand. Only after that comes wear and tear and maintenance items.
If you pay cash for a house and put 60% more in an annuity, you cover the total costs. Not cheap though.
The point is that, however you finance it, owning a paid-for place will often have significant ongoing costs. Some more, some less.
Why would you forgo the mortgage interest tax deduction?
2025 standard deduction is $30k for MFJ. Ain’t many people passing that mark these days in itemized deductions so the mortgage interest deduction is moot.
For modestly-priced houses at least may not hit deductions these days.
Well the most obvious approach would be to pay cash.
The more fiscally conservative option is to only borrow money if you have capital which is earning income at a higher rate than the mortgage. This probably necessitates having more capital than the house costs.
The problem with that is that unless you have an extremely well paying job or rich parents, you have to outsave inflation and rising house prices. You may never own. Getting a loan just locks you into an inflation proof price as a "forced" savings. I don't think it's realistic at all for 85% of Americans to save for a new house.
If you save $2.5k/mo for 15 years, after 14 years (mid-30s), you’d have $800k at 8% interest.
Even in Seattle, $800k would get you a decent starter home.
(I chose $2.5k, bc 15 years ago out of college, that’s how much I saved living in GA on a $70k salary). I saved even more when I move to California in my mid 20s.
That' assuming houses don't go up in price though right?
Also I think it's pretty rare for people to have the mental fortitude to save 2.5k a month for a house on top of living expenses, rent, and trying to build your retirement / savings / emergency fund.
It's definitely possible but I think it's out of reach for the average person.
> That' assuming houses don't go up in price though right?
No, it isn’t. You can invest your savings. If you had put $2,500.00 a month into SPY500 since October 2009 (15 years ago) you’d have $1,388,302.13 today.
https://dqydj.com/sp-500-periodic-reinvestment-calculator-di...
> Also I think it's pretty rare for people to have the mental fortitude to save 2.5k a month for a house on top of living expenses, rent, and trying to build your retirement / savings / emergency fund.
How is saving for a house “on top of” literally “saving”? If you can save for retirement, savings, and emergencies then you have the mental fortitude to save for a house. People are bad with money, we know that. One of the best examples is buying a house they can’t afford.
> It's definitely possible but I think it's out of reach for the average person.
Yes, agree.
Yeah, I just think examples like this need to work for the masses in order to be useful otherwise they're just pie in the sky advice like abstinence to prevent childbirth. It does work and it's 100% effective but humans are horny. Same with saving this amount of money, there's a select few that can pull it off but most are incapable. Those are the people advice is for
I don’t disagree with you. But I was replying to this question:
> So how does one buy a house without being dependent on cash flow?
The answer to which is “you don’t”.
Most people can’t afford to buy a house and never will. Even many homeowners.
I will spell it out if it isn’t already clear.
Live within your means and save as much as you can, investing that savings in a diversified portfolio. Buy a home only when your savings allow for it.
>Live within your means and save as much as you can
It's expensive being poor and the job market isn't getting better to compensate this economy. If you rent forever you spend more than someone paying off a mortgage (only amortized by needing to upkeep the house youself). If you're wokrking your back out everyday you're more likely to pay more insurance and medical bills than the cushy white collar job with proggresion options.
Most people don't even have the $1000 rainy day fund. They are 3 steps removed from the thought of a "diversified portfolio".
They can’t afford a rainy day fund so they should buy a house?
I have a “cushy white collar job” and I can’t afford a house. Prices are absurd. I can make mortgage payments but it would destroy any other savings. Buying a house when poor isn’t a smart financial move.
I wish everyone could afford a house but that’s not the world we live in. Nothing will change until people wake up and stop killing themselves to inflate home prices.
> Most people can’t afford to buy a house and never will
Most homes in America are owned by the person who lives there.
Just because you buy something doesn’t mean you can afford it.
If you can’t retire or pay medical expenses or maintain your physical and emotional wellbeing because you spent money on a house then you couldn’t afford it. Owning a house doesn’t mean you can pay the property taxes or maintenance costs.
My point is that people are making financially unsound home buying purchases.
Another way to say this is that Bugatti doesn’t sell Veyrons to people with $1,000,000.00. Bugatti sells Veyrons to people with an extra $1,000,000.00.
And it’s not particularly close. ~65% of households own their home.
That rate is higher now than in the 50s, 60s, 70s, 80s or 90s. It rofl stomps the pre-war era.
Do you have a full dataset on this? All I could find is https://fred.stlouisfed.org/series/RHORUSQ156N which only goes back to 1965.
The datasets and collection methodologies have changed overtime, the Fred one is the best if you want continuous definitions.
The census also collects data on the subject https://www.census.gov/data/tables/time-series/dec/coh-owner....
Now I’m curious how this happened. This is the portion of homes owned by their residents, not the number of owned homes as a portion of total population. I’m also curious what the income and wealth to home ratios are. Looks like I have a weekend project.
The pre-war/post war duality is easy to understand. The US made it official policy to increase homeownership. The government subsidizes housing for all income levels and there was tons of housing built.
The post-war era has seen only minor changes in homeownership rates. And those tend to be around macro economic events like 2008 and Covid (and the Reagan era mortgage rates woof).
Thanks that’s very interesting. Why was pre-war homeownership low? Did more people rent their homes?
Yes. And there was much more variation in the types of housing. Employer provided forms/bunk houses, flop houses, tenements, boarding houses, etc.
Importantly the quality of the housing was in many cases horrendous.
My bet is simple: Boomers are all at retirement age if we use the cap of 1954, they were basically given land during the post-war boom. Many had a lifetime career so there was no need to constantly hustle and move about to get a comfortable life. Home ownership is likely very top heavy for Boomers and older Gen X as a result.
If that's even in the ballpark we're going to see a lot of assets aquired by insurance and hospitals to pay off the final years and this residential ownershio will torpeo.
The census bureau has looked at this. The Reagan years hit boomers hard causing their percentage of homeownership to drop compared to a similar age cohort historically. Then 2008 wrecked the young boomers and gen x similarly.
In general terms the oldest cohort has steadily advanced in home ownership (I’d guess due to our welfare for the aged that isn’t needs based and better old age health, not land gifts but who knows). So there is definitely a trend of the oldest age cohort increasing its homeownership % while the other cohorts decrease.
But for the under 35 crowd today, they own their own home at a higher percentage than boomers or gen x did when they were in that cohort.
There is also the consideration that the US is just older than it’s ever been. I’m not a demographer do I have no idea how that plays out.
https://www.census.gov/housing/hvs/data/charts/fig07.pdf
Glad you made that work but that's counting steady job, steady health, no kids, cost of living staying the same the entire time.
No, those are considered. That $2,500/mo is at the bottom of your career. You will be saving more as you age, even accounting for employment gaps.
If we are considering kids, presumably there is another partner (and income) to be added to the equation. While you may have half the amount saved due to the cost of raising children, your partner would have the other half.
8% was chosen to discount 3% inflation (cost of living) from SnP 500’s average 11% growth.
Plus the cost of houses which will definitely go up
2008 would like a word. House prices absolutely do go down. They rose for a long time but recently they are again beginning to fall.
Median home price in the US peaked at $479,500.00 in 2022. By Q3 2023 it was down to $431,000.00. In Q3 2024 we reached $420,000.00.
Case-Shiller seems to disagree that home prices are still below 2022 levels: https://fred.stlouisfed.org/series/CSUSHPINSA
Ah yeah fair. The numbers I quoted are median and I don’t have the source. They are from a quick search of financial news. Your index numbers are probably a more sound comparison of overall house prices.
But even using the index numbers it isn’t hard to see that housing prices do in fact go both up and down.
They are not going down because of lack of inventory. Look at commercial, some properties had an 80% discount. But that requires that supply overwhelms demand. It’s not happening with regular housing.
Estimation considers that as my career started 13 years ago and we can see how home prices are today
>at 8% interest.
What savings account do you have? Even the best HYSA's I've seen in the '10's is 4%
I suppose if you're really confident in your monopoly money you can do it.
Which real world financial instrument would give you that 8% interest?
Basically any S&P 500 index fund [1] averages over 8% return over the trailing 15 years, even inflation adjusted [2].
Using [3] October 2009 to present gives an annualized return of 13.763% and going back 20 years to include the great recession returns 12.06%.
Post-tax current-day value scenarios:
Starting in 2004 (20Y):
Starting in 2009 (15Y): [1]: https://www.financecharts.com/etfs/SPY/performance/total-ret...[2]: https://dqydj.com/sp-500-return-calculator/
[3]: https://dqydj.com/sp-500-periodic-reinvestment-calculator-di...
That's not guaranteed, and not how you save for a fixed goal.
I don't know of any lower-risk and higher-interest alternative to the 30-years-fixed that is currently offered to US consumers, and based of the above answer, neither do you.
> $800k at 8% interest.
OK, and how does that work when houses appreciate at 9%?
Bonds didn’t pay 8% during the bull run.
Yes, it’s a tragedy of the commons. That doesn’t make taking on a loan you can’t afford less of a bad idea.
House prices are unaffordable because people take on loans they can’t afford. This reinforces the unaffordable prices. If milk was $40.00 a gallon you’d just stop putting it on cereal and eventually farmers get the message. Houses are the same thing.
If you can’t comfortably afford a house then don’t buy it. You’re stuck renting or buying something more modest. This isn’t complicated.
The idea that house prices can only go up is delusional. Nothing about a house is uniquely inflation proof or even inflation resistant. This isn’t the only investment vehicle available to you.
This idea that houses are an important part of financial security is putting the cart in front of the horse. It leads to the NIMBYism that prevents additional supply from being built because prices must always go up.
We all exist in the same economy and no action happens in a vacuum. When you buy something you have reduced supply and applied upward pressure on price. Individually this effect is so small it is immeasurable. In aggregate it isn’t.
This was a failure of regulation, not just in the US but elsewhere too; banks and mortgage brokers weren't doing their due diligence and were giving out loans and mortgages that people couldn't afford based on their income and other outstanding debts, eventually leading to the 2007/8 financial crisis.
Which should have been a lesson, but five years later, housing prices recovered and ballooned. I don't know why besides increased demand and reduced availability, clearly people can still get mortgages despite the lessons learned from the crisis.
In my immediate social circle it’s people paying over half their income toward a mortgage, often also lighting money on fire for PMI.
If the problem is the mortgage then rent /s. If the problem is you need money to pay the bills, well I got news for you…
One thing I've come to realize is that the larger your social circle, the more prone you are to comparisons and hence lifestyle creep. You can see this where the careers that involve a lot of socializing (sales, entertainment, law, finance etc) are known for having flashy people. And the careers that you can do as a loner (programming, quant, researcher etc) are known for having miserly folk
Can I avoid inflationcreep? How?
Index funds?
I can't eat index funds.
> I can't eat index funds
You can't eat cash either. If "can I eat it" is your asset metric, buy long-lasting preserved foods.
> I can't eat index funds
You can't eat cash either. If "can I eat it" is your metric, buy army rations.
I don't know why we treat large stock portfolios as if it's a convinient savings account in these talks.
My financial teachings were always emergency fund -> 3-6 months of savings immediately accessible -> consider stocks (hire a financial planner if you don't know stocks) -> consider asset management. your first foray into saving if you're barely spacing by isn't to rely on the S&P 500.
Army rations are much more expensive than human food though.
you can sell index funds and buy stuff. you will mostly be ahead of inflation.
This is somewhat a crazy advice. Shouldn't you have a spouse or children or a house that could have their live disrupted if you need to move jobs?
and thus why no one is having kids
I bought a house than costs 3.5x my salary. I lose my job I can still pay mortgage from savings.
like kids?
There seems to be an analogy to servers being capable enough for usual demand(income>spending), but fails due to some downtime for some servers(out of a job) or peak loads(medical emergency). This can be amortized by having data centers serving multiple apps(social security, insurance - but they dont always exist).
One main fault in the analogy is that in an economic crisis, there is a vicious cycle of income loss which leads to lower demand leading to more lost jobs. This coordination failure can be handled by fiscal/monetary policy. Whereas server failure, even when widespread due to a virus doesn't happen recursively like that.
This why we need the tiny home movement combined with progressive property taxes - 0 prop tax bracket for lowest 20% property values If you have mortgage then you don’t really own your house.
Tiny homes like the coffin homes of overpopulated cities, you mean?
Or tiny homes like the luxury single occupant container buildings on a bit of land?
Tiny homes are not the solution, they are hipster semi-cottage-core fashion homes. You're probably thinking of regular apartments, but for some reason they aren't built at the rate needed. Build ten million apartments (for starters) and the cost of living will go down. Satisfy / saturate the market first, then think of gentrifying with fashion homes.
>but for some reason they aren't built at the rate needed.
crabs in a bucket. Those who got in and got theirs don't want their property value falling. Americans treating housing as a stock instead of a necessary resource for living really ruined a lot of the dynamic of city planning.
Seems like this would hurt those laid off here. They are probably in the top 20% of property values.
That said, I think it is a pretty bad idea. Use of public funds dont increase with property value, it just means you have deeper pockets. I would be more in favor of flat taxes on homes independent of value, so people pay their fair share for community resources consumed.
Tiny homes are great! Provided you have no family, and no hobbies.
honestly this is one of the reasons I prefer pre-IPO companies, my salary is lower until they do a buyback or an exit, but it ends up basically in the same place over the long term. This is how I was able to put a downpayment on a house without consciously "saving up" for it. Obviously there's some risk but I've had two buybacks, one IPO, and two acquisitions since 2012
Just wait until you have to deal with child support and imputed income.
Getting fired/laid off is about the only thing that can save you.
Can't relate, dating market is somehow worse than the job market.
Oh believe me, after the experience I’m talking about, the last thing you’ll want to do is date. At least, anyone who can find out where you live.
Maybe disappear into the woods, or change countries. Or self delete.
> Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
When you leave, your manager loses 1/N of team productivity. When you get fired, you lose 100% of your income.
I bet the manager would be more upset if the entire team quit. But even then, they'd still have their job—for a while, at least.
Yeah, the stakes for the two sides of that transaction are completely different, so equivocating rational responses on either side makes no sense. OP lost me there.
Eventually we all get fired. It shouldn't come as a shock. This is why people working in volatile industries subject to boom/bust cycles should live below their means and keep at least several months of living expenses (including health insurance premiums) in low-risk, liquid investments.
I do understand that it can be challenging to save for young people with student debt starting out in a HCOL area. But I see older tech workers who ought to know better buying luxury cars and fancy gaming PCs and taking exotic vacations. Good luck to them when the next recession hits.
> Eventually ...
Yes, but the problems start in severe economic crises. Specifically, when those several months turn into years.
Many filters during the hiring process, prior to interview will discard those candidates who have gaps since last employment regardless of circumstance. They may use AI as a third-party company to review and obscure the fact that they aren't hiring anyone over 40, female, or otherwise protected classes but that is what is happening regularly, along with other elements such as degrees being weighted higher than experience algorithmically.
> I do understand ...
I can tell you from personal experience, this opinion of yours isn't reflective of the whole. I've been in Tech for a decade, I was unlucky and was laid off before the major lay offs (2022) as I was involved in workforce reduction for a buyout merger. I've been looking ever since, and I've had to find work elsewhere in the interim once my reserves were expended.
I was extremely frugal, cooking everything myself, nothing luxurious. Inflation destroyed my reserves, the lack of jobs forced me to look wider than my given profession since there are no jobs, and I had more saved than most (>50k in liquid reserves at the start).
This isn't some recession like before. This is a great depression, potentially a big debt crises like Germany pre-WW2.
70% of my professional network in IT/Tech right now, across the board, is out of work. I'll let that sink in. 70%.
We are at peak hiring for seasonal hiring and unemployment is 7.0% in August? Hiring freezes guarantee this will be double digits by the annual count. National unemployment is 1.5%. That's a 4.6x national distortion between the national average unemployment and one sector that impacts everything else as a labor multiplier, and that measurement only counts those currently getting unemployment, any long-term displacement outside 18 weeks isn't counted.
Its looking more like we're in the middle of an economic collapse, which makes sense if you know about ponzi's, economics of boom-bust cycles, and how we are entering a bust cycle related to the petrodollar agreement abandonment (by the Saudi's); all those dollars printed for abroad use are now flowing back to compete with the same goods despite high interest rates.
BRICS largely isn't about attacking the US economically, its about sheltering from the global economic fallout of fiat money printing, for more than half a century. The bankers are and have been doing this to us since before we were born, and this happens every time large fractions of global assets get concentrated into few hands. Its cyclical. Large market-share companies are funded by preferential loans made by those same bankers. This is how you sieve wealth and marketshare, then drive prices up, and eventually end in deflation or hyper-inflationary collapse, because unlike normal systems economics is both sticky psychologically, and mathematically chaotic (3-body-problem).
There is no beautiful deleveraging, the bill always comes due. If this worsens, and I don't see how it cannot, this will be known by the survivors as the folly of one big generation.
US President Harry Truman: "It's a recession when your neighbor loses his job; it's a depression when you lose yours."
> This is a great depression
No, it's not even close. Unemployment in 1933 was 25%.
You are comparing apples to oranges.
Unemployment calculations from data recorded during that time have since changed. The same unemployment numbers are not the same mathematical objects being compared.
At this point, we can never know the true scope of unemployment to make any comparison definitively, because the measurements no longer accurately collect the necessary information for such a comparison.
You don't see engineers turn sampling data into an average rate of change, and then use it for safety-critical applications that require instantaneous rates of change.
In my previous response, I said unemployment today isn't counted after 18 weeks, so you should be aware that these objects are not the same.
Just because you have no visibility on a problem doesn't mean there isn't a problem especially when objective measures indicate there is a problem.
No definitive comparison can be made objectively, claiming its not even close would involve delusion when no external objective comparison can be made, definitionally.
> Unemployment calculations from data recorded during that time have since changed. The same unemployment numbers are not the same mathematical objects being compared
We can look at the number of people on payrolls and the number of people claiming unemployment.
You are in a deep tech bubble if you think we're in a recession let alone depression. (What we are in is a cost of living crisis.)
Recessions typically are pullbacks of the market sector for 1-2 years, but not necessarily slowdowns in growth, though there is no globally accepted definition for a recession.
Depressions typically have stagnant growth, starting in one sector, and expanding; with no prospects and a duration that can last years (plural). You can have a depression where everyone says they are hiring, but no hiring actually occurs.
Cost of living crises naturally occur during the latter crises given the chaotic nature of deflationary and inflationary forces (money-printing). They are not mutually exclusive.
Payroll data collection has problems with accuracy, people claiming unemployment also have data collection problems. Its not uncommon for the government to withhold unemployment benefit approval until some arbitrary bureacratic requirement is met with no means to contact someone to resolve it timely. I know several people who received their 18 month unemployment effectively as a lump sum and they spent days of labor trying to overcome those hurdles.
This causes a delay of action, and bursts in time (temporally) which cannot be compared except as an average. Revisions are subject to problems too.
> Recessions typically are pullbacks of the market sector for 1-2 years, but not necessarily slowdowns in growth, though there is no globally accepted definition for a recession
There absolutely is. A slowdown in growth is not a recession.
I'm not saying there isn't a problem. I am saying that you can't extrapolate from 70% of IT people in your circles being unemployed to the entire economy imploding Great Depression style.
Even in IT circles, it's still better out there than it was during the GFC (2009, 10% US unemployment), and way better than it was after the dot-com bust (2000, <6% overall unemployment, but much, much higher in IT).
I'm sorry for your troubles but that unhinged rant is completely disconnected from objective reality.
BRICs isn't even a real thing, it's a total joke. They've been talking about an alternative reserve currency for years but have made zero real progress.
>Eventually we all get fired.
Something uncommmon for Gen X and unthinkable for Boomers. But think about how modern America structured all these payment plans...
>This is why people working in volatile industries subject to boom/bust cycles
you just said everyone get fired. I think today it's harder to find a job that isn't on bust/boom. Especially a public company that will slash employees simply to make number go up, no even because they are struggling per se.
>several months of living expenses (including health insurance premiums) in low-risk, liquid investments.
Low risk invesements are talking 2% on a great day and 4% on an excellent day. There were people above talking about 8% interest rates from S&P to outrun inflation long term.
>But I see older tech workers who ought to know better buying luxury cars and fancy gaming PCs and taking exotic vacations.
odd we compare a 6 figure luxury car to what's at best some $5k gaming setup that can in fact be used for more work in this tech sector. my 2.5K laptop was probably a better investment pre-bust than my new bed (I guess we'll see in 20 years with my back, but the bed isn't making me money).
You've got to be kidding. Boomers were fired or laid off all the time. Unemployment rates have been much higher during some years when Boomers were a major part of the labor force, hitting over 10% in 1982.
https://fred.stlouisfed.org/series/UNRATE
Current money market rates are above 4%. So I guess today is a really excellent day!
There's a difference between "it happens regularly" and "no one is safe". We're arguably structured like a gig economy so unemployment rates won't represent the differece on a chart
You should bring a chart on the average tenure at a single company.
The idea that someone's response to being fired should be the same as a manager's response to one of their reports quitting is hilariously out of touch.
It kind of ignores the core asymmetry of capitalism, that those with the capital are the ones with the power. Nobody can do a background check on a company to see who they laid off or fired before they work there.
You can do a background check. That’s not where the asymmetry is, though. The pandemic checks have showed that the asymmetry can be flipped but then almost everyone working low-tier (flipping burgers) will quit his work. The Fed has then decided to re-enslave these people. Someone gotta take the garbage.
The pandemic was an exigency though.
And the changes were the part of a system wide (civilization wide ?) response.
Someone has to take the garbage, and be paid for it.
If the job isn’t attracting workers, than by market logic the pay should be increased.
If the pay is being kept artificially low though, then there is inefficiency in the system.
>The Fed has then decided to re-enslave these people. Someone gotta take the garbage.
What are you talking about? real (ie. inflation adjusted) wages have gone up more for the lowest quartile of americans[1]. Is paying people more to get them to work "re-enslavement" now?
[1] https://www.atlantafed.org/chcs/wage-growth-tracker, click the "wage level" button
What do you mean? Information about previous layoffs is all over the news, social media, and dedicated sites like Glassdoor. Only a fool or someone really desperate would take a job without doing a thorough background check on the company first. And while I sympathize with workers who have to take whatever job they can get, that doesn't apply to most HN users.
Glassdoor itself encourages users not to post anything factual, only opinion-based, because of the legal consequences [1]. Glassdoor is more like a Google business review than a background check anyway.
Also your estimation of HN users is probably out of date with the current state of the employment market.
[1] https://help.glassdoor.com/s/article/Tips-on-writing-a-revie...
WARN notices are public.
> your estimation of HN users is probably out of date with the current state of the employment market
You're probably not around start-ups if layoffs are a top concern.
I worked at startups for 7 years. Interestingly, WARN acts are mostly irrelevant for startups because they are only triggered when a certain number of people are about to be laid off (100 or more, I believe). When an employer accesses your employment record, they can see very detailed information. A WARN act filing is neither comprehensive nor detailed.
> WARN acts are mostly irrelevant for startup
Well yes. If you're at a startup you should assume you're always a few months from being laid off. Everyone should assume that. You're fighing to survive; the default is dead.
Dropbox, on the other hand, is not a start-up. It's had to file WARN notices [1]. "Nobody can do a background check on a company to see who they laid off or fired before they work there" is false.
[1] https://www.warntracker.com/company/dropbox
Once again, an employment check is not like a WARN act filing. I want to know for a given startup exactly who was fired and why, when, etc.
It’s one thing to be laid off from a startup in general. Another entirely to be laid off right now.
The number of recent layoffs is everyone’s concern right now because of how hard it will be for you to find a job afterward. Layoffs always were going on, and always will for startups, but the days of turning down job offers due to small uncertainties are mostly paused or gone at this point. The demand crunch is very real.
> I want to know for a given startup exactly who was fired and why, when, etc.
What? I don't want you to know when I was fired and why. Employment reports typically don't contain the why either because that's litigation bait.
They at least contain exactly who you worked for and the time period as well as possibly your title. None of that is provided in the WARN act.
> at least contain exactly who you worked for and the time period as well as possibly your title. None of that is provided in the WARN act
We're talking about the information asymmetry in hiring and firing. Why does knowing the titles and time periods of those laid off in the past help you estimate your lay-off odds in the future?
I thought the one and only thing HR would confirm when background check is employment dates. it's shakey on if they will delineate between termination, layoffs/RiF, or simply leaving, though.
>Why does knowing the titles and time periods of those laid off in the past help you estimate your lay-off odds in the future?
I don't know. Why does knowing my titles and time period help businesses judge how useful I'll be for this new position? It's the same issue but that's where the asymmetry is. People seem fine with big business being able to do that but not prospective employees who may care about retention rates.
But to answer your question: retentions rates let me know how hard the company will try to keep me during bad/down times. Someone who can't even retain for 2 years probably has smoke.
> “The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread.” - Anatole France
Too many focus on equal outcome instead of equal opportuniy.
> bit weird how people feel so differently when they get fired
That doesn't seem the least bit weird to me. If I choose to leave a job (or relationship), I could quite sensibly feel differently if that same job (or relationship) chooses to leave me.
Just the other day I clicked on the website of some random law firm's career page. I wasn't happy with what I saw (in the context of my own career). Some researchers with 1 year of experience with starting salary of 450k+... tech salaries look high as long as you don't check other professions.
This doesn't really make sense. What is a "researcher" at a law firm? Lawyers at top firms are on fixed pay schedules, starting at 180k as a 1st year going up to something like 450k after 8yrs (?).
Tech is high earning. It gets beat out by high finance and partner-level roles in e.g. law though. If someone is earning 450k in their first year it's probably similar to a quant finance role.
I don't work at a law firm, have no idea what they really do. Based on the description, I decyphered some advanced googling, mostly background checks and precendence finding. It was like 2 or 3 weeks ago, I didn't know that it should have saved it for reference lol. But pick your favorite firm, and check the salaries. Junior roles are starting at $200k+, frequently at $300k+. And senior roles get senior salaries.
This is just one random firm that I picked from google: [0] - $235k - $365 - with 1 full year of experience, lol [1] - $310k - $390 - real estate contracts [2] - $260k - $390 - real estate contracts, with 2 years of experience
Can you get $350k+ in tech? Well, yes, but with including a lot of luck and ifs. Can you get $350k+ in tech with 1 year of experience? Realistically, only if your dad is called Nadella or Musk.
There are definitely jobs that pay much worse than tech, no question about it. And if you are happy with your salary, than good for you. But nowadays people are mostly made to believe that tech salaries are still extraordinary.
Looking at the best paying professions[3], tech makes only the very end of the list (and only manager level, not code-droid level).
[0]: https://jobs.phextranet.com/PH-Attorney/viRecruitSelfApply/R... [1]: https://jobs.phextranet.com/PH-Attorney/viRecruitSelfApply/R... [2]: https://jobs.phextranet.com/PH-Attorney/viRecruitSelfApply/R... [3]: https://www.investopedia.com/personal-finance/top-highest-pa...
You do not understand what you're reading. I told you, lawyers are on fixed pay schedules. The numbers are different from what I thought, but that doesn't really affect anything I said.
The first role is a 2nd-5th year associate. $235k is for a 2nd year associate, $365k is for a 5th year associate. Each year they get a predefined pay bump. Third role is the same kind of thing (3rd-6th year associate), second role it says mid-level so not 1 YOE.
This firm is also a Big Law firm, the equivalent of FAANG, if not harder to get into. Notice how law is not on your list of top paying professions. Most lawyers are not super well paid.
Also, being an associate is not like being fresh into tech. I don't think it's like a tech new grad role. Average TC for an entry level SWE at Google is ~$200k, and you can be making that as a new grad. Average senior comp is ~$400k, and it's possible to reach that level in 5-7yrs.
Entry level: https://www.levels.fyi/companies/google/salaries/software-en...
Senior: https://www.levels.fyi/companies/google/salaries/software-en...
Another thing to consider is hours. You will work so many more hours as a lawyer in Big Law than a SWE at FAANG.
Tech workers have it very good. Relatively high pay with relatively low hours. Higher comp professions have much higher barriers to entry and work much longer hours.
They are not high. But most companies have business leadership who sees software developers as annoying and weird nerds. Explains why they are spending all their money on compute so that they can replace them with machines once and for all.
They were high in 2013.
Revisited this, and while it was tongue-in-cheek, it feels a bit ungrateful.
A lot of tech roles are intellectually stimulating and have a wage in the upper distribution of salaries. I think we have a very nice situation going for us.
Make sure you don't see the paycheck of your boss, who never wrote a single line of code, but has some bullshit MBA.
If you're always looking up but never looking down it becomes hard to appreciate things.
FYI, Dropbox does not merely allow remote work, it's a fully remote-first company. There's a couple of offices for get-togethers and a few people physically staffing data centers, but everybody else works wherever they want to.
> Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
That's because people have a single employer, while companies have several employees.
That's also why employees are protected, while companies are mostly not. And yeah, the US doubles down on the problem by linking health insurance with the job.
> weird how people feel so differently when they get fired
It's weird that the average person working these jobs has bills to pay, and perhaps additional family members to care for?
It comes down to the concentration of wealth. Companies wouldn't have the capital to bid up salaries if they faced stiffer competition or couldn't access investment from a limited pool of investors (who all think the same), as is the case now. I know that "diversity" is a dirty word these days, but it's key. A large middle class, where each family has a small amount of money to put towards their diverse desires, is going to lead to a more stable economy than all of the money pooled in the hands of a small group with a much smaller set of needs. Dropbox should never have been able to hire so many people; that capital should have been in the hands of the larger public, who could have spent it supporting a more diverse set of hundreds or thousands of jobs (who wouldn't all be competing with each other for a limited number of seats in the "not laid off" lifeboat).
Put simply, these kinds of things are going to keep happening until our wealthiest (individuals/families/companies) are a lot less rich.
Being able to stay in the country is also tied to employment for plenty of people
> Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
Really? You think its weird that someone leaving impacts that person more than their manager, team, or company?
A manager doesn't care that you leave because he still gets to bring home a salary, all they have to do is hire another person and maybe cut back on scope for a little while. When someone is layed off or fired they have to go find a new job, their income streams dry up, and are forced to rely on savings. People often have long term financial commitments they cannot back out of, and not knowing how you'll make rent, if you can afford your child's school fees, or even maybe having to cut back on how much you eat, _is stressful_ and emotionally taxing.
Are you fucking kidding me? "Which is a bit weird" I'll tell you what's weird: management who doesn't understand that their employees rely on them more than they rely on the employee.
Of course its fine when someone chooses to leave their job, they've made contingencies and planned around it. Whether it's through savings, another job, or the lottery, people have at least some idea of their plan when they leave a job.
> People often have long term financial commitments they cannot back out of, and not knowing how you'll make rent, if you can afford your child's school fees, or even maybe having to cut back on how much you eat, _is stressful_ and emotionally taxing.
I'm sure people making >200k/year and getting a 4 month severance package will be cutting back on how much they eat.
What you say is true about low or even medium income jobs. But most of the cuts are to tech workers and their managers, ie. people best equipped to manage in this kind of event.
You'd be surprised what lifestyle creep does to people. Often people don't pay off their debts and instead scale their debts to their new income - it's stupid I know.
I agree they should be in a better position because of their income, and I'd say more than an average amount are. But there are still a lot of people in that bracket who absolutely would have the floor pulled out from under them.
People are often caught with their pants down assuming the good times will keep rolling. And even when they see the market downturn or have a generous severance, it still can be very difficult to scrape together the 6+ months emergency fund required on short notice.
Depending on the resale value of what the debt is for (homes mainly) maintaining your leverage ratio can work out great for you. Mortgages are the only way most people are able to invest with leverage and the source of a lot of generational wealth.
That's true, but if you over-leverage yourself and the market goes through a downturn it can spell financial ruin. It's not something to lightly do without the cashflow/assets to back up your financial knowledge - which most people don't have.
You should only leverage what you are OK with losing entirely. Most people should not be leveraging their only home as investments. We are heading into some rough times and people will find out about that.
You would think so but it's often the opposite. The poorer you are the more conscious you have to be about money management so getting laid off may just be yet another obstacle life has thrown at you, business as usual.
Meanwhile if you've lived an easy life you may not have learned how to cope when the hard times come.
A manager doesn't care that you leave because he still gets to bring home a salary, all they have to do is hire another person and maybe cut back on scope for a little while.
Yeah, I'm curious how someone can have an opinions on workplaces and workers and not seem to have personal experience with the subject, especially in a community like this.
Do they just come from a wealthy family so the stance is "Getting fired isn't a big deal, just ask your dad to cover expenses until your next job."?
It seems the original commenter has never really been a "line-worker". But I could be very wrong too, but then I'd be curious how those opinions were formed.
Nope, you're correct: he runs a startup and apparently has been running startups since his early 20s.
> Please tell us briefly about your background.
> I grew up in the Netherlands, and I was interested in technology from a young age. I started a gaming website when I was 13. Later, I attended Erasmus University Rotterdam before founding Fashiolista, my first startup and an early social network similar to Pinterest. It grew to millions of users...
Don't people have savings? Don't people see what's happening in the industry and make sure to have 6+ months of savings? Don't people think that putting away a small portion of their immense tech salary would be a healthy thing to do?
If you grew up with even the slightest feeling of financial insecurity, dipping in to savings can already feel like the end of the world.
I can't imagine living with only 6 months of savings. There's no guarantee that I could find another job in 6 months, and unexpected expenses (medical, car trouble, housing repairs) can easily wipe out a month of savings anyway. In fact, given that a layoff means likely also an economic downturn, finding a job at the same salary within 6 months seems highly unlikely.
I have probably 3 years of no-risk savings at this point, have managed to reduce my living expenses to the point where I could work a 40-hour minimum wage job and still pay for my expenses, and have multiple back-up careers, and I'm only now starting to feel that taking money out of savings is an acceptable risk. That took years of frugal living on a high tech salary. People in their first few years at a tech job or with families will probably never achieve that.
It's so frustrating reading the comments around here. It's like the conversation is driven by people whose circumstances fall on the upper tail end. No concept of financial insecurity. No long-term financial commitments to worry about. Infinite flexibility. Like jeez, congrats. Now try imagining somebody else that's not you.
No. Most Americans live paycheck to paycheck.
> Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
How is this weird? Your take is like the famous saying about the chicken and the pig both contributing equally to the egg and ham sandwich.
>The issue is not that you're getting fired. The issue is that healthcare is attached to employment, that makes zero sense.
No the issue is that I get fired after the prior townhall saying "we are not doing layoffs". Companies will outright lie to get little ounces of productivity and treat you like a criminal the moment they break the news, as if we're all school shooters waiting to happen in anger and rage over betrayal.
The circus of the 2023/2024 job market doesn't help either. Even pre-pandemic the process was padded, but now I'm not even convinced 80% of companies have a human reading my resume.
>There should also be some reasonable government provided safety net so people can reskill/learn and move to other fields.
I'd rather not "hit hard times" while shareholders are making a killing and make a conclustion that my entire career needs to shuffle so they can save pennies.
> Companies allow things like remote work, which is a perk, but also has a lot of abuse in terms of how much work gets done
Do you have any evidence of this? There are unfounded claims of “productivity metrics” but I have never actually seen one.
E: I realize this is a poor choice of words after saying productivity metrics don’t exist. What I mean is my tasks are easier to complete in a WFH environment than they are in an office.
I have been far more productive from home. The constraints around communication necessitate effective documentation which enables asynchronous communication which alleviates scheduling challenges which improves delivery.
Maybe managers need to go in to the office to rub elbows but ICs definitely don’t.
>I have been far more productive from home.
Same. It's been a boon for me, and I genuinely enjoy my work, so it's win win. But anecdotally, I know people who abuse it.
On net, remote work is a plus: less commute, less pollution etc etc. And even the abusers, it's not like those people were highly productive in the office, I'm sure.
Ok but how do you know they are abusers? And what is the net effect?
>Do you have any evidence of this? There are unfounded claims of “productivity metrics” but I have never actually seen one.
see: https://archive.is/CKGbV
> remote work, which is a perk, but also has a lot of abuse in terms of how much work gets done
If you can't tell remote employees are slacking then you also can't tell if they are slacking in the office, you are just getting fooled by thinking presence implies work.
So tired of hearing this "argument".
Healthcare attached to employment makes no sense ina world where people constantly need to switch jobs
> Companies allow things like remote work, which is a perk, but also has a lot of abuse in terms of how much work gets done
Do you mind expanding on this? How does remote work change the standards of how much work somebody has to get down?
There's also COBRA, and the exchanges in the US. Frankly, even if you're eligible for Medicare it really isn't any cheaper if you're a current or recent high earner. But, in any case, it's about $7K/year for an individual who doesn't otherwise have coverage for a spouse etc.
> The market for talent is competitive.
A couple months ago interviewing.io posted something bragging about how "we do anonymous mock interviews. If people perform well in those interviews, they get introduced directly to a decision-maker at top-tier companies, regardless of how they look on paper." ( https://interviewing.io/blog/i-love-meritocracy-but-all-the-... )
This annoyed me enough that I sent in an email complaining that their introduction process specifically notes that I am not eligible for anything, despite performance measured by the site as "highest ever achieved: 94th percentile" (so, knock that down a bit for being a high water mark), because of an insufficient number of years of experience.
They responded:
> It really sucks, especially in this market, but this policy is a function of us having tried for years to get companies to take junior intros, and it didn't work. We offered to do it completely for free, too, fwiw, and no dice.
How competitive is the market for talent? Let's stipulate that, because of a lack of prior employment, I'm not qualified to have a job. How exactly would that situation change?
Founder of interviewing.io here.
Clarification: Just because companies don't want a 3rd party like us providing them with junior candidates, it doesn't mean they don't want them. Even back in 2017-2019, when the market was booming, we couldn't get employers to take our juniors... because they generally have their own robust pipeline.
So the solution is to go to companies directly, rather than relying on a 3rd party service like ours, which companies tend to use specifically for roles they can't fill on their own.
I'm not really sure what you're saying here. My point was that the market for talent is not particularly competitive, with the opinion of interviewing.io given as an illustration of that.
You seem to be confirming that the market for talent isn't competitive - in your view, companies have more applications than they want.
Or maybe you're going for a different point? For the suggestion, my experience is that companies won't consider direct applications either, and in the general case do not ever even list junior positions. (An observation which is not unique to me; see e.g. https://marginalrevolution.com/marginalrevolution/2022/07/fr... )
If you're worried that I'm implicitly slamming interviewing.io for claiming to do something very different than what they actually do, I don't think you've rebutted that - "if people perform well in our interviews, we will introduce them to top-tier companies as long as we think their resume looks good" isn't particularly similar to "if people perform well in our interviews, we will introduce them to top-tier companies, regardless of how they look on paper".
Yes, companies do indeed have more applications than they want (I'd argue that means the market IS competitive).
The point I was making is that even though companies don't want to hire juniors through us, they still DO WANT to hire juniors in the absolute. So junior hiring isn't dead.
>> The market for talent is competitive. So companies bid up to the absolute max they can - The market for managers is also competitive. Creating dynamics that lead to larger teams and raises for team members - Companies allow things like remote work, which is a perk
Here, saying "the market for talent is competitive" clearly means that hirers are competing with each other over potential employees. Deciding that you already have too many potential employees is the opposite of that. It would mean that the market to sell talent is competitive, which isn't what was claimed.
I disagree with your conclusion, you have several flawed premises.
The market has been slowly shrinking into fewer and fewer hands over time, which is why it has become more competitive over time. This has also led to cooperative behavior among the large marketshare companies in the sectors to disadvantage competitors, and employees.
Companies do not bid up to the max they can, because the executives take their cut first. The companies bids can only ever be the max of what is left after that, and varies by the greed of those people.
Interest rates would be the shock you described, but Tech unemployment as far as I can tell has until now been bulletproof, and uncorrelated with interest rate rises or falls. Its not rational to assume this market shock is a result of interest rates, AI is the only competitive alternative.
The issue is not that you're getting fired. Its that you can no longer get base goods needed for survival arbitrarily and without notice, and without capital reserves which are finite you are living on the street.
When the entire market as an entirety is contracting, there are no new jobs to move to in other fields.
Worse, the concentrated market is naturally incentivized to impose high costs on any job seekers to interfere in labor relations to create barriers to entry for competitors while suppressing wages for prospective workers.
This natural progression occurs when anti-trust fails, and money printing makes it worse potentially leading to either deflation (a collapse to non-market socialism) or hyper-inflation (a collapse to non-market socialism). Debt issued as preferential loans from a money-printer makes a company state-dependent/controlled apparatus even if its claim is that it is held privately.
The economy today is worse than 2008, much worse then the dotcom bust, and if you plot the trend with good data going back and starting around the 1970s, the trend shows progressive ruin as time passes, with seiving and consolidation occurring regularly. That is the force driving this problem, and it doesn't enable tech salaries.
> There should also be some reasonable government provided safety net so people can reskill/learn.
There is a limit to what government can provide, it takes awhile to get to those limits (we're in a super-cycle going back to the 1920s) but we'll be there in the next 5-10 years thanks in large part to deficit spending and the FED picking winners and losers.
The main issues with academia also applies to government. They are structurally the same. Education today is not about learning skills, that is always secondary to instilling the qualities a loyal unthinking worker. That is what the entire prussian-model of schooling is about (which is what we have in this country).
These structures for training follow the same structure as guild socialism, and the same intractable failures (ref Mises for related details).
It inevitably ends up being a cult of qualification, where you are automatically considered unqualified without a piece of paper even if you have the actual skills to do the job. Once a target market size is identified and reached, new candidates are put on an endless escalator of suffering with arbitrary filters/requirements where the claimed outcome is nothing but an unobtainable pipe dream.
> There should also be some reasonable government provided safety net
There is, it's called Medicaid.
That's not really a solution. You have to be broke to use Medicaid. They expect you to fully drain all your assets first.
I shouldn't have to sell my house to get medical care.
Either wrong or a lie. You are not expected to "fully drain all your assets." Your primary residency is completely excluded from means testing unless you don't intend to return to it or it's above an very high threshold - most of the country it's about 2.5-3x the median home price and it is higher in HCOL states.
I'd give you that, but in exchange, you'll have to agree that, if I'm renting, I shouldn't have to sell any financial assets less than, say, the median value of a house where I am.
They said reasonable, not "endlessly-patched-up nonsense that conservatives want to gut at every turn"
I feel like "Medicaid could be better" is a statement everyone can agree on, but my point stands that the meme that US healthcare is some Mad Max apocalyptic wasteland where you're completely on your own and left to die in the street is categorically false.
Not a single person in the US is denied healthcare based on inability to pay.
> Not a single person in the US is denied healthcare based on inability to pay.
This is not true. Emergency rooms are required to take you in and stabilize your situation even if you can't pay. Everything else is not available if you can't pay.
Think of something like cancer, which an emergency room can't treat since it develops over time. You will indeed be left to die on the streets if you don't have the money or coverage from somewhere.
> Not a single person in the US is denied healthcare based on inability to pay.
Yes, because that's the law. Then they hand you an exorbitant bill on the way out, which you can't pay. Then you get hounded by collections. Then your credit score tanks. etc. etc. etc.
Not everything is a direct line, the end result is the same.
Very generous severance packages and companies/laders should be commended for this. If it's a one-and-done big cut with generous packages to save the company, then good on them.
Somehow overhiring and maintaining said headcount long enough to need to do a 20% cut is probably less commendable, but not exactly an outlier there in the current climate.
I've always wondered about all these standalone "point solution" companies and how durable the model is. In the current climate of reduce M&A, and cost consciousness there is no one to sell to. And as the big platforms - AWS, Azure, GCP continue to grow.. it strikes me that more big companies would rather have a one-stop shop full of 80% solutions than pay for 100 different SaaS.
Not one-and-done, at least step 3 in a potential routine:
16% in 2023: https://blog.dropbox.com/topics/company/a-message-from-drew
Or, before that, another 11%: https://dropbox.gcs-web.com/node/8916/html
I wish them well, things look rough.
> it strikes me that more big companies would rather have a one-stop shop full of 80% solutions than pay for 100 different SaaS.
Strongly agree (unfortunately I might add, because I'm not a fan of "the big just keep getting bigger). When it comes to data management, tons of companies are really concerned about access controls, policies and DLP (data loss prevention). In my experience setting up these policies and rules correctly, and appropriately monitoring them, is very difficult and easy to get wrong (many data breaches are a consequence of this). This is especially common when you need to bidirectionally share content with third parties, you may want to give some of those parties access control rights on some data buckets, etc.
I was at a previous company where we were essentially all on Google Workspace. Google Drive's access controls for sharing with third parties used to really suck, though they've improved in recent years. We had teams that wanted to use Dropbox enterprise because their third party sharing features were much, much better. The problem is that I spent a ton of time learning all of the access control and management policies in Google Drive (which aren't great, mind you), and then I needed to spend another large amount of time learning an entirely different interface and set of rules for Dropbox. I almost had a breach because a checkbox buried down somewhere was checked incorrectly. Also, adding Dropbox meant I had a host of additional SOC 2 compliance checks that I needed to validate.
Meanwhile, sharing features in Google Drive (of Google Workspace) have largely gotten "good enough", as of the past couple years.
Case in point - when it came out almost 20 years ago it was ground breaking.
Meanwhile, every single desktop OS, mobile OS and cloud provider basically has had this functionality in some form for maybe 10 years now.
If you are a home user in Google or Apple ecosystem, its all native and seamless. If you are a corporate setup in Microsoft or Google ecosystem, its all native and seamless there as well.
Not clear what the standout features of Dropbox would be now.
They've been doing 20% layoffs two years in a row now.
Yeah that's "run for the exits" territory to me. Especially considering they are already below pre-COVID staff levels it appears.
Severence is only so they can dodge regulatory scrutiny. They are not doing it out of the goodness of their hearts and was a line-item in the burden category for those employees when they were hired.
There's really no pleasing some people. Companies make cuts and don't give generous packages, they're evil. They give a package and it's just so they can dodge scrutiny.
This kind of no-win complaining is tiresome.
Obviously the win is not laying people off. It's no secret that tech companies have not been hiring for sustainability and that sucks.
> Obviously the win is not laying people off.
All you are arguing for is that Dropbox should never have hired these people in the first place. Why is that better? At least these people got some years of high pay, experience, networking relationships, etc. Obviously it's disruptive, and it could be a big net negative for people who maybe jumped ship from more stable jobs only to be quickly laid off, but that's not the broad experience.
I suppose it's largely a matter of perspective but I would argue that fewer more stable jobs would likely be better for both the companies and employees.
Also, you're missing another obvious argument. Most tech companies that are doing layoffs could afford to keep their employees. Dropbox hasn't done 3 rounds of layoffs because they're on the verge of bankruptcy but rather they're just following the trend and pleasing shareholders or whatever.
So I'm not arguing for less jobs but rather less corporate bullshit.
>I suppose it's largely a matter of perspective but I would argue that fewer more stable jobs would likely be better for both the companies and employees.
How do you expect this to work? Companies hire because they think the extra man-hours is going to give them a competitive advantage. Companies agreeing not to compete each other seems suspiciously like a cartel.
They can still hire people and compete with each other? I'm just saying they shouldn't hire in mass quantities if there's a high chance that all of those people will be let go later on. It seems unethical to me but again it's a matter of perspective.
>They can still hire people and compete with each other?
That's still cartel behavior. If Google and Apple formed a cartel to fix handset prices, they could still theoretically compete with each other on features or whatever, but that'd still be a cartel.
"It's no secret that tech companies have not been hiring for sustainability and that sucks."
Does it suck? It means that someone got a job where they didn't really have to do that much and got paid anyway.
An alternative is where that job was never offered. And then we're complaining that there's no jobs.
Also, no, the solution is not to "just hire the perfect amount". Sure if we could just do anything perfectly everything is great, but how is that a reasonable demand.
> where they didn't really have to do that much
Source?
^
What regulatory scrutiny do you mean? They don't need to provide severance, as far as California law seems concerned. I'm not a Californian, but an Internet search shows they're an at-will state. So it seems like everything is on the (legal) level.
California has the WARN act which I believe requires notice of 50 days, which people usually use to give severance. In the USA when someone is told they will be fired, usually we do not keep them on staff so severance is the usual middle ground.
It's 60 days, not 50. But 60 days of severance would be significantly less than what they are offering. They're definitely not doing it strictly to avoid regulatory scrutiny, more like to avoid bad press and a bad reputation in the tech market. When things eventually swing back up, companies still want to be able to hire the best talent, they don't want to be grouped with companies like Twitter.
What is wrong with Twitter?
They did not pay severance when they laid people off.
Even worse, they said they would then reneged.
Yeah, they used weird conditions upon their termination to claw back severance
https://en.wikipedia.org/wiki/Worker_Adjustment_and_Retraini...
That might be true if they were doing bare minimum severance packages, but they’re not. They’re doing substantial packages.
Claiming that it’s to please regulators when it’s far and away better than the average severance package is an irrational claim.
Remember how there used to be a blog (or maybe it was a Tumblr, I forget) that documented every "Our incredible journey" post that inevitably announced the start-up's closure?
I think we need another one for "An update from <company>", as this has seemingly become the standard subject to use when you're announcing layoffs or data breaches. I saw an identical headline earlier today from Sony announcing a studio closure:
https://sonyinteractive.com/en/news/blog/an-update-from-play...
This guy takes "full responsibility," even.
When a CEO takes full responsibility for these things it doesn't mean that they submit themselves to the punishment that internet users might want. It's the CEO telling their impacted employees that, no matter how well you did as an employee, you would still have been impacted. It's the CEO showing you empathy for the hurt they cause you for having failed to steer the company in a viable direction.
These messages are obviously never going to be well received, but at least people can find comfort in the fact that it's because Dropbox is shifting direction and strategy and not because they were bad employees. Stuff like this happens in business. Maybe you've focused on private sales and want to shift to enterprise sales or fund investments at which point your company no longer needs it's sales and marketing departments because the company mission will be radically different. Changing course is a CEO taking responsibility for the company.
It is what it is.
> It's the CEO showing you empathy for the hurt they cause you for having failed to steer the company in a viable direction.
There is no empathy whatsoever involved when someone says "I take responsibility" and then faces zero consequences. It's just a slap in the face.
I think a lot of people misunderstand the statement 'I take responsibility.' They are not actually taking responsibility for the company's situation. They are owning the decision to make these layoffs.
Yes confusing "taking responsibility" with taking responsibility is a pretty easy mixup.
In what other realm of life does "taking full responsibility" absolve you from any consequences? It "shows empathy," what? Suspect: "I murdered someone and take full responsibility, and I empathize with the victim's next of kin," Judge: "Thank you for your candor all is forgiven, you're off scot free"
If a CEO did not take full responsibility, what would be different?
> In what other realm of life does "taking full responsibility" absolve you from any consequences?
Very early in my career I accidentally deleted every IP phone in the municipality where I was working. It was because they didn't have a test setup and the documentation didn't the SysAdmin gave me weren't updated. It was still my fault though and the first thing I did was to tell the IT manager thinking I'd get in trouble. I didn't. He told me he wasn't happy that I had deleted all the phones, but that it was good that I had come to him directly and taken responsibility.
Because when you take responsibility in the adult world, it means that you can work from there. As such it's both ridiculous and disingenuous when you compare a perfectly normal consequences of doing business with committing a crime. It's also a little weird to do so on HN considering this is a VC site.
>It's the CEO showing you empathy for the hurt they cause you for having failed to steer the company in a viable direction.
Nah, screw that. So may CEOs get told by workers this is a horrible route, drive straight into a wall, then show "empathy" for their bloody nose as they throw the passengers off a cliff?
That's not empathy, that saving face.
>Stuff like this happens in business
Stupid stuff always happens. Doesn't mean we shouldn't call out stupid stuff every-time it comes up. I won't accept "it is what it is" when livliehoods are at stake.
Before firing hundreds of people, did the CEO relinquish their bonus or lower their and other executives’ pay?
Executives from these billion dollar companies would do just fine if they went a year without pay. How many laid off employees can say the same?
That would be “taking responsibility”.
People get mad because these phrases prove how wide the gap between them and executives is. How deep into capitalism we are.
> Changing course is a CEO taking responsibility for the company.
Changing course and immediately resigning would be that.
Nailed it. We got "An update on..." when they cancelled our Christmas parties.
They used this exact phrasing a year ago, lmao. Building rapport, The CEO has a name. Hi Drew.
https://blog.dropbox.com/topics/company/a-message-from-drew
Indeed. "An update.." is a trend in lot of enterprises nowadays, probably taking cue from SV companies.
I always think it's a bit weird how people put so much effort and angst into (over)analyzing the language that execs use in layoff announcements in the first place.
It's a layoff. Yeah, it sucks, and no matter what the CEO says people will be pissed. Better to just take the same good advice as when starting a new relationship: "Just ignore everything they say, and only consider what they do." I.e. is the severance package good? Are folks given some assistance/recommendations finding new jobs? If so, I couldn't care less about what the preamble in the layoff announcement looks like.
>t's a bit weird how people put so much effort and angst into (over)analyzing the language that execs use in layoff announcements in the first place.
It's professional passive-aggression. That's more angering than just saying "we need more money, we are laying off people". That "language" is what you're expected to do in the office half your life and it's a tiring waste of time keeping up false pleasantries.
If you don't know, look up the Umbridge effect. Sometimes the petty evils that pretend to be civil stings harder than the pure evils. Not many of us have a Voldamort in our lives. We all have an Umbridge.
"A difficult decision"
I'm always a bit confused by profitable companies with (presumably) large reserves laying off lots of people. I get that they want to remain profitable. But sure 500ish people could be put to some use? A new product, a new market, a spinoff. Whatever? Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?
It always seemed common sense to me that once a piece of software became stable and profitable you would need a much smaller engineering staff than when it was being built. The opposite seems to happens and orgs 10X their engineer headcount once they start making money.
It makes sense to keep some high performers and a few redundancies to stabilize/modernize it and make small improvements, but it feels like tech got really bloated with these massive corps who were trying to burn as much as they could to keep all the VC money flowing. Take like Uber having a team that built and maintained a chat app just for internal use, and every single big org having a bunch of teams responsible for various "some_dumb_name" that is the "custom X for 'Y'" where smaller teams just use the OS solutions to those problems.
> once a piece of software became stable and profitable you would need a much smaller engineering staff than when it was being built
This is not generally the case, except in monopoly situations.
Your software product generally has a competitor, and they're busy trying to make theirs better than yours -- whether with more features, better integrations, whatever it is.
So your staff size generally stays about the same in order to build more features desired by customers to prevent customers from switching to your competitor and you go out of business. And certain features, by themselves, can be more complex than the entire v1 of a product. And/or involve massive refactoring, etc.
The companies that get to reduce their team size are often because they're in a monopoly position, and then customers suffer because the software gets stagnant and the features they need don't get built. That's capitalism failing.
Also, something like an internal chat app isn't always a bad decision. If your company is above a certain size headcount, it can literally be cheaper to build small tools than to license them. Especially when you can more deeply customize and integrate them, which you often simply can't with off-the-shelf software.
> Your software product generally has a competitor, and they're busy trying to make theirs better than yours
Unless you are selling a commodity. There is a good case to be made that what Dropbox sells is a commodity.
> That's capitalism failing.
That's government failing.
1. You can't dig the moats necessary to establish a monopoly without regulation to support it.
2. If/when the government screws up, the onus is on it to fix the problem before the situation gets out of hand.
>There is a good case to be made that what Dropbox sells is a commodity.
Is there? I argue Drive and OneDrive surpassed Dropbox a while ago. Box is dirt cheap if you came in early as well (I still have some 50 GB forever deal from like, 2012). And there's a dozen others if you look into it. It's not very hard to drop any one cloud storage solution (or all of them if you invest in a NAS setup).
Is there not? This is a pretty good description of a commoditized environment:
> It's not very hard to drop any one cloud storage solution (or all of them if you invest in a NAS setup).
The present value of your org is your old products, all futures gains are from new products. The tech industry is littered with tombstones of companies that sat coasted on the success of an older product. Conversely there's a fascinating habit of really smart people in the right environment (Google, Bell Labs, Xerox PARC etc) to create things of enormous value. Things that were just a side project include AWS, Slack, the transistor and transformer architecture. All these companies are really trying to be incubators for the next 100x thing.
What you are talking of is only possible in companies where the founder didn't take VC investment. Once you take VC money, you get on the treadmill of infinite growth to satisfy investors. That makes companies do strange things in pursuit of this impossible goal. Like hiring for the sake of showing growth in headcount, hiring people to branch into unrelated verticals, hiring people with big resumes just to say you have them on the team etc
For real, at some point running development and product teams cracking on features for no reason is a real negative
software can generally be 'done' in the same way building a skyscraper can be
Interestingly enough, I once worked at a company that saw how huge amounts of money could be made taking the exact opposite approach.
This all came about because this company had built a couple of hugely successful, and profitable, enterprise software products. So this company then decided to plow a ton of money into building out other products. The company was also pretty famous for having a high employee bar, and their college recruiting process was kind of legendary for attracting top CS and other tech grads.
However, this company discovered that building follow on successful products, even with lots of really smart people, is extremely difficult. As a not-perfect analogy, think of all the "one hit wonders" out there in the music industry. Beyond those one hit wonders, the vast majority of the rest are basically two hit wonders. Point being, once you've built a really successful product, even if you have tons of smart people, there is no guarantee that plowing money into another product will give you a positive ROI.
So this company realized this, and then saw there were a lot of other small-to-midsize software companies who were similar: they had one or two really successful products, but then were trying to use money from that to expand and grow into other areas, usually with little or no success. So this original company pivoted their business model: they went out to buy these "one hit wonder" software companies, immediately stopped any investment into other products, laid off as many people as possible and outsourced the operations and maintenance of the few successful products to low-cost locales (at the time, India and China) and then essentially just milked the subscription revenue until the product slowly petered out. That is, they weren't really investing in big new features in the product, but the product had a lot of existing customers who didn't (or couldn't) move off of it right away, so often they had at least a couple years of milking the existing revenue dry. I called it "the world's most successful and depressing business model".
My overall point in telling this story is that when you ask "Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?", that often times the answer is "Correct!" People tend to underestimate how difficult it is to build successful products, even if you've already knocked one out of the park.
"Killed by Google" has a similar problem.
Google has killed products that could be entire companies if they weren't attached to the Search Ads firehose.
A $100 dinner could be an annual splurge if you're making minimum wage, and an arbitrary Tuesday if you have a quarter million dollar salary.
Executives think the same way about revenue streams. When they have one product that makes $$$$$ in revenue, they think "not worth my time" to consider another that makes $$. Really frustrating for the people making and using the lower revenue product, but it's why Google feels like a "billion users or bust" company.
> So this original company pivoted their business model: they went out to buy these "one hit wonder" software companies, immediately stopped any investment into other products, laid off as many people as possible and outsourced the operations and maintenance of the few successful products to low-cost locales (at the time, India and China) and then essentially just milked the subscription revenue until the product slowly petered out.
well that's just a dreadful experience. Couldn't innovate so they instead became a very alluring anglerfish with no intent to help stimulate the American economy at all. Successful and depressing business model indeed.
Such a shame how little respect tech gets unless we're spamming buzzwords to rich people. really ruined the reputation of "tech will make everyone's lives easier!"
It’s better for cash cow companies to acquire startups with PMF and real revenues. Let the market experiment and then pay for the successes. Investors and founders win, the company doesn’t waste it pretending to be a startup. Any other cash should be returned in dividends or buy backs.
Was this Insight Software? I usually wouldn't ask since you didn't volunteer the name, but seeing as throwaway is in your username I'd figured I'd ask.
My guess is Oracle.
Was the company Computer Associates (now part of the Broadcom conglomerate)? Sounds exactly like their playbook.
> I'm always a bit confused by profitable companies with (presumably) large reserves laying off lots of people.
According to their financial statement, Dropbox has more liabilities than assets. So yes, they have a large cash reserve, but with an even larger debt offsetting it its hard to argue they are in a good overall financial position.
I had a product manager at Salesforce tell me he went around trying to build support for a new reporting product. He was eventually taken aside by some coworker and told they don't build new products at Salesforce, and bought companies instead.
And they did indeed later buy multiple companies, including Tableau, in that space.
Which can make business sense if you take into account both the probability of the project failing to deliver a competitive product (always high no matter how slick the pitch deck is) and the probability that it gets no traction in the marketplace even if it is as good as the competition. Buying an existing successful product and its customer base can be much lower risk even if it is the more expensive route.
> But sure 500ish people could be put to some use? A new product, a new market, a spinoff. Whatever? Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?
I think a lot of the low hanging fruit in tech has been eaten up, bought up and consolidated, or actually was recognized as much more difficult and expensive than they actually thought. The leadership talent and vision in a lot of these companies is also painfully lacking. In short, to answer your last question: probably not. And I think they're terrified that Wall Street is going to notice.
I agree with both comments. ~500 can surely build some amazing tech, smaller teams have done more. I personally do think there's still a lot of relatively low-hanging fruit left, especially with the boom of possibilities due to AI, or simply what one can do with modern CPU/GPU performance, new browser APIs, modern tech factors, etc.
I also do agree and think leadership talent and vision in a lot tech companies is painfully lacking. This are the companies that could burn some money and use their wedge in the market to build some really cool things, but they wont. I guess to some degree, ironically, the money they're making might be part of the problem.
Not everyone is the type of person that can build a new product from scratch…, I bet the majority of the 500 aren’t that type
I mean, you don't hire 500 people to build something from scratch. You get at best 10 core leaders/founders for a tech, establish an MVP, then hire the other 490 to expand and scale.
Tho in honesty, 500 if overkill unless you really are tapping into some multi-disciplinary project that needs experts in a dozen backgrounds.
The "exhausted low hanging fruit" model IMO has been wrong since the industrial revolution. The fundamental problem is it's based on the heuristic of fixed demand + technology saturating the demand. It's really the opposite - technology is an ever expanding fractal, and the larger the surface area, the more things are needed. For example compilers are having a huge boom now because hardware is increasingly performance demanding and heterogeneous.
It's easy to find new uses for technology. The hard part is turning the new idea into a commercially viable product. And it's even harder to find a business model that doesn't destroy the product in the long term.
The whole is often more than the sum of its parts. A company is not just a bunch of people, but it's also the company culture and the established ways of doing things. It's common that a company can't make something work, but the same people in another company could, because they can organize their labor in a different way.
Software development is often an investment. Hiring a developer is often an investment. Most companies eventually reach the point, where the rate of investment slows down and the company chooses to return the profits to the shareholders. When the company no longer believes that it can invest the money more profitably than the shareholders could, it's rational to lay off people working in R&D and use the profits for dividends or buybacks.
It is basically showing that company is out of ideas, so only thing which they mange to do now is bean counting.
Remember Better, the mortgage company? They were briefly notable for laying off 900 people on a Zoom call. However, no-one asked why a re-envisioned mortgage application/process was failing in the best possible market. My opinion is Dropbox most valuable commodity is the millions of Windows PCs with a system level scheduled task that is vulnerable to "hijacking"... basically they are a data stream.
It was not failing in the best possible market. Better was a successful lender for mortgage refinancing. Better struggled to establish itself within the purchase market which has far more complex relationships.
And once 30-year mortgage rates got to 5% or higher, the refinancing market basically dried up. Without much of a purchase mortgage business they basically had no business, regardless of how much better their technology was.
What's the alternative? Busy work and shrinking equity value until things turn around or I get a much more abrupt layoff?
I think I prefer the severance, the full disclosure, the opportunity to find another job and the possibility to keep teams together at a new thing.
It may well be that there is no alternative. Maybe Dropbox did try everything, maybe tried to let those 500 people work on producing different products or on finding other sources of income, I don't know. And I get that it's important for a business to keep itself afloat. But it's a recurring phenomenon in larger tech companies that I find puzzling.
Many of the answers in this thread have been perfectly reasonable. And I'm probably kidding myself when I think that "if I were that CEO, I'd do things differently".
> A new product, a new market, a spinoff.
Five or 10 years ago, they were doing a lot of this. Dropbox Paper ("a collaborative online workspace that allows you to create, share, and edit documents and notes with your team") for one. It's still active but it never took off. I was just notified that there is some sort of migration taking place which is probably related to the RIF.
They also bought that indie email app that was a peer of Inbox.
Neither exists anymore.
Dropbox was barely cash-flow positive (basically meaning profitable excluding equity compensation) when it had its IPO. It's been having trouble expanding from the consumer space into the business space, and I wouldn't be surprised if its profits are slim.
Also, they've repeatedly tried to create new products. Carousel, Mailbox, and others. Dropbox has had little to no success outside of its core business. While it does that core business very well, it has stiff competition, and the market seems to be already tapped out.
Why not? Some companies do try this. It rarely succeeds though. The reason is that re-education en-masse, restructuring of the chain of command, re-allocation of resources are hard. Most businesses at some point enter the phase where the inertia is the strongest driving force: they only need to apply a tiny fraction of initial force to keep the lights on. At this point, trying to restructure is bound to be very hard.
Maybe, if the company can foresee and realistically assess the problems it's about to face, it may gradually prepare for the transition. I've seen this happen at my friend's job at Dell storage division: some storage product failed, they tried to reshuffle the teams to start working on something else, with some code reuse from the previous one. It still didn't go well, and a lot of people were still let go (because the initial effort of developing a new product cannot really accommodate an army of various kinds of extra personal that's necessary for mature product). They sort-of survived, but with a huge loss.
I feel like leadership and vision are lacking at DropBox, so they don't have any good ideas of what to do with the staff they've got. They should be exploring new opportunities which leverage the skillset of their existing employees, this would diversify them from the effects of OneDrive and GDrive.
For example with AI alone we've seen an incredible number of new file services dedicated to just serving models, and DropBox has totally ignored that need.
Instead they regularly add bitsy, poorly implemented, "us too" features to DropBox which adds friction to common workflows - then provide no way to customise these features away for people who do not want them.
Perhaps to them they see this as evolving the product and keeping it relevant, but their approach doesn't address why Google and Microsoft are eating their lunch, nor does it take their eggs out of one basket.
Those employees were costing more than the value they were creating.
If the marginal product of labor is lower than the marginal cost of labor, the company should reduce headcount. If higher, the company should increase headcount.
That is the current orthodoxy, yes.
Whether in the long term this is net-beneficial for a given actor in the typical case, is at best unclear. This marginal-labor-cost/benefit-in-a-given-moment accounting misses a large proportion of the harmful effects of a layoff.
When a bunch of companies in one sector do it, it does lower wages and reduce labor power to e.g. demand better working conditions. That part, is a benefit for companies. But it's not the result of one company doing what's best for their particular situation—it's a result of coordination, even if only by the understanding that "this is what you do, when there's an excuse to, and especially when you see others doing it". It's merely best practice then, not... collusion.
Arguably the value they were creating was influenced by the direction and application that labor was directed at. Redirecting that available labor at something more valuable would fix that as well wouldn't it?
> direction and application that labor was directed at
That would require leadership to take a hard look at the value they bring to the table as well.
It's a lot easier to just lay people off than do that though, conveniently.
Yes, if there is something more valuable to redirect the labor to and my intuition is that there is not, I mean not in the Dropbox business.
2640 employees seems like a ridiculous number for a company like Dropbox. I work at a company that's about half of that and you wouldn't believe how many different services this company runs and I still think there's a lot of inefficiency.
If companies wanted efficiency, they coould probably spend $400k to 10 engineers and get the best of all worlds. That's going to be cheaper than hiring a team of 50 @100k of varying quality.
Except when the engineer leaves for a $500k postion. Companies basically moved towards this churn market in a way not as far off from an assembly line as you'd expect. They prefer some inefficiency if the cogs are easier to replace every 1-2 years.
Yes, but not in a way that blames the workers. If a product improves but margins don't (because say, interest rates), you have employees who all perfomed above expectations that can still get taken off because the current environment can't make money on anything through consumers (who are getting less buying power and cutting non-essential services).
I'd hope tech workers on a community like this could empathize with other tech workers in such an environment.
But which people: the sales/marketing, the developers that actually make the product, across the board? At some point, development gets to a stable and solid product, so revenue increases come from staffing up sales/marketing. So does that mean you can reduce the devs to try and increase new users or that you've overstaffed the sales/marketing? Maybe there's just too damn many middle managers? Will the cutting be a surgical blade or a broad axe?
The company could put them to some use, or they could get capital and launch their own ventures. It's equivalent from a market perspective, except the one you suggest requires unnecessary coercion (forcing the employees to work on something they may not have signed up for).
At the end of the day, the american market place is distinguished in that venture capital, especially in tech, is very accessible. Being laid off seems to be a bonus in the hunt for VC money.
It's the same reason companies return dividends. Sure, they could use the money for R&D and launching a new product, or they could send the money to investors so that they can scour the marketplace for a new technology of their own choosing for investment. The first one unnecessarily takes investor money for a project they may not have signed up for, whereas the former maximizes their freedom to invest in what they find interesting
We're in "safe money mode". A.K.A they want as few people working on as sure a bet as possible. Likely overworking those few people in the process.
>Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?
not the shareholders. they never cared about clever engineering. Not unless [buzzword] is involved.
Every new product or market usually also needs additional investments, maybe even new workers with relevant domain knowledge. And Dropbox did try new products and markets, but what if it's not working out? Should they continue until money runs out?
And some interesting part of this announcement is the mentioning of the grown overcomplex management. This kinda smells of some shrinking for health-benefits. For some reason or another, they grew into a wrong direction, and maybe now remove the unhealthy parts to be able to operate better.
Often they target the lowest performers for such layoff. Of course they rarely succeed in doing that, but the idea is that these people should have been let go anyway but weren’t for various reasons.
> Often they target the lowest performers for such layoff.
In my experience, this is often an after-the-fact rationalization by people who "survive" layoffs to explain them, and a convenient justification by leadership for layoffs. If you've ever been in the room when layoffs are planned or discussed, the actual process is way more focused on blunt cost, personality of the people involved or on the chopping block, and is often practically a tossup considering "performance" is not really a clear or meaningful metric (actually, more often it's arbitrary for most companies --- they will find the metric they need to justify laying off someone). This phenomenon is greater the bigger the company and the more abstracted managers and leadership are from their lower level employees.
In many cases it can actually be inversely proportional to performance, since the one factor they can count in black and white is how much the person costs. Laying off someone making a TC of $500K probably feels like you're saving the company a lot of money, but its also possible the reason they were making that much is because they were more than twice as productive/valuable as the person making $250K. But salary and benefits are easy to quantify, and performance is not.
I've heard secondhand that a few layoffs of star players was as messed up as "well Suzy is pregnant, but we need to axe someone else to justifty it as being coincidental". It shouldn't be surprising at this point, but companies can and do go that far sometimes just to cover their tracks. slicing their nose off to spite the pimple.
That hasn't been my experience. I usually see the senior people with higher salaries being laid off.
At one company I worked at, a whole division got laid off because the director didn't like the manager of said division.
For a company of Dropbox stature, "often" they target the people that get paid the most.
There are rationales behind it. The simplest one is that the product is matured enough so you don't need these so-called 10x engineers or seniors.
Then the lowest performers.
Many times the marching orders were to fire the high earners, assuming that the remaining, less well compensated workers, could together do the same work for less.
They could, but they would need to be paid as well; a new market, spinoff, product, etc are all investments, and all investments are gambles.
It might be 500 middle managers which you can't do much with.
It's not. And that's not a very nice take on something that's affecting 500 people (and their families).
What I mean is, I doubt you could roll the exact people they fired into some new product or service and have it correctly staffed.
Companies become myopic past a certain stage.
New products take time to mature into revenue generating things.
Cost savings from layoffs are immediate.
>bunch of talented people
Very bold assumption
Why do people still think like this? Have we not had enough layoffs these years from nearly all companies in tech with so many configurations to realize that this isn't just targeting new or incompetent people?
I'm a libertarian in most things but I still don't like layoffs from profitable companies.
Like it's probably not good for our society that people have to up end their life every few years and probably move to find a new job.
Both my parents stayed in the same job for their careers and it meant they could stay in the same place, have kids, build ties to the community, etc. Seems important if you want to not die out as a society.
> Like it's probably not good for our society that people have to up end their life every few years and probably move to find a new job.
The thing is, Dropbox is done (as in feature complete). Like when the construction of a building completes, many people are "laid off" because they aren’t needed anymore. Yeah, you need to keep some people around for things like maintaining the building, but not to the scale of the original workforce required to build it.
It is "good" that the excess labour is freed up to go work on the next "building". What may not be good is that the workers didn't think to associate with each other like construction workers do. Construction, being a much more mature industry, typically keeps a clear separation between the workers and the building so that then construction is done the entire excess group of people can be lifted on to the next project instead of all going their separate ways.
Software will undoubtedly go that way eventually. But it is, in the grand scheme of things, still early days for it as an industry. We haven't yet learned the lessons that older industries have.
Interesting insight about construction. I think you're right.
We see this ad hoc in software now. When there is a mass layoff, someone will go get a new job, and then try to bring on all of their previous coworkers. Or a group will go off and start a startup which (if they're lucky) will get acquired and they get to keep working together.
Which now makes me think, if you're a big company, maybe it behooves you to offer a highly functioning team a seed round instead of individual severances...
>he thing is, Dropbox is done (as in feature complete)
Dropbox is "done" but Dropbox didn't employe 2700 people just to work on dropbox.
They toyed around with other services, weren't as gamebreaking as dropbox, and in hard times (not necessarily for their business) they deided to just abandon those other experients or products. This isn't some "the job is done" scenario, it's "we're hunkering down for the storm that we pretend isn't happening out loud" scenario and people are still falling for the idea that "the economy is soaring". It's disgusting.
>It is "good" that the excess labour is freed up to go work on the next "building".
sadly there is no "next building" in these times. When everyone is "feature complete", you just have a purge, not a new opportunity.
>Software will undoubtedly go that way eventually.
given the 3rd wave of attempting to outsourcce large software out, and the AI bubble, I don't think companies are ever going to truly appreciate proper mature software. Just the bare minimum to pretend the machine is running until the next CEO deals with the fire.
Software engineering, as profession, offers a very different kind of capacity compared to professions found in the construction industry, though. The physical resources for buildings are expensive and rare (land, material etc), whereas compute and storage are literally getting cheaper by the minute. The Silicon Valley dream of getting from garage to unicorn within months might be far from realistic, but still way more probable that in any other industry. Quick prototypes can be built in days and it isn't uncommon for graduates to finish their research with a viable business idea. I never seen that in my circle of architecture friends.
> Both my parents stayed in the same job for their careers
My father was the same, BUT.. this is an INCREDIBLY risky thing to do career-wise in the modern era. Given how much tech advances and that we actually face international competition that a lot of our boomer parents didn't during their career, I don't see really any going back either.
Some of the worst layoff situations I've seen were guys who worked in the same company for 25 years.. long enough that their knowledge & skills was too company-specific, but not long enough to retire. Just because someone seems indispensable doesn't mean they are safe.
Having to drain savings for 1-2 years jobless after a layoff in the last 10 years of your career and reset at a probably lower salary can set back your retirement 10 years.
As one friend put it, he "works for Silicon Valley Inc, <name of company> division."
Fully agreed - yet, we as a society consistently and systematically trade (or let "others" trade) much more critical aspects of life, such as quality of air, water, food etc. for short-term profits, even though that very often has no clear/direct positive impact on any other comparably valuable aspects of our lives.
So it's no wonder that "some people losing their jobs and needing to move for a new one" is irrelevant, when the only goal is profit maximisation, even though we don't even understand what for.
It absolutely says a company is done innovating, and shouldn't expect any large growth from now on.
And somehow, the P/E of its stock almost always increases... Forcing it to double down on growth, that it can't do anymore.
Corporation governance is broken nowadays.
Dropbox my one critique is can you please make it affordable again. I just can't justify the cost as there are cheaper services out there. I don't care about PDF signing etc. I fear OneDrive/Google Drive are eating you lunch because it's a hard sell to be competitive against them price wise.
I left Dropbox when they added (and preemptively enabled) a checkbox that shared your data with them for AI training. I refuse to do business with a company that will just unilaterally invade my privacy like that. They can make it as cheap as they want, I'll never go back.
Selling data is always the last play for all businesses that have data.
Either you never give it to them in a way that can be sold (e.g. fully encrypted), or you expect them to sell it when the leaders need to increase cash flow.
Citation please, about Dropbox training models with customer data?
The article Lammy linked is indeed the correct one. When that bit of news came out I checked my account, and it turned out that Dropbox had added and enabled the toggle without my consent. I was a paying customer mind you, I paid like $120/yr for my storage. After they pulled that crap I started working on setting up Nextcloud hosted in a VPS. It's more expensive, but Dropbox permanently burned my trust when they did what they did.
did you manage to catch it before they started the policy?
I think this is what people are talking about? RE: https://news.ycombinator.com/item?id=38684252
https://help.dropbox.com/view-edit/privacy-settings-dropbox-...
> “For eligible accounts, […] The Third-party AI toggle is turned on”
I just logged in and checked and don't have the "Third-Party AI features" tab, but I only have an old free account and am probably not at the tier where this appears.
That feature doesn't train the model on customer's data though, unless I'm missing something.
I agree it's annoying it was enabled by default in places, but I'm trying to either correct the incorrect "for AI training" part, or find a citation that shows they are actually doing AI training with it.
Exactly!!! I stopped being a customer when they lost touch with their customer base. They decided to become something else, adjust plans however they thought, introduced useless featured and all these while riding the money train. I feel sorry for those being laid off, it’s not immediately/directly their fault. It’s the management and the product responsible that should take the blame.
Steve Jobs was right - Dropbox is a feature, not a product.
A feature of what? Surely Jobs didn't expect a feature of Windows, OSX, Android, Linux, and ChromeOS to all seamlessly interact with one another.
I don't doubt that Jobs might have seen Dropbox as a feature that Apple could have implemented across the Apple ecosystem, but that's a pretty limited view of where the value of Dropbox lies.
Why is iCloud different? For the Apple ecosystem, interaction with Mac/iPhone/AppleTV is all that matters. Which is why I don't subscribe to the garden. But it's a reasonable perspective of Jobs that doesn't conflict with this statement.
But it's a reasonable perspective of Jobs that doesn't conflict with this statement.
That's what I'm saying. From Jobs' perspective it was a feature for Apple, because Jobs believed only Apple devices matter. For everyone else that's a pretty limited view of the world that doesn't really apply, and measuring Dropbox (as a company) by that standard is nonsensical. It should be obvious that there's value in sharing files more widely than just within one ecosystem.
It's a product that I was willing to pay for (until I required native E2E encryption). _iCloud Drive_ is a feature, mostly — aside from the fact that you still have to pay for it to be useful, so kind of still a product.
Steve Jobs was wrong about many things, and this was one of them.
People bring up the old naysaying comment about DropBox from some HN user years ago like it was a bad comment.
Maybe people like bad products, and make bad products rich all the time?
You can make a good product and go out of business, sometimes through actually no fault of your own too.
I agree, Dropbox is a feature - and it shouldn't be a product.
It's been a product for 17 years.
Not when your competition are consumer companies like Google, Microsoft and Apple.
I'm on Google One at $100 per year, getting more services than Dropbox can offer with their $120 plan.
Maybe they have a future in enterprise sales, but they are outcompeted even by Zoho in consumer space
I'm responding to the person who quoted Steve Jobs by saying Dropbox isn't a product, it's a feature. 17 years is a really long time on the web, and Dropbox has not only been a product, but a successful publicly traded company for most of that time, during which so many other "real" products have risen and fallen. The fact that you subscribe to Google One doesn't tell me anything, except that Google created a product to compete with Dropbox, which is also a product.
A product thats getting its lunch eaten by products that have dropbox as a feature
OneDrive/Google can afford to take a loss on you, they are effectively selling you storage at a loss. Dropbox can not do this.
you're not a target customer anymore.
they need $$$ from enterprise, everything else is a distraction.
I stopped using them when they refused to work with valid windows paths - to wit, files and folders with emoji in their names.
Now I pay for google drive instead.
Funny how Hacker News spent the past 15 years laughing at anyone questioning the viability of Dropbox as a business, but then after two years in a down market half the site is begging them to be cheap again.
What's the matter? You like the sound of that crusty, slow Linux NAS that this site has derided for years?
>You like the sound of that crusty, slow Linux NAS that this site has derided for years?
Honestly, it's a lot more enjoyable than I expected. Internet enabled, easily expandable (my setup is 5TB), can quickly setup a plex server for media, and can easily up/download any files needed from anywhere I have connection. And I feel I only scrathed the surface of potential. One of the more useful investments I made this decade.
> Impacted employees will be eligible to keep company devices (phones, tablets, laptops, and peripherals) for personal use.
It's not often you see this. Netflix used to do this if your equipment wasn't brand new, and with any phone[1]. And the very first startup I worked for let me buy my laptop, desktop, monitor, and cell phone for $50. But you don't see it too often.
[1] There was a "joke" at Netflix that if your manager told you that you should upgrade your phone, it meant you were gonna get let go soon, because sometimes people really did get let go just weeks after getting a new phone, and they got to keep the phone.
At a former employer I (voluntarily) left. I ended up spending a good couple hours driving my 7-year old laptop which I rarely used to a FedEx dropoff and I'm sure it was promptly recycles. But I wanted make sure all the loose ends were tied up.
on the opposite side, I had some nearby management literally come to my house 30 minutes after my layoff to collect my equipement. I didn't even have time to process the layoff; I had to disconnect my entire setup, lug it downstairs, and have it ready to lug into someone's truck faster than I could order a pizza.
That's just petty and one would think nearby management would have better things to do. Whether or not people "should" a lot of folks have their personal and work stuff pretty intermixed and need time to disentangle and may not even have a personal laptop. I guess there could be an element of not wanting to give ex-employees time to copy off work info but still (and, if they're that worried, they should be able to just do a remote wipe)... I've always tried to make a point of keeping an off-work copy of anything I want to keep and isn't confidential.
This is a great severance plan.
1. 4 months pay + 1 week per year of tenure. 2. Receive Q4 vests. 3. Upcoming approved leaves paid in cash. 4. Year-end bonuses paid. 5. Keep company devices.
It is a great deal. The core demographic of HN has been very fortunate and does not understand what the norm across industries is.
The "core" demographic of HN probably sees this as standard, if they were ever laid off to begin with. The commenters at the very least seem to be (or claim to be) on a very high end of tech that doesn't realize that not all US layoffs give you 3 months severace standard.
You know what's better than a great severance plan? Keeping your job.
Not necessarily.
If you're actually good at your job, you typically end up with an even better job: https://hbr.org/2018/10/research-when-getting-fired-is-good-...
The linked article is specific to executives and kind of confirms what most are complaining about here.
> a 10-year study of over 2,600 leaders showed almost half (45%) suffered at least one major career blow-up — like getting fired, messing up a major deal, or blowing an acquisition. Despite that, 78% of these executives eventually made it to the CEO role.
An executive can make a series of awful decisions and still advance in their career.
Most employees can as well - IFF you move to different companies.
I think its tough to argue that getting laid off is a net-benefit for your career most of the time.
Seeing the article dating 2018 told me all I needed to know about how out of touch it is with the current market.
I wouldn't wish for you to get laid off to understand thee current circus, but I'd urge you to at least spend maybe an hour in some of the "Who wants to be hired" threads to understand the scale of the impact, and how even HN workers can be struggling.
If that holds true (and not sure that it does), then it also holds true for when you decide to get another job, on your own terms, rather than being forced into it.
Yeah I end up with like twice the salary, but the job search is always the worst parts of my life.
You can’t be serious. This package sucks specifically because of the healthcare.
Industry standard is to offer 18 months of COBRA, not 6. Job searches frequently take way longer than that.
COBRA is a huge deal for departing employees. My single largest expense is health insurance for my partner and I, more so than even rent.
>Industry standard is to offer 18 months of COBRA, not 6. Job searches frequently take way longer than that.
job searches taking 6+ months is exactly why this whole process is broken. I I could get quick rejections and considerations, being laid off wouldn't even be that bad.
TBH it feels like Dropbox has a pretty fair earnings multiple at the moment (~4X). Have we reached a point where tech companies have been around long enough that they can / should enter a sort of maintenance mode? It feels like there is a company version of the Peter Principle. Why do they (Dropbox specifically) need to continue to "innovate"? Wouldn't it be better for all parties if they just focused on maintaining the best possible version of their core offering at the lowest cost? Maybe Dash (or whatever) will work but most likely it won't, and investing in that initiative puts their whole business at risk.
> enter a sort of maintenance mode
There exists such a mode: it's called dividend distribution. But currently DBX and many other tech companies aren't paying any dividends to stock holders. So if it's not growing and not paying dividends, what is the company doing?
Providing goods/services. Perhaps the qualifier "being publicly traded" will help
I think the question is more for investors. If the company isn't growing and isn't paying a dividend, why would I buy shares?
In that instance you’d be looking for free cash flow, and Dropbox has a lot of it.
https://investors.dropbox.com/static-files/df1fe33d-3995-452...
If its not being returned to shareholders its worthless
I bring attention the qualifier; if it's not performing and likely won't be, why is it traded?
A company that is relatively stable and holds no grand world-domination-to-feed-shareholder plans is still nice
Alternately we have entered a phase where layoffs have metastasized as a thing to do so much that executives are being asked about it. "We've noticed you haven't done any layoffs yet, can you explain that?"
> pretty fair earnings multiple at the moment (~4X).
Dropbox's EBIDTA is 14.67, but most Software Companies tend to have an EBIDTA of 28.
Dropbox is significantly underperforming compared to their peers.
Furthermore, cloud file storage has become commodified and Dropbox missed the DLP, DSPM, and AI Search train.
> Have we reached a point where tech companies have been around long enough that they can / should enter a sort of maintenance mode
Absolutely not.
If you do not innovate as a software company, you risk becoming commodified.
And if BUs within a company fails to execute on their innovation or GTM strategy, they will be let go.
"Wouldn't it be better for all parties if they just focused on maintaining the best possible version of their core offering at the lowest cost?"
Yes, absolutely.
There is value in new features and functionality but there can be so much more value in a predictable, stable tool that can be depended on and returned to.
There are people who cancelled their first account with us before dropbox existed and have returned, post-covid, to find a familiar tool to be picked right back up again.
This has been immensely valuable to a great many people and we wouldn't dream of ever changing it.
Being sorry - check
Takes full responsibility - check
Layoffs are still there
I think we'd all collectively blow our minds if a CEO said "I take full responsibility for the bad decisions and overhiring, so I'm resigning"
Would the CEO resigning or getting laid off, make your situation any better if you were one of those laid off?
Feels like a weird hill to die on, and more like a crabs in the bucket mentality that doesn't change anything in the grand scheme of things. In the end I'm still unemployed and whatever happens to my ex-CEO doesn't change my situation one bit.
As I grew older and experienced my share of layoffs, I stopped caring about what happens to those responsible for me getting laid off, as my energy is better spent on improving my situation and my life instead of ruminating how Krama vengeance would make me feel better.
> Would the CEO resigning or getting laid off, make your situation any better if you were one of those laid off?
No, of course not. But he is the leader, and he guided the company to a point where certain areas became "over-invested or under-performing." In other words, he didn’t do a good job. So, it should be him stepping down. Nobody ever said being a CEO would be easy.
>and he guided the company to a point where certain areas became "over-invested or under-performing."
And now he's fixing it by cutting those under-performing areas.
>So, it should be him stepping down.
Why? How would that help the company get better? Do you think competent CEOs are like cogs that you can pick a new one from the stack of LinkedIn applications whenever the old one makes a mistake, and then slot him in the existing machine and everything will magically work better?
>Nobody ever said being a CEO would be easy.
Exactly. That's why you don't rush to replace the devil you know with the devil you don't.
>That's why you don't rush to replace the devil you know with the devil you don't.
It's the same devil with the same playbook. They all know each other at that level.
And yes, they are doing that in some sectors (and some CEO's want that). Less in tech, but I suspect more shakeups once the AI bubble ends.
>It's the same devil with the same playbook.
Why don't you start your own company so you can be a model angelic CEO then? Why bother working for these "evil" guys? Or work for a local mom and pop shop instead of a publicly traded company?
Working on it. But that's a dismissive answer from someone who's never actually ran a business.
>work for a local mom and pop shop instead of a publicly traded company?
I'm open to it. They literally aren't hiring tho. They get the most impacted in a downturn, so I get it.
I ran a business which is why I know how hard it is and why I prefer working for someone else and accepting the trade-offs. You're the delusional one here wanting to have your cake and eat it too.
It wouldn't, but it'd reassure me I wasn't some expendable pawn and they are preteding to be responsible. A company trying to cut back on the highest paid workers who will still survive shows a captain willing to drown with their boat.
but it doesn't work like that in the western world.
>As I grew older and experienced my share of layoffs, I stopped caring about what happens to those responsible for me getting laid off, as my energy is better spent on improving my situation and my life instead of ruminating how Krama vengeance would make me feel better.
The tree remembers. If I have nothing else it's my pride for my craft. I'll probably never have some revenge arc, but I sure will take it personally the next time that company tries to make deals with me later in my career.
Call it cultural; I don't like being treated as a slave. Respect your fellow man, regardless of background or walk of life.
>but I sure will take it personally the next time that company tries to make deals with me later in my career.
You don't do deals with companies who fire people? You wouldn't be working for any company in the world then. IIRC in communism they never fired people, maybe that system will serve you better. Oh wait...
>I don't like being treated as a slave.
"Sent from my iPhone sipping my latte in California"
I wish you all spoiled rich western workers would stop using the slave word so easily whenever an employer does something to you, as it dilutes the meaning and the severity of the word. Similar with the over misuse of the words woke and nazi.
Please read up on what slavery actually meant and the lives of actual slaves. Working in tech in the richest country in the world, and being fired by Dropbox isn't even remotely in the same ball-planet as slavery.
That's a really positive attitude, to not fixate on retribution -- kudos to you!
I'd like to point out that there are other possible outcomes, like (say) the CEO and entire C-suite cutting their salary to $1 for a year (it's not like this will render any of them homeless).
IMHO, that would actually constitute "taking full responsibility", as opposed to parroting words that don't connect to the reality of the situation.
>like (say) the CEO and entire C-suite cutting their salary to $1 for a year
What's the point of being CEO then? Have the stress of running a company while working for free? Who would ever want to do that?
>What's the point of being CEO then?
I don't know. As you said, it's a waste of energy to wonder about other people and their endeavors. Better to focus on me.
And I need the money. CEOs don't. Feels odd to go from "don't spend your energy thinking about other rich people" and then go "but rich people 'want' money" when someone makes a suggestion.
>Have the stress of running a company while working for free? Who would ever want to do that?
Again, don't know. But I suspect that most people at a CEO level are not just in it for money. There's easier, less stressful ways for millionaire to accrue money.
>I don't know. [...] And I need the money. CEOs don't.
That's some silly delulu shit right there. Imma end this conversation with you right here since you're not arguing in good faith as you've already made up your mind, so it's a waste of my energy and time to continue this any further.
>Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something.
Please don't break the rules if you want to stay a part of this community.
I'm just passing by, but to me your comments were way less productive and interesting in this whole thread.
So just like your comment?
What did you expect productive about this whole conversation?
Did you expect to see the magic formula/solution to people getting laid off from well paying tech companies and somehow I got in the way of that?
We're all just chatting here speaking our minds which has the real world practival equivalent of shouting into the void. There's no real value to be had here.
Claims to take full responsibility but since he has not resigned he has not taken any responsibility he has just said the words.
That's not what it means.
As CEO, it's his responsibility to make/approve the decision to do the layoffs, or not. The buck stops with him. That's all that it means. It doesn't mean he's liable for any hardships.
I'm more with GP.
If "responsibility" only constitutes "I pull the trigger, and I don't care what happens as a result", then that is a fairly weak kind of leadership -- ostensibly not very different from a child doing whatever they want in a consequence-free manner.
I want to believe that "responsibility" not only constitutes "I can make things happen", but that "I am willing to Make Things Right if my actions cause things to go sideways".
If I'm wrong, then we live in a world where "taking responsibility" means "using power", and "I take full responsibility" means "yes, I used my power to do that" and that's Not Good Enough to call such people "Leaders".
Layoffs are a fact of life with businesses. It sucks. I'm sure these CEOs do not enjoy doing it, but someone has it in their job description (i.e. the responsibility) to make those kinds of decisions.
You may have it in your job description the responsibility to do performance reviews on your reports. Those reviews can make or break a career. If you do them honestly and with the consideration they deserve, you should not be expected to personally bear the consequences of giving someone a deserved poor review.
It's too bad we don't live in a perfect world where everyone has a job and is never at risk of losing it. But if wishes where horses.....
If that was what responsibility meant, then by definition any CEO is fulfilling their responsibility.
The moral meaning of responsibility here means that the CEO takes responsibility for the lives and livelihoods of those affected -- which does feel a bit hollow when the CEO presumably is not only not affected negatively, but probably will be rewarded for increasing shareholder value.
"Some of you may die, but that is a risk I am willing to take" - Lord Farquaad, Shrek (2001).
Fitting for a movie from a studio made out of spite for another future trillionaire empire.
Exactly, it doesnt mean that the CEO is submitting themselves to whatever consequences internet users deem appropriate.
Avoided the "20% more space at Dropbox" headline - check
I was hoping for a 20% price reduction.
how would you like the next CEO to handle it, for reference?
Stop saying "take responsibility" if they aren't actually.
If you knock a girl up and you "take responsibility" it means you getting married.
If you are in a car wreck and you "take responsibility" it means you are paying for repairs.
If you commit a crime and "take responsibility" you are going to jail.
So if a CEO is "taking responsibility" it should be something like that second case, dollars from their own pocket to the effected party.
Have you considered that not everyone shares your opinion and that this could explain the difference between reality and your expectations.
My insurance companies and government definitely share that opinion of responsibility. So, yes. But my answer remains "take responibility and mean it".
I'd love to hear you explain how I can get out of paying my car insurance of alimony though with this line of reasoning, though. Could be useful one day.
here is a pro tip: If you call your car insurance and cancel, the government wont make you keep paying it every month.
Much like employment, each party can cancel. You didn't sign a lifelong contract for insurance.
CEOs are responsible to the board of directors and shareholders. The BoD and shareholders are who choose and remove CEOs and you can bet both are considerably displeased when the company isn't as profitable as they expect.
That's the best part of modern tech markets in a not-recession recession. They are still profitable but will layoff because it's fashionbble or to make more money.
GP asked what should CEO say instead. Not what should they not say.
Absence is also part of the content.
These words mean nothing really. I expect the next CEO to not use meaningless phrases. How does "taking responsibility" works in his case? What does it even mean other than PR fluff?
It means he’s saying people should be mad at him instead of at someone else. It seems to be working.
I mean, it's him and the shareholders who probably pushed for this. There shouldn't be anyone else to be mad at.
I guess the government for not regulating this kind of thing to begin with. but that's a bit out of DBX's purview.
why would you expect the next CEO to not use weasel words? it's like they all go to the same "mom school". they all go to the same tailor to make teflon suits so nothing sticks to them, and they all learn the same "rain in spain falls on the plain" dreck.
I mean he's just stating what his job is. CEO is responsible by definition. He's saying "Hey all this is my job."
No, responsibility is not a word. Responsibility is an action.
If I'm on-call, I'm responsible to carry my laptop with me and be available immediately to fix critical issues. I don't just say "I take responsibility of being on-call", and the leave my laptop at home, get drunk and fall asleep in a bar for the weekend. That's called being irresponsible.
I see. But that's still like doing your job. I do my job for being on-call by having my laptop with me and phone on, etc. If do my job badly I get fired.
So this CEO is saying, "if I do my job poorly I understand I could get fired."
But, did he/she do their job poorly? That's the thing I can't figure out quite yet. It seems it was bad for the laid off people, but maybe not for Dropbox?
>"if I do my job poorly I understand I could get fired."
If I got a million dollar parachute when I do my job badly, I would love to "take responsibility" as well. Fuck the people, I get paid either way here.
> But, did he/she do their job poorly?
in a fiduciary sence short term, no. So shareholders are happy since that's all their care about.
Long term, who knows? I don't see them closing the gap with Google nor Microsoft so this could just accelerate that downfall.
in a spirit of, as some politician say, "creating jobs and stimulating the economy", absolutely awfully. We have 500 more workers out on an awful job market and it's not because DBX wasn't profitable. They simply dropped workers to prepare for a bad time that the US economy doesn't want to admit out loud.
A 20% layoff means either the market changed very very quickly or something went terribly wrong in the company strategy. Here it's the second scenario and I'd expect the CEO to be on shaky grounds after such bad results.
There needs to be more explanation on where the CEO screwed up that badly and the consequences for the management.
At the very very least, they should be explaining how Dropbox is suddenly a 20% smaller company, because either that means the market has contracted by 20%, or Dropbox has shit the bed as a competitive entity in said market.
Both options should directly imply that the CEO should earn less. Either you're running a smaller, simpler company, or you sucked at your job.
Eat the loss.
They aren't 20% smaller, they stopped growing. Some of those positions existed to help them continue with growth, which now isn't happening.
They reached market saturation, which isn't the same thing as failing.
If he was responsible for the conditions that led to the layoff, he could also resign.
Layoffs happen even in well run companies.
Actually they don't. Well run companies have cash reserves and expect to have periods of ups and downs. They don't pray to the alter of the next quarterly report.
They do it to suppress wages, not only because of economic instability. It’s worked - wages are down across industry. Wage suppression is one of the responsibilities of a well run business (the CEO together with HR hires consultant help for this or they hire a benefits and wages role, and it’s referred to as market positioning)
It's pretty cynical to say that wage suppression is one of the responsibilities of a CEO. But perhaps not off the mark.
If only we had the equivalent on the other side to balance the equation. Some kind of a group of individual employees, who work together to counter wage suppression efforts.
historically in tech, that group is some new competitor that "disrupts the industry" and either becomes a new power respecting talent for a while, or gets bought out by a megacorp and given that huge salary once again.
That's really the main saving grace for this industry; the scalability that a few employees can still provide a solution that makes corporations with hundreds of thousands of workers sweat. That's why they surged salaries so aggressively in the 00's and half the '10's
That's also the reason why unionization will be a hard argument among tech workers. Slowly starting to happen in the games industry, so that at least confirms there IS a breaking point somewhere for that to happen.
> Actually they don't
then they probably should
not saying I should go work for McKinsey, just noticing that unnecessary payments are likely happening. companies don't exist to employ people. employees exist to help companies. just make everyone a decent shareholder with decent liquidity and move on when the employee isn't necessary.
>companies don't exist to employ people. employees exist to help companies.
Companies in society exist to serve the customer, provide labor opportunities, and overall stimulate the economy (all of which is needed to make money).
This mentality above is exactly why the latter half of Millensials and Gen Z were demystified by the labor market and simply don't take the kind of "loyalty" narrative of the older generations. You can't talk family, layoff "family" every 2 years regardless of talent and pretend that "hard workers get rewarded". So you'll get the bare minimum, you will get no overtime when you request it (especially if you aren't paying 1.5x), and you probably won't even get the long dead 2 weeks notice when I move on.
You can't expect much more "help" when you can't give the basic modicrum of respect to your help.
> just make everyone a decent shareholder with decent liquidity and move on when the employee isn't necessary.
most jobs don't have RSUs. Not even in tech.
Well run companies laying off 20% of the global staff?
None come to my mind, do you have any examples?
> Well run companies laying off 20% of the global staff?
Well run companies laying off 20% of the global staff a year after laying off 20% of the global staff?
well run companies do not hire more employees than they can afford
I would like for there to be a next CEO
Take a pay cut. Return last year's mega bonus.
They should make whole those affected, as best as possible. The CEO, who is the responsible party by their own declaration, should distribute their personal wealth to those affected until all parties have approximately the same amount of wealth.
By letting a lower rung employee take the responsibly. This is giving CEOs a bad name and is only one step away from the board taking the heat.
With the resources that would otherwise be given to the excised one, is a good start
How about describing what exactly taking full responsibility means for them in that particular situation?
Saying e.g. what is the impact on the situation for those responsible might be nice - no bonuses for next year? A plan in place so that this doesn't happen again? Stepping down as a CEO?
I mean, if I take responsibility for e.g. wrong tax filing, I pay the fine penalty, and/or go to jail.
Saying "I take responsibility" some kind of failure while having no consequences for said failure is not taking responsibility.
Conversion to worker coop
The severance package is great!
I don’t think I would be upset (unless I was extremely passionate about a project I was working on)
I dunno. It may take 1-2 months to prepare for Leetcode style interviews, and this can be pretty mentally exhausting. Every time you fail to solve a leetcode question, it feeds your imposter syndrome, which is probably even worse due to getting fired.
If leetcode wasn't hard enough to make a good programmer fail now and then, there would be no point to it.
If Leetcode didn't provide discrimination defense and neg the candidate shortly before offer, there would be no point to it.
If companies just accepted good programmers and were frank with themselves that they are not going to find rockstar 100x programmers for half the market rate, Leetcode would be acceptable.
With all due respect, that sounds like a personal shortcoming to me. One can (and should) not take interviews personally. One also can (and should) be able to acquit oneself well at an interview even without prep time.
> One also can (and should) be able to acquit oneself well at an interview even without prep time.
I don't agree. If you don't prepare at all for an interview, it shows. Aside from leetcode, it's also important to research the company.
My point is mainly that I might be upset if I were in that group that's laid off today. I don't want to prep leetcode for several weeks. It feels like a waste of time.
I've never prepared for an interview in my life, and I've never had any difficulty. Anecdotal of course, but I think prep for interviews is vastly overrated.
You're telling me you maintain the ability to pass the various interviews that the modern FAANG SWE gauntlet requires year-round? Good for you if so, but this doesn't match the experience of any of the folks that I've worked with across my career.
Who said anything about FAANG? I don't work in that world and in fact you literally could not pay me to do so. It seems miserable as hell. But Dropbox isn't in that world either. And in any case, I've never ever had to prepare for a job interview at all, let alone for multiple months. They aren't that hard in most cases.
Dropbox is (or at least was) renowned for having one of the hardest software developer interview loops.
16 weeks + 1 week / year severance works out to 3-5 months.
Looks like enough time to prepare, take a vacation, ect.
Wow, that's horrible. And you might even have to stay at a 4 star instead of a 5 star resort in Bali when you take a vacation during your severance, job market is tough.
Even worse, you might have to miss one contribution to your FATfire investment account to deal with the extra risk. Compounded, that missed contribution might mean you'll have to retire at 46 instead of 45.
How dare these companies treat these people this way. They took the massive risk of working for an already-successful company at $250K/yr with a $200K stock package, and now fat cat Drew Houston dares to leave them with just an abnormally large severance after they are no longer needed.
I don't think your tone aligns with the community guidelines[1]. Please consider not being snarky and sarcastic but actually responding to the merit of what people say here.
[1] https://news.ycombinator.com/newsguidelines.html
As a fellow tech worker, I genuinely believe all the things I mentioned are upsetting. It's happened to me before!
I realized though that I was probably going to be okay, and what I actually needed was some perspective.
Sometimes the contrast of "sarcasm" is the only way to shake you out of your bubble and give you that perspective.
Sarcasm is bad. It would have been fine to say "I think there is a social contract of it being acceptable to lay off workers making 400k".
>I realized though that I was probably going to be okay
I thought so too... that was 13 months ago.
I still am okay, but only by pure blind luck. And okay in a "rice and beans diet" way. The actual interview gauntlets are worse than my first job search.
And yes, luck = preparation x opportunity. But I was literally cold called by a founder. My experience spoke for itself, but it only helped me tread water instead of sink into the abyss. Sure didn't work the other hundreds of times I kept searching.
>Sometimes the contrast of "sarcasm" is the only way to shake you out of your bubble and give you that perspective.
Again, the guidelines
>Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes.
Assumptions are horrible on the internet because it only enrages those who do not fit your strawman. I did everything "right" and I end up laid off twice, draining all my savings and a bit of my stock, and being gaslighted for over a year when I could grab multiple offers in 3-4 months the last few job hunts.
I work in games, I'm not making 500k salaries and was well prepared for layoffs. but I was doing very well for myself. So it's tiring hearing people deride my decade of experience with "well maybe you weren't actually a good worker". I'm definitely not a 10x-er, never have been. But it's backwards hat I have more experience now and am desired less for my experience.
It's just bad times. The sooner we can accept that, the easier it'll be to come together and weather the storm. But with layoffs it seems like all the elitism comes out instead.
Considering how horrible the job market is right now, four months of pay may not go very far.
I've heard of folks with 10+ years of experience not finding work in 9 months or more.
Hello, I'm one of those. Well, 9 years but close!
It really is a circus out there.
> The severance package is great!
that's a function of how low the bar is in the US
This is a bullshit package because of the healthcare.
I was laid off from a different company with access to 18 months of COBRA. Dropbox is offering a third of that. Lots of job searches take longer than 6 months, so the employees are going to be left high and dry right when they need it the most.
For the non-Americans, my COBRA expenses are about USD$2,000/month for me and my partner. I’m paying as much for healthcare as I am for rent. Even so, it’s still financially better to take COBRA than pay out of pocket for my prescriptions.
I wonder if they meant paid COBRA of 6 months, bc 18 months is like the minimum to offer continuing coverage. COBRA coverage is a Federal Law for large employers.
https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-a...
"Q11: How long does COBRA coverage last? COBRA requires that continuation coverage extend from the date of the qualifying event for a limited period of 18 or 36 months. The length of time depends on the type of qualifying event that gave rise to the COBRA rights. A plan, however, may provide longer periods of coverage beyond the maximum period required by law."
All West Coast states have free healthcare (medicaid) available if your income is below a certain threshold. And there is no time limit on that. It won’t help with rent, but at least these folks won’t be completely without healthcare access.
There's pretty much no way they'd qualify for Medicaid if they were a dev at Dropbox. The income limit for Medi-Cal is $20,783 for a single adult, $28,208 for a household of two adults. Chances are they were past that income limit the first few months of the year. You don't just immediately qualify after making $140k annualized for the first 10 months and then hit $0 one day.
Plus, they're getting 16 weeks of salary. At $140k/yr, that's $2,692/wk. Lets say their severance starts next week. There's 8 weeks left in the year. So they'll get 8 weeks of pay in 2025. $2,692 * 8 = $21,538. So no, they won't qualify for Medicaid at all in 2025 if they make that much as a single person.
True but even making $140k/year does qualify you for tax credits on ACA marketplace health insurance plans. COBRA is kind of obsolete, honestly. You should be switching over to a insurance plan purchased through your state's health insurance marketplace.
Totally agree there. Chances are they'll be better served with a marketplace plan unless they've got a complicated health situation/very specific care that might be questionablly covered without thoroughly shopping around.
I'm just pushing back at the idea someone can go from making six figures and turn around and hop on Medicaid. It's not that simple. It should be IMO, but it isn't.
Even if one does qualify for those programs, the sign-up time is on the order of almost a year here in California. Applications are Supposed To Be™ reviewed within 45 days, which is already a long wait, but they are using the new normal “due to higher than usual volume, fuck you” approach just like every other modern bureaucracy.
https://www.dhcs.ca.gov/individuals/Pages/Steps-to-Medi-Cal.... sez “Due to the high volume of new applications, the process is taking longer than normal”, and I have secondhand experience of six+ month wait times.
Expenses incurred during the coverage gap need additional approval for retroactive repayment, meaning you have to have the funds to pay upfront for however many months/years the sign-up process takes, then once your coverage starts you have to apply/wait/hope to be paid back for everything paid out-of-pocket which might just get denied: https://www.dhcs.ca.gov/formsandpubs/forms/Forms/mc210a0907....
You have to be destitute to qualify for medicaid
Really? 16 weeks of salary, or 4 months of pay. In my country, you get 3 months of pay as standard when you're fired from your job. Doesn't seem that great to me to be honest.
In the US, the minimum required is usually zero. The most I ever got was 4 weeks.
The minimum needed in the US for this situation is 60 calendar days [1]. Hence the 16 weeks.
https://en.wikipedia.org/wiki/Worker_Adjustment_and_Retraini...
16 x 7 = 112 days, I’m not sure I understand your comment? Even if it was business days only, 5 x 16 = 80 which is still above the minimum needed.
The WARN Act doesn't mandate severance payments AFAIK.
I think perhaps that's why poster used "for this situation" -- if a company doesn't want to have to provide advance notice, their only option with WARN is to do it with this kind of severance payment. Not sure if it was intended but that's a pretty cool outcome of the law.
US salaries are quite a lot more; lifestyle creep is a thing but at least for developers they get paid a lot more than the average worker in the US than say in the Europe. Factoring that, 4 months is amazing.
Do you earn SF salaries in your country?
They probably don't have SF housing costs in their country.
In big tech in the US, 4 months is usually enough to find another similar job in the industry. Also in the US for mass layoffs at big firms, the minimum is effectively 2 months because you are required by law to give 2 months notice to workers about such layoffs, 2 months severance is a way to not have to give such notice.
In this market, 4 months definitely isn't enough to find a similar job.
But are you not expected to work those 3 months? 4 months of pay without work is decent, but not amazing.
> But are you not expected to work those 3 months?
When you are leaving on your own term yes.
When you are laid off you are technically still an employee for those 3 months but nowadays many companies will just tell you to not show up for security reason.
It sounds like it's 25% better than what you get in your country?
Personally, I'd consider this nothing to write home about. It's OK. Not great, not terrible.
If we're laying off 20% of the company, I'd expect the package to be somewhere in the 6-12 months range. To me, that would seem more fair, considering they are completely restructuring the whole company.
I'd rather take having a tech industry at all and the 2-4X bigger US salaries (and 30% lower average taxes) than having my fellow citizens shoulder the burden of giving me 6-12 months of daycare.
In the US luckily the job market is still quite dynamic (and extremely tight by historical standards) so only in an extreme scenario would someone with Dropbox on their resume need 12 months to find another job.
They might have to take a pay cut from a 99th percentile salary to a 96th percentile salary though. Rough, I know.
Yeah, nothing to write home about until they pay inflation adjust salary till retirement age of 67 for all laid off employees.
“25% better than legally required minimum” is not generally considered “great” in many circumstances.
Comparison is the thief of joy. In the US, any amount is... infinity %? Undefined %? better than the legally required minimum of 0.
33%
I'm sad to see so much venom in these comments. HN of old would have tried to delve into the details and find something to learn from this.
This literally happens every single time there is a big layoff announcement on HN; at this point it's completely predictable. People love these stories as a place to vent (not that I necessarily blame them), but I do find that these kind of stories always attract the lowest quality comments. E.g. "Why hasn't the CEO committed harakiri!" Which is always a bit sad to me because I think the biggest mistake (especially in highly paid industries) is to think that a layoff is the end of the world and the absolute worse possible thing that can happen to someone.
we've seen so many of these stories, the same narratives (which are just that. words, not actions nor plans), and no further insight on their real reasons.
What is there to say or inquire about? The human element is way more important.
>to think that a layoff is the end of the world and the absolute worse possible thing that can happen to someone.
Short of sickness or death of a loved one, I struggle to think of anything worse than losing my livelihood out of nowhere.
I guess if I owned a house and it burned down? I can insure that at least. Job insurance seems to be dead these days.
Car accident? if no one was hurt that's much less worse. I can rent a car until insurance figures itself out.
What kind of dismissal is this? Have you ever been laid off? I'm genuinely wondering what your mindset here is when you made this comment.
Ahem The CEO's breath smelled of genitals
We've learned it because we've seen this movie many times over the past couple of years (the catalyst perhaps being Musk's decimation of Twitter): it's become acceptable -- and perhaps not only acceptable but expected -- to suddenly cut a significant percentage of your workforce in order to "drive growth", with some BS platitude (the details of which vary a bit but they all read pretty much the same).
It's not venom, it's an appropriate response by workers to the "shareholder-value-at-all-cost" race that the industry finds itself in; an industry that has prided itself, and often built companies on, values that are the opposite.
That, and the fact that CEOs have no accountability for these decisions.
I saw the venom the other way. People are losing their livlihoods and I see such dismissals as
- "You shoud have saved more money"
- "oh well you'll get a better job soon" (have not seen the job market the last 2 years)
- "They were probably low performing workers anyway, they deserve it"
- "It is what it is. Business is going to business"
- "The CEO's are just doing their job"
I hate it. We can't even come together as a community, which consists of many tech workers, to empathize with our peers. No wonder we can't rise up and bring about change from grassroots.
Let's keep trying. What learning opportunities do you see in the details here?
Just off the top of my head: every engineer should have 6+ months of savings. Market isn't great but our salaries can help build those savings easy.
If I had more time, I would love to understand the fss market better and also what impact ai is having there. I don't see a Q3 earnings report from Dropbox, but as others have pointed out in other comments, Dropbox seems to have been doing fine financially.
> Dropbox seems to have been doing fine financially
Not really.
The issue is Dropbox's core product is heavily commodified (Cloud File Store for Enterprise and Consumers).
Dropbox's EBIDTA is much lower than peers in the Software industry making it a much less attractive investment - even public companies need to attract investment.
Furthermore, Dropbox has missed out on multiple trends that it had the right ingredients to execute on, such as DLP, DSPM, AI Search, AI-leveraged Business Tooling, etc.
It's not that Dropbox didn't try building these teams - they did and I know plenty of people who were hired to work or lead these initiatives - but tech is competitive and they got outcompeted.
At some point they have to initiate layoffs in order to retool internally and concentrate on the BUs that actually generate outsized revenue along with strategic bets that can help make Dropbox more enticing.
> every engineer should have 6+ months of savings. Market isn't great but our salaries can help build those savings easy
Pretty much. Layoffs have always a thing in the tech industry.
And compared to previous cycles (early 2000s, 2008-2013), the current job market is fairly standard for mid-career.
I think this tech downturn is just the first one that a lot of 2011-22 grads went through and it makes them feel like it's the end of the world.
Keep saving, keep upskilling, and keep networking - these are what save you when we all (inevitably) get laid off.
"every engineer should have 6+ months of savings. "
I did. Even stretched it out to 9 months (getting a freelance gig out of nowhere helped). But it's been 13 months with no full time work.
>Market isn't great but our salaries can help build those savings easy.
It did not. Not everyone's making 300k at Google.
>If I had more time, I would love to understand the fss market better and also what impact ai is having there.
nothing short term, but the usual suspects come about as usual. Trendsetting from Twitter, ZIRP, tax code changes affecting how to amortize tech salaries, an anticipation of a downturn in the evonomy, and AI speculation (not really affecting tech, but other areas).
Those are each worth their own post, but this is againa topic talked about a lot . Since this has happened a lot.
And yes, this wasn't a layoff of necessity. That's the "venomous" part about it. Why Wouldn't I be mad at blatant greed?
I think the real learning here is that the company is still around even though they are sort of not in the popular zeitgeist at all anymore and there are so many other tools that does what they do.
It is still around even if as a Linux user I can get ftp server and mount it locally then use CVS or SVN … ;)
this is a good deal, better than most retention packages out there.
But why is every ceo feels obligated to use this kind of meaningless corpo speak in these emails? "Macro Headwinds", "full responsibility"?
PR-speak is the same everywhere. The audience for this is Wall St, not the general public.
Gotta prevent panic in stockholders is the main priority of a CEO in publicly traded companies. They only concern themselves with the well being of their employees as much as how it affects the stock price.
Because they risk getting punished by angry shareholders and risk lawsuits and risk losing customers if they deviate from the corporate speak to say anything substantial.
Something weird I noticed about Dropbox: I cancelled my paid account two years ago. I had 5 terabytes of storage being used (mostly shitty concert vids and food pics).
Everyday they email me telling me I’m over my limit. They always “threaten” to delete the data but it’s been two years since I cancelled.
My Qs are: why are they hoarding my data for so long? Why would they want to do this? How cheap is storage for them to want to do this? How likely is it that they have sold my data to train various LLMs with?
If they delete your stuff, you almost certainly won’t resume your subscription. The cost of storage may be lower than the benefit from re-subscriptions, and possibly the cost of actually implementing and maintaining an automated deletion process in compliance with all jurisdictions.
You can just delete your data dude. No one is forcing you to keep it there. They’re generally not going to do something destructive because of unpaid bills. It’s nice of them
But why do I have to log into Dropbox to do this? I haven't logged into the site in 2 years and don't plan on it. I just find it odd that they keep threatening to delete my data but from where I'm standing it looks like they will keep my data indefinitely.
I'm not forcing them to do anything. I terminated my service and they're still keeping my data. Seems like shitty consumer rights that they'll just keep the data regardless of what I do.
That's what I'm trying to figure out, if others have similar stories.
>Seems like shitty consumer rights that they'll just keep the data regardless of what I do.
But they aren't keeping it regardless of what you do. You can ask them to delete it and they will. The power is in your hands and you are refusing to use it.
They are absolutely keeping it regardless of what I do, I cancelled two years ago (next month it'll be three years) and they send me daily emails about how they will threaten to delete the data when they have no intention of doing so.
You don't find that misleading and poor for consumers? Companies shouldn't have carte blanche to do whatever they want. Especially when I terminated a service years ago.
Most people want data retained. Termination =/= deletion. Just Log in and delete your data.
Dont expect them to read your mind and complain about it.
https://help.dropbox.com/delete-restore/deleted-files
Once again you think it's a good policy to indefinitely retain data after nearly three years since canceling and you can't imagine why consumers would be upset about this policy?
Hopefully something breaks through your mind, maybe you're understand why the majority of the public don't trust or like big tech.
I understand some people want their data deleted, but think more customers would want the data saved in case they renew.
The part I dont understand is feeling helpless, complaining, and dealing with daily emails when it would take 60 seconds to log in and delete the files.
It is like someone who cant be bothered to wipe their butt complaining about the smell.
Maybe they are just good people and don't like to do evil things like deleting someone's life memories?
This is a company, so no.
> sold my data
Sure the license agreement would not legally permit that.
I wonder what kind of legal recourse you would have. There's obviously copyright infringement, but I think state laws like CCPA include remedies for violations.
Company isn’t doing so great and future doesn’t look so great and people cost a lot of money so they are letting folks go who aren’t as valuable. This makes sense.
What doesn't make sense is hiring so many people to begin with. The writing has been on the wall about Dropbox for quite a while now
Agreed! So many of these companies hired needlessly over the recent years.
It wasnt needless, they didnt want to miss out. They are not sure what they didnt want to miss out on, but they knew for sure that they didnt want to be the only one not doing it.
If you look at its earnings they have appeared to plateau and there isn’t a major offering planned that will change this.
I am reminded of Slack which has a similar history of rapid growth followed by a very competitive market and then significant slowing. Maybe Salesforce could acquire Dropbox and bundle it into their offerings or some other similar company?
Slack shot their own selves in the foot iirc. They were miles ahead of any competitor, employees loved it, and then they just started gouging all their whale customers in contract negotiations, to the point that they started looking elsewhere...
If this isn't the full picture, let me know. I was at multiple companies trying to move away from Slack as the cost was not justifiable
MS Teams was a large contributor as well to the downfall of Slack. It automates decently with the stuff most companies already have (AD, O365, and most importantly all that compliance bullshit), and nowadays it can even do landline telephony, providing enterprises with a way to reduce their exposure to Cisco crap on top of it.
In the end, Microsoft is IMHO once again abusing its stronghold on the market. Just the enterprise-compliance-integration stuff is more than enough to cause any medium or large company to move off of Slack or its competitors (e.g. Mattermost).
What are they moving to, though? I can't imagine that Teams is any better.
Teams and Google Chat. They're both incredibly bad compared to Slack. But if your org is on 365 or Workspace, you're already paying for them. Big orgs don't love double-paying, quality be damned.
Teams is close enough, especially given its cost.
Slack displayed alot of hubris and didn’t pivot. Their goal should have been Microsoft or Google acquisition.
We’ve heard from many of you that our organizational structure has become overly complex, with excess layers of management slowing us down.
So we're making more significant cuts in areas where we're over-invested or underperforming while designing a flatter, more efficient team structure overall.
So a lot of middle management getting let go then?
That's been the trend at many companies recently. Cut a middle layer and consolidate.
> "As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change."
As with other CEOs who say such things in similar situations - does this "responsibility" amount to anything? Like loss of salary or options or seniority. Or is this just empty words?
I appreciate that this action is probably necessary to safeguard the business but, as someone who has been at the sharp end of a number of redundancies, I wish leaders would be honest:
"We tried stuff but it didn't work. I was and am in charge, and I'm staying. We're making you redundant because we need the money more than we need you."
Obviously no leader would say such a thing. But the people affected (and thas not just those being made redundant) deserve honesty, not platitudes.
"I earn the big money because I make decisions and I take risks (with others lives, but let's not talk about that). My decisions haven't worked; my risks haven't paid off. I'm however letting you take the hit, because I'm too important for that kind of shit. I've more decisions to make, and risks to take. My family is fine; my pay is fine. It's just you who are affected.". -- Your CEO, who still makes more money that you do (or don't), no matter what.
Most people understand that companies need to adjust in size. There’s nothing moral about it.
(Your comment was dead but I vouched for it because I want to explain why youve failed to appreciate an important distinction.)
tldr: the redundancy is not the announcement
I think people (and I include myself) do understand that companies need to adjust their workforce. I think that decision is not wholly moral in nature. But it does have a moral component - and Dropbox seems to appreciate that somewhat in the assistance they're providing the people who are leaving.
But what isn't moral is an individual announcing publicly that they take responsibility for acts that cause trauma to others (however constrained that decision was) while in reality that responsibility-taking involves no consequences at all the individual. None.
In the large train station in the city where I live, the automated voice announcements "apologise" for train cancellations. I'd argue that this is as empty and insulting as this CEO's email - because no responsibility has in fact been taken. The CEOs words and the announcement software are as morally empty as eachother.
If You Want To Tell People the Truth, You’d Better Make Them Laugh or They’ll [unalive] You
-- Some famous person's quote that I paraphrased.
You’re allowed to say kill on Hackernews
The uncomfortable truth is that pretty much any business can cut staff by 20% without impacting overall performance. Provided that you manage to weed out the tail end of the performance bell curve that is.
Most of the time, reducing staff is a healthy move for the business and the impacted employees. The company will not only save cost, but strengthen its culture of high performance. And under-achieving employees are often fundamentally unhappy in their role. While the short term impact of being made redundant can cause some distress, these people can still use the occasion to reset their careers.
So all in all, no reason for grief.
They don't know which 20% needs to be cut. That's why they wait until something unrelated to their business internals (market downturn, other companies are cutting) happens to try.
I remember seeing somewhere an analysis that layoffs do not improve medium or long-term stock performance for companies performing layoffs. But if layoffs are coordinated sector-wide they can have a big impact on employee compensation in the sector by creating a reserve army of unemployed.
Yes, it's justified on the same economic basis as pricefixing, and unionization with coordinated strikes if you interchange the parties.
I was originally a huge fan of dropbox, and still a customer, though reluctantly these days.
Dropbox has fallen so far behind many other companies. Google photos search is amazing, it merges people even if they don't have contacts, it has really good image recognition, it has some sorting/ordering amongst many various dimensions.
Why can't I make small edits to text files in dropbox? Why haven't they added any useful apps?
Why are they not the best photo organizer/searching system?
Keep in mind that knowledge work isn't really a bell curve, it's more of a power law. https://www.hermanaguinis.com/pdf/PPsych2012.pdf
Du you have sources for this? Now I'm not much better but I actually think there are several studies that show correlation between layoffs and worse than average performance.
It absolutely affects morale for the "suvivors". you don't just cull a fifth of your company like cattle and expect the remainers to be blissfully ignorant. Also, top performers seeing this, even if they survive, will definitely start shopping around. It's an awful move for companies in the middle-long term. T
The titanic was warned over a day in advance. It then took 3 hours to sink. You can absolutely be sinking but look to be productive for a while. Especially if the company just wants to tread water instead of grow. And I hope they have enough lifeboats ready when that time comes.
Evidence, please. From what I've seen in person, it doesn't work this way at all. Companies don't have a great fix on whom to cut, and it usually just makes the other employees feel stressed (and start looking at other jobs), while the unemployed suffer very significant life stress.
> The uncomfortable truth is that pretty much any business can cut staff by 20% without impacting overall performance.
Sorry, but I call BS on this
So, reduce people to numbers and accept the suicides?
Perhaps the better lesson is that tying your self-worth to your corporate employment is a really, really bad idea.
I realize that's difficult in today's performative world, where an quick perusal of LinkedIn shows loads of people that are "passionate" about banking compliance or insurance claims or whatever. Many companies have also have fostered this false idea that companies are a "family". That is always false. The best companies are more like a team, and when things start to go south, sometimes people on that team are cut.
Ironically, I think the professions where people really are passionate and see it as a "dream job" (think professional sports teams, actors, musicians, artists, etc.) generally have a much healthier view of their employment in the first place because they realize how tenuous it is to begin with. Point being, if you're considering suicide if you lose your job, you should be in therapy long, long before it gets to that point.
One final note: before I get the pushback of "that's all nice to say until you have no income and are living on the streets!", let's get real for a moment. First, I have a ton of sympathy for people who are laid off - it sucks and can be very destabilizing. But lets also get real - people were laid off from Dropbox with a very generous severance package and they are in a highly paid industry to begin with. None of these people are going to starve, and nearly all of them will be able to eventually find employment (if perhaps not at the same exact high salary as Dropbox). Any mental health issues folks have after getting laid off is nearly always the result of tying one's self-worth to one's job, and that's the link that should be broken.
The only thing we would agree on is that disconnecting self worth from a job is, in general, a good idea.
I have spoken with professionals in ballet and they actually feel mental strain from having to file for unemployment when off season. Even though it’s considered normal practice it doesn’t mean it’s right to treat people like that.
Dropbox gave a generous severance? Maybe, but is that is the case everywhere? I can tell you, the start up I worked for before, Aurora Innovation, only gave people one week for every year worked and they were doing silent layoffs in groups of five. One of those people was a young father on H1B who had been there less than a year.
Saying you should be in therapy long before it happens is rather callous. How was that father, or any of the other people, know they would need therapy beforehand for something they have no control over? It’s like saying you need therapy before an earthquake destroys your home.
>tying your self-worth to your corporate employment is a really, really bad idea.
We can talk philosophy all day long. I just want to pay rent, respecfully. People telling me to "upskill" seem tonedeaf to this.
And this isn't some thing unique to tech. All jobs dried up. I wouldn't be worried otherwise if I could find ANY work right now.
>But lets also get real - people were laid off from Dropbox with a very generous severance package and they are in a highly paid industry to begin with.
okay. Other companies don't. I got a month of severance and saved up 6 months.
It's been 13 months. What now? I'm not starving but only by dumb luck.
>Any mental health issues folks have after getting laid off is nearly always the result of tying one's self-worth to one's job, and that's the link that should be broken.
No it results from peopel stresse on how to survive. Maybe be real and look outside the FAANG bubble every once in a while. I'm not worried about Dropbox, but everything else in this BS economy that pretends to be soaring.
I don't belive you have any sympathy given this comment. You just want blame anything except the environment and people not magically being prepared for 6, 12, 18+ months of unemployment in what was very recently a "hot market".
You think that people who are doing nothing all day are unhappy?
Protestant work ethic got you by the gizzards.
We call it "rest and vest" here in the tech retirement homes of companies known for being "chill" like Microsoft, Linkedin, Salesforce, Oracle, IBM, Intel (historically), etc
For context, Drew Houston's total compensation for the year in 2023 was $1.5M:
> According to our data, Dropbox, Inc. ... paid its CEO total annual compensation worth US$1.5m over the year to December 2023. That's a notable increase of 34% on last year
via https://finance.yahoo.com/news/heres-why-dropbox-inc-nasdaq-...
Even if Drew took minimum wage, that would save ~15 jobs assuming $100K all-in comp (which seems low to me for a tech salary). 500 employees is more like $50M/year, and probably more.
Of course, Drew Houston's net worth is ~$2B and he could technically loan Dropbox Inc money personally to save the jobs, my guess is a lot of his net worth is actually Dropbox stock that he would have to liquidate and would affect the stock price materially. He would also need to follow insider trading laws too and can't just up and sell vast amounts of stock on a whim. Most executives are on pre-approved schedules to sell any stock to avoid triggering insider trading.
The severance package Dropbox is offering is pretty good - 16 weeks of pay + an additional week for each year of tenure, impacted employees get their Q4 equity vest & prorated bonuses, everyone keeps company devices, an offer for extra time + help for people on visas, and job placement help for everyone.
Dropbox is a public company that is profitable, but not really growing through their flagship product. No growth is more or less bad on Wall Street. They also haven't really had a major hit since their initial file-sharing product and missed some shots they probably should have hit (mainly vs. Notion with Dropbox Paper, Mailbox acquisition, etc). With many systems moving away from "files" and to "cloud objects" like Figma, Notion, etc, their workhorse product might be going away over time too. They need the time and focus to find that next S-growth curve.
Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship.
> Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship.
Layoffs are the trolley problem but you get to pick how many people are lying down on each side of the track and if you want yourself to be one of them.
That said, if one reaches the conclusion that under their leadership they were forced to downsize by 20% (either due to over hiring, failure to reach revenue/growth targets, whatever) that should make that person one of the people on proverbial tracks. Compensation has little to do with it.
>that should make that person one of the people on proverbial track
That's a satisfying thing to say, but as practical advice it's absolutely terrible.
Often that person's leadership wasn't the problem, but even when it was, that doesn't necessarily mean that the company will be better-off without them. And that's the question -- what will make the company most likely to be the most successful going forward? Even if the current trouble is because of some of that leader's mistakes, the answer is often to keep that leader. Sometimes it isn't.
> Often that person's leadership wasn't the problem
Then what is the problem? Ultimately you’re paid the big bucks for being held responsible. Why isn’t it never something like the CEO doesn’t get any stocks that year. I’m not saying he needs to leave the company but maybe he should take a substantial hit to his pay. He has enough money to put food on the table for many years, unlike the people who are let go where it’s mostly a mixed bag.
>Why isn’t it never something like the CEO doesn’t get any stocks that year.
Performance based compensation is absolutely standard for CEOs- Both in terms of options and stock grants.
Do those metrics count "number of people laid off" explicitly?
We know they do implicitly because laying off people makes the company more profitable, but is there any penalty for killing jobs?
If not, shouldn't there be?
No, I dont think there should be a penalty by default.
The objective of a company isnt and shouldn't be to run a charity. Some amount of layoffs are desirable just as a matter of housekeeping. Layoffs can be a hard part of doing a good job.
I think there are extreme examples and tactics where layoffs cross a moral line but not a legal line. for example, I think the humane thing to do is freeze hiring before layoffs so you dont relocate someone only to let them go.
That said, there are already a lot of business incentives to avoid turbulence in headcount. It is slow and expensive to hire people and let them go.
>I dont think there should be a penalty by default.
I do.
>The objective of a company isnt and shouldn't be to run a charity.
Charities pay employees too. 501ks don't mean you run on all volunteers and that it's okay to remove them at your whim. Horrible metaphor.
Anyways, a company has 3 goals
1. serve the customer
2. support your labor to enable efficient production
3. overall stimulate the economy and society
These all help the bottom line of "make profit". Shareholders have little stake here so it's annoying that that is all they prioritize lately. because you then break all 3 rules just for them, who will leave on a whim for some other speculation. And then they wonder why they lose money as workers burnout and leave, as customers get frustrated and move, and the economy gets worse as money is pocketed to the rich instead of the public.
It'a all a horrid death spiral. It needs to stop. It will stop forcefully if not voluntarily.
>It is slow and expensive to hire people and let them go.
And who's fault is that? I don't remember shouting in glee whenever I hear 5 rounds of interviews, including 2 rounds dedicated to trivia.
>Its actually incredibly hard to to figure out which people to cut in an efficient manner.
it is. That's why Hanlon's razor simply tells me they aren't trying very hard. They need to cut numbers, maxiize money and care about next quarter next quarter. efficiency wasn' prioritized before the layoffs, why would it be now?
I dont think we agree on enough fundamental facts about the world to have a productive conversation. It seems like you are in denial about the possibility that some workers can be detrimental to bottom line profit and efficiency.
By the way, the charity comment wasnt about volunteers. Companies are not run as a non-profit charity with workers as the beneficiaries.
Yes we are. You're in denial that most of these layoffs are performance based, and not because of factors beyond their control.
If you're cynical about your peers to think that the default of them in the field is unprofitable and unproductive, we have nothing to say to each other. Learn some empathy.
> Layoffs can be a hard part of doing a good job.
Yeah firing people is so tiring - might have to skip my tee time!/s
/s aside Its actually incredibly hard to to figure out which people to cut in an efficient manner. It is one of the reasons companies suck so bad at doing it, and many avoid layoffs and firing when they should be doing more of it.
The purpose of a corporation is to make money, not jobs.
to play devils advocate, there are different levels one can look at that. From the level of the companies and owners, the goal is to make money.
From the perspective of society there are tons of answers. A common answer is that companies provide goods and services that give consumers more value than they cost, thereby enriching the lives of consumers.
It seems like some people, especially those who take issue with layoffs, tend to think the social purpose of companies is to give jobs/money to workers. This leads to a lot of frustration for those people because the entire economic system is set up such that jobs are an optional byproduct of making goods, not the other way around.
We live in a society where there are more metrics than money. The entire notion of corporate amorality is a thin veil that people use to hide their own unethical and immoral behavior.
That's why I made the comment that layoffs are the trolley problem. It's an ethical question and companies don't always make the ethical choice, for example choosing profit over jobs in a downturn.
That presupposes an ethical obligation to provide jobs, which is of course at the center of this.
If you think companies have a ethical obligation to provide jobs and do so continuously, of course you will find issue with the rest of it. All objections stem from this, and it is controversial.
I disagree, and think you're missing the forest for the trees. I think that people have an obligation to keep their promises to other people - that's a virtue called honesty or integrity. When a promise needs to be broken, that presents an ethical dilemma.
One example of people making a promise is hiring. A layoff is fundamentally breaking the promise you made to a group of people to keep them employed - whether that's the most ethical choice or not circles back to the trolley problem. If 20% need to be laid off to save the 80% then it's not an unethical choice. If 20% need to be laid off to make up for the mistake of a small group of leaders in order to benefit the small group of shareholders, then it's unethical.
> All objections stem from this, and it is controversial.
It's only controversial when you pretend that you can absolve an unethical choice by placing it behind the corporate veil. It's not controversial outside of Milton Friedman disciples.
Is retiring or quitting also breaking a promise?
Do you think hiring is a promise? What do you think the promise consists of? I think you are projecting a promise where you want one to be, but nobody is actually under the impression it exists.
Neither employers and employees are under the impression jobs are for life. If you're concern is primarily honesty and promise, would this piece satisfied by a written declaration and acknowledgment that the duration of employment is not indefinite and can change based on the arbitrary whims of the employer?
If you remove the corporate veil, what do you think the promise is for one human hiring another, and the ethical requirements. If I hire a housekeeper or babysitter, what am I committing to?
I dont see how corporations are held to anything but a higher expectation than individuals, not lower. Can you expand on this?
Huh? A promise to keep people employed? If it's not in the contract, it hasn't been promised. You're fan-fictioning a promise that was never made to manufacture an ethical issue that's not actually real.
If the contract says you'll get 60 days notice and you don't, that is a broken promise (and an actionable breach of contract). Firing someone you hired is not a broken promise. You don't have to be a Milton Friedman disciple to refrain from gaslighting about employment being a promise to keep people employed forever.
>A promise to keep people employed?
It's called the "social contract". You do good work and make me money, I keep you around and let you keep doing good work. It's equally a cynical and fair interpretation of a company.
This was broken long ago, so I understand it being a foreign concept, but it's something my grandparents told me about when giving me my bootstraps to pick myself up with. Now it doesn't matter how much you make them because you can't outpay their ability to save on tax breaks or make funny monopoly number go up. So we're all doomed.
>Firing someone you hired is not a broken promise.
depends on the contract and laws around it. This is far from universal unlike the social contract described above.
> It's called the "social contract". You do good work and make me money, I keep you around and let you keep doing good work. It's equally a cynical and fair interpretation of a company.
If it's more profitable not to fire someone, because they're making the company money on net — given a big picture perspective — then they don't get laid off. There's no profit in laying off workers who are making the company more than they cost.
Where workers often miss perspective on this is in looking only at the smaller picture. Things can be making money in the small picture while not being profitable in the big picture, e.g. Kodak's film production operations before the rise of digital photography. If the business needs to be building digital cameras and the capital needed to do that is currently tied up in traditional film, the fact that employees working on film production may be profitable on net given the current capital allocation doesn't mean they're profitable in the big picture. And it's often a very, very good thing for society when a company in that position lays off a bunch of people and reallocates that capital, as it would have been with Kodak had they fully committed to digital earlier.
>There's no profit in laying off workers who are making the company more than they cost.
Yeah there are. If a worker is paid $100k, makes 1M for the company, but you have a 20M dollar tax incentive to bring people back to office: it doesn't matter if that worker is a 10x-er. It is more profitable to tank your productivity so you get a cushy tax break if that worker can't/doesn't want to RTO.
That was my core point on this "social contract" being broken. Companies are more interested in finding loopholes to save money than ways to make their products more attractive and grow other revenue sectors. There are a dozen more examples of this. It's not that they aren't productive, it's that the company found non-labor ways to make or save money.
>Where workers often miss perspective on this is in looking only at the smaller picture. Things can be making money in the small picture while not being profitable in the big picture,
And it's where companies miss when they look at next quarters earnings call instead of years later. Boieng is reaping it's rewards from over a decade of doing this. You can't screw over your employees and degrade quality to a point of costing lives and then suddenly wonder where it all went wrong.
why do you think these people are making the company money? The CEO and stockholders all seem to think the company will make more money without them then with them?
> The entire notion of corporate amorality is a thin veil that people use to hide their own unethical and immoral behavior.
Do you believe there is no such thing as an ethical layoff?
No, but that specific sentence you're quoting is targeting a very specific bit of business ethics teaching that I find great issue with. IME no one making decisions like layoffs really believes in the amorality of corporate decisions, except the morally bankrupt. You don't find solace in the idea that a company only exists to make money when you're telling a father whose kids are about to start college that he needs to look for a new job.
Ok but you brought it up. I didn’t say anyone should be finding solace in anything. Or even mention ethics. You’re replying to something I didn’t say.
There are. This isn't one.
Ah I misunderstood. I thought the comment I replied to was speaking generally.
> Performance based compensation is absolutely standard for CEOs- Both in terms of options and stock grants.
Yes but you’re still making $1.5M after a 34% haircut. That seems like a reward, and not any real sense of taking responsibility when you have to let go 1 in 5. Wouldn’t it be better if he just got a base salary of 200K or something and no stocks for that year? He already has a bunch of equity and if he does well at the end of the year, that equity will be worth more anyway.
In what sense do you think it would be better? Would it advance CEO performance or the company? Would it bring the world more into alignment with some sense of moral justice?
It certainly would be some real accountability. They didn’t perform well and they’re mostly compensated in equity, so they get less of it. When they perform better, they’ll get more equity. Why wouldn’t this encourages the CEO perform better? The sword cuts both ways.
You are describing how the world already works. The only difference is base pay. Why do you think lower base pay is better accountability and performance? They already have millions on the line. I imagine better base pay means better candidates.
>Why do you think lower base pay is better accountability and performance?
it really doesn't matter. Because you don't just apply on linkedin and get interviewed for a CEO position like this. You're already a millionaire if you're being considered for a million dollar position. It can be charity work and I wouldn't care because you probably accrue money passively anyway.
>They already have millions on the line.
and if they fail they have millions left. oh no!
the outcome can be equal but the opportunity never was. And it's a real shame people with these safety nets actively work to erode the pittance of safety nets he government gives to people who make less than them in their careers than they do in a few months.
And who sets the standards? Their CEO-buddies on the boards. None of them would dare rock the boat.
One of the failure modes of 401ks and investment funds are large investment pools that don't vote at AGMs, leaving boards largely dominated by CxOs, to their own devices.
Either you dont understand my point, or I dont understand yours.
Im saying CEOs have financial skin in the game tied to company performance. They get less, often much less when the company shits the bed. This was in response to a parent post that seems to think CEO comp is entirely isolated from performance.
You probably didn't understand my point. You said CEOs are paid that way because it's the standard. In your opinion, who sets the standards for CEO compensation, and what are their day-jobs? The majority of boardmembers happen to be C-suite executives themselves.
My thesis is that the boards of public companies have been captured by the executives, and the diffuse shareholding has been ineffective in providing oversight to the boards at AGMs. If SWE (or teacher) remuneration were determined by a (nominally independent) subcommittee dominated by other SWEs (or teachers), I posit that incomes for that role would outstrip other roles at the same organization over multiple decades, due to biases and knowing who butters their bread. It would become standard practice, naturally.
Okay, I think we are both misunderstanding then. My original point was a fairly mundane one. Pixel was asking why CEOs don't suffer substantial financial cost for bad performance. My point was simply that they do! Poor performance often incurs millions of dollars of opportunity costs to CEOs. I suspect that the deeper question was why don't CEO suffer more than just opportunity cost, in harsher way that would be more emotionally satisfying.
You raise good questions about how prevailing compensation is set and the relative power of corporate governance. I tend to agree that executives have a lot of leverage and it seems like boards are relatively weak. They don't have a lot of incentive to pinch pennies push back on CEO compensation. There's a pretty huge cost to shareholders if they want to fire or even replace a CEO, and uncertain upside.
There might be some class/roll solidarity going on as you propose. However, I think the bigger factor is that minimizing CEO comp simply is not a priority for boards and shareholders, despite the attention it gets from outside critics.
Held responsible for what? The what part is written in contract for execs, movie stars, sport persons. I have not seen in any category people not getting paid per their contract for poor performance.
The ones out of job can join a different company, america’s unemployment rate especially in the tech sector tends to be low.
Them doing layoffs doesnt mean the people become destitute.
It is better to layoff people who are not adding value to a company, so that those newly unemployed folks can join a different company and build great products and add more value to the economy.
Ofcourse this only applies to US tech sector where hiring is tight. Especially when coming out of top tier companies like dropbox on your resume.
I don’t think its that dramatic, folks who tend to hold similar ideologies like you state, tend to not even bat a single eye, when average americans who lack the privilege of a tech worker lose their job to automation (with tech) or outsourcing or due to overburdened climate regulations and redtape leading to fewer factory jobs in America.
This is not the titanic, those people will move on to places where they’ll have a chance for promotion.
Whenever people are laid off where you work, I suppose you always volunteer to take their place? Since according to you it's only such a minor inconvenience I think it would be hypocritical of you to not to offer to take their place.
Grandparent is not even saying that it should be avoided, just that the CEO should face some accountability from it. In many cases they have none at all, whereas the impact on the employees can range from actually quite low (as in your example) to very high. In fact there is no upper ceiling to impact to the worker which is the real problem. From the horror stories I've heard about the US they could even lose health insurance and end up with someone in the family dying because they can't afford treatment. Accountability is good precisely when there are such asymmetrical power imbalances, where one person makes the decision and someone else bears all the consequences. Either you add some feedback loops or the imbalance grows unchecked until it becomes unsustainable, and eventually you end up with a war of independence, or a French revolution and things like that.
With just a bit of empathy it should be easy to understand why accountability is needed in such situations to keep a good social dynamic long term. Someone with the empathy of a river boulder might think it's just people behaving irrationally, but I suggest you look into game theory and you'll see how some seemingly irrational behaviours like tit-for-tat are not as irrational as they seem.
>The ones out of job can join a different company, america’s unemployment rate especially in the tech sector tends to be low.
>Ofcourse this only applies to US tech sector where hiring is tight.
So, which is it? Will we move on or wont we?
>tend to not even bat a single eye, when average americans who lack the privilege of a tech worker lose their job to automation (with tech) or outsourcing
They keep trying to re-outsource tech every decade and we're in another wave. Why would I not be batting all my eyes at outsourcing?
> Often that person's leadership wasn't the problem, but even when it was, that doesn't necessarily mean that the company will be better-off without them
How convenient (for them)! When the company is doing well, they get millions in bonuses because their irreplaceable leadership skills - which make them 2000x more valuable than the least paid worker - were instrumental to the organization's success.
When the chips are down, it wasn't their fault per se, and the company still would be allegedly worse off without them, so laying-off waves of those who don't have decision-making power is the correct remedy, until the good times roll again, and senior leadership is ready to claim responsibility.
It must be nice to claim "macro-economic headwinds" as justification for poor performance and poor planning, but still get paid bonuses for the never-mentioned "macro-economic tailwinds"
> must be nice to claim "macro-economic headwinds" as justification for poor performance and poor planning, but still get paid bonuses for the never-mentioned "macro-economic tailwinds"
What would you do if you owned a business? Fire leadership every time they make a wrong call? Or ban them from admitting they made a wrong call?
>What would you do if you owned a business?
- Find the issues, the ACTUAL issues. not "the stockholders are unhappy" issues. Not the "we overhired" issues. tangible issues hurting my bottom line. Economic head/tailwins is not a tangible issue for anything (let alone performance related) so much as a means to adjust projected earnings.
- Make an action plan, give tangible, reasonable goals. Not speculation on what appeals to monopoly money. We're a software company; if we can't collect internal data, how are we handling client data with any integrity.
- If anyone in leadership acted maliciously, they are gone. Full stop. Others are corrected. I can correct ignorance or incompetency. I won't stand deception and trickery among what should all be an aligned company with aligned goals.
(note, I won't codify a need to "fire someone" everytime a mistake is made either. a mistake is a managerial failing at best and a company failing at worst. Operate in a “a rising tide lifts all boats” mentality, not blame culture)
- if action plans and projected revenues look dire and we absolutely need to, introduce cuts. Try to cut my (assuming I'm earning anything) salaries first, then other execs. If absolutely necessary after they, we do layoff rounds. Ideally this should not happen because I have a proper savings chest for the worst times, but I'm not 100% opposed to layoffs as a last resort.
now of course, all this is unnecessary because dropbox is in fact not at the point where any of this is needed. Except maybe for Monopoly money. But yes, I have thought quite a bit about this scenario. And I still know this is still a shallow exercise since I'm missing tons of looholes and other scenarios.
If I owned a controlling stake in a business, I'd fire the leadership every time there's evidence of short-term thinking. The problem with public companies is systemic: a large fraction of shareholders want short term appreciation, and so they support and reward short-term mindsets in leaders at the cost of long-term value.
> I'd fire the leadership every time there's evidence of short-term thinking
Have you owned a business? Worked for a manager who thought like this? You’re describing the sort of mercurial boss who fires people for disagreeing with them.
There's nothing mercurial about firing someone over poor strategic planning. Before you hire someone, you communicate the expectations of the job, amd if an executive prioritizes quick ones over long term big wins, that is a fundamental misalignment in values - not a spur-of-the-moment dismissal.
> Before you hire someone, you communicate the expectations of the job, amd if an executive prioritizes quick ones over long term big wins, that is a fundamental misalignment in values
Right, this is micromanaging leadership. You're looking for a manager to execute your vision. Not a leader. Short termism is a problem. But layoffs aren't proof of short-term thinking. If anything, they're a sign of past exuberant optimism.
If the leadership mistakes lead to the loss of livelihood and healthcare of thousands of employees because of their mistakes, yes, they should be included in the firings, or strongly considered for them - more so than any of the people getting laid off who made no mistakes, except working for a bad leader.
Go start a company already — you’re on YC forums
1. This really shouldn't be advice handily thrown out like "learn how to play guitar". You gotta spend money to make money, and if you're laid off without a plan this is the worst time to spend money.
2. I plan to one day. I very much plan not to rely on a VC for that. The purpose for my company is to not require millions to ship products users want/need and to stay extremely lean. A small team of "full stack" developers, to put it roughly. I should already be in a very solid position by myself before I come to such a crossroad.
3. I will admit I am not this "full stack" dev yet. I will still need some months/years to get to this point myself. So I'm a "student" as of now.
No one is ready. You become ready by just doing it
I agree with you in spirit. In reality, the "I quit my cushy 9-5 job to make my own game" is such a meme in my industry that I want to have a plan B and C for if/when I fail.
And right now I barely have a Plan A.
I have started a company[1], but that's neither here nor there. I vehemently disagree with your insinuation that I couldn't challenge leadership culture had I not.
Founding a company doesn't make one infallible or irreplaceable. Though to be fair, it doesn't feel that way when it's your company though!
1. I will note that this is an incredibly low bar.
You want to be the boss. Start a company. You want someone else to control your employment, work for someone else. It’s simple.
> Often that person's leadership wasn't the problem
What's the basis for this claim? I would rather think often it was the problem. Not absolutely every time, but most times. After all, the C-suite makes the decisions. I can not believe management decisions do not influence the course of a business.
Sure, it's possible that outside circumstances were such that no decision could avoid a bad outcome. But that's a rather unlikely possibility. Most of the time, outcomes depend on decisions. Otherwise businesses would be some headless automatons. And if that was the case, we should not pay execs much at all.
It's an obvious cheat: when times are good - it's all because of the leaders, when times are bad, it's all because of the environment. This is what they claim, but it is not the truth. Again, what's the basis for this claim? Any proof, studies, anything?
I didn't say which track they were on in the problem, just that they're on one of them.
Generally leaders are not going to fire each other.
So sometimes a doomed strategy will be pursued far longer than you'd expect, barring some board or activist intervention.
Some of it is self interest, some of it is hubris.. but also one can easily blame a bad run on some broader economic situation, specific competitor actions, or right strategy with wrong team (so fire the team) .. this works for a while until it doesn't.
Seriously, that severance is awesome. Of all the tech workers struggling, the ones from companies big enough to throw 4+ mo severance packages are not the ones I am worried about. Any smaller company your severance is a pat on the back.
Yep. last time I got laid off, I got paid through that day. nothing else.
Lobby your representative for change. This is something that laws can and should fix.
Not having worker protections is a political choice. It's not something the market or technology will solve.
Many countries have laws that prevent workers getting laid off with no severance. It is a solved problem, but it's inherently a political problem.
This is why people should build a huge ass f-u fund and not look back.
Yes, as soon as you have a regular paycheck you should start building an emergency fund. This should be taught to everyone in high school (or earlier) but we don't do it, among many other "life skills" that we do not teach because they aren't on the state standardized tests.
I had 6 months saved . It's been 13 months. School did not prepare me for the fact that my college degree in STEM could still leave me on the market for an entire caledar year
Yep, this is what I do. Individual responsibility is an unpopular idea these days but the way I look at it, I am the one who is ultimately in charge of my family's wellbeing. That is far too important to entrust to a corporation's generosity or the whims of lawmakers.
I don't think its an unpopular idea. But the fact is, being an employee is a lopsided relationship. You only have one employer but they have many employees. You leave and they still have an army to keep the business going but you get laid off and your income goes to 0. So yeah you can keep some money in the bank but still being without work especially with a family and mortgage, is a terrible spot to be in.
I was responsible and still got punished. What do I do?
In many countries severance package is guaranteed by law.
What happens if there isn't enough money left to fund the legally-required severance? Do the taxpayers pick up the cost?
Same thing that happens when there isn't enough money to pay their taxes. Or their debtors. Or their vendors. Or their payroll.
USA: lol ok but no
Yet, people still vie from all over to work at US companies and we still draw the best talent.
There's also unemployment benefits for US workers.
Haters gonna hate, I guess.
No need to be in US to work for US companies, and still get a nice severance package.
Not everyone is looking forward to US working conditions.
And it leads directly into the US being richer than all but tiny petro-states and growing faster than all of its peers. Fair enough if that's not what you want but there are tradeoffs.
Lets see how much it remains left if US keeps offshoring all the stuff, followed by imposing import bans after those countries become good enough to start taking over economy sectors.
You can certainly work for a US company outside the US, however you will not get a US salary.
It rather work to live than live to work.
>There's also unemployment benefits for US workers.
if you consider a few hundred a week "benefits", sure.
> people still vie from all over to work at US companies and we still draw the best talent.
yes, because like companies, the USD is coasting off of successes from long ago. We corrupted the tech boom, but fell behind on the FEV boom and manufaacturing in general.
USD is great to earn. It's horrible to live in the USD to utilzie it though. That's why companies are trying yet again to outsource.
And all the debt you pile up while struggling to get hired.
The average tech worker really should not have to go into any debt for even a year long hiatus from their typically well paying job. All that is required is living like a typical American and saving your salary. I honestly don't see how anyone can claim tech workers are not compensated for the volatility inherent in the industry.
My cost of living has increased proportionately with my compensation, but also I don't work for any FAANG companies. I would love to work for someone that actually pays well, but typically those companies have ridiculous interview processes. Not all of us went through the standard CS degree pipeline and memorized all those questions. My first job was paying me 35 thousand a year, something most people probably would be surprised about, and I suffered through that for almost four years, the only raise I got was very marginally insignificant. It's not been a fun ride considering this is what I love to do, I know others who do drastically less work than I do and make more income wise.
Your assumption here assumes that
1. all tech jobs pay well. Well enough to expect 1 year+ savings. They don't
2. that we all have the same cost of living or family situation. Even living frugally, supporting a spuose and kid on savings is not trival.
>I honestly don't see how anyone can claim tech workers are not compensated for the volatility inherent in the industry.
Come work in the games industry for a while. 30% more hours, maybe 60% of the pay in a "good studio", and near guaranteed layoffs when the proect ends.
Early-in-career folks are more vulnerable. Even before major family/life costs start to play a role, it can be difficult to save enough for a safety net after moving to an apartment (even w/ roommates) from college & managing student debt, etc. I remember it took me a couple of years of stability to not feel at risk.
Sure, no argument there.
That’s actually a pretty low salary but I just looked up their revenue numbers and it’s not looking that hot. They are also hemorrhaging cash this year. His salary and the performance of the company were probably a good foreshadowing of the layoffs
> His salary and the performance of the company were probably a good foreshadowing of the layoffs
As is standard. My recommendation to anyone that works in a corporate environment is that if you want to know whether the company will be at risk of layoffs in the future, become good friends with someone in sales. When the sales leads and activity start to drop (or growth rate starts to slow), you can usually be assured that layoffs will eventually follow. In my experience the sales folks were always the first to clean up their resumes and start the job hunt because they knew what was coming.
https://blog.dropbox.com/topics/company/a-message-from-drew
Drew is developing a habit. 16% last year
edit: 11% before that: https://dropbox.gcs-web.com/node/8916/html
It's less of a habit and more indication of a matured business.
Their revenue has only been growing ~5% (and slowing to just 1% most recent quarter).
When you aren't growing, you must focus on operation efficiencies.
Rule of 40, now being applied to margin.
I'm not going to believe this "matured business" narrative when the letter itself claims right after that.
>We continue to see softening demand and macro headwinds in our core business.
This isn't a matured business strategy. This is a business predicting a cold winter and trying to bundle itself up. Of course, the less people to warm up the better.
Yea, that's fair. I'm just being critical of the 'facade' (said with less ire than it sounds). The size is no surprise, in or out. I'll be mildly merciful - not all his doing
I still hate the fact that people can borrow money against a stock. Stock should be sold, period. That is how the market sets a price for stock, through the volume of it being sold and bought. By allowing people to borrow against a stock, let's them get the money for the stock while still holding it. That artificially increases the stock price and value.
probably whoever makes the loan will hedge, maybe by shorting the stock. or buying puts, but then whoever sells them the puts will hedge by shorting the stock.
if they decide not to hedge, then it must be because they don't think they're exposed to much risk, which basically means they like the stock and would be willing to own it. it feels like it mostly works out.
Isn't this also the case with mortgages?
> No growth is more or less bad on Wall Street.
In other words, this is to satisfy Wall Street.
If this is "saving the ship", more companies need to remember what a shipwreck is.
> $100K all-in comp (which seems low to me for a tech salary)
ic1 at dropbox is 175k and ic4 is near 500k, ic5 near 700k.
https://www.levels.fyi/companies/dropbox/salaries
Do they really need such highly paid engineers? Are they really doing anything that innovative, new or first on market.
They could probably save these jobs by adjusting the comps.
This is how Musk stripped 80% of twitter. Take that as you may.
Remember that Dropbox (like Twitter) is HQ'd in San Francicso.
Uh, drop box cost per employee is likely closer to $750k, not $100k.
That $1.5M comp package is about 2-4 employees being laid off. It's not very many people.
It's also insanely low for a CEO, but about right for the CEO of a company in decline (which dropbox is).
Why is the CEO's TC relevant to layoffs?
> Drew Houston's total compensation for the year in 2023 was $1.5M
That is insanely low for the CEO of a public company of Dropbox's size. But I suspect he owned a lot of shares in the company so when it went public, so he doesn't need salary, it is just a rounding error in terms of his wealth.
EDIT: Yeah, he is worth $2B according to Forbes: https://www.forbes.com/profile/drew-houston/
I always wonder what gives these people the drive to continue. Maybe I’m lazy and lacking vision but if I were worth 2B, I don’t think I would go to the office every day just to get accused of mismanagement when I have to lay people off. I would take my yacht to the Caribbean and slack off.
People enjoy having a purpose and a mission in life. Leading a team of people that you put together, in order to improve a project you started, and knowing that doing so will improve both your lives and theirs, is incredibly fulfilling. Even if the day-to-day is full of hardships. In fact, working to overcome hardship is one of the primary source of meaning in life.
Kids are another example. They're expensive, they're annoying, they ruin your health, they take up your free time, they consume all your resources, and they're inherently needy, selfish, and largely incapable of being grateful. Yet raising kids can be profoundly rewarding and fulfilling, in part because of the hardships, and in part because you're contributing to something bigger than just yourself, which is another crucial ingredient of meaning.
Sitting around on a yacht doing nothing is not so different than moving into your parents' basement and doing nothing, save with better scenery. It's the kind of thing you crave when you're burned out, overworked, and jaded, the same way we crave sleep when we're tired and food when we're hungry. It's a reaction to a state of being. But we only desire sleep until rested and we tire of eating once we're sated.
If you ever get to your tropical yacht vacation you may find that, in much the same way, what you thought was a permanent desire was only a temporary one.
Dreaming of winning the lottery and Going On Permanent Yacht Vacation is precisely the difference between being a worn out low-level worker and being a high-level executive who has all their needs met (or at least has the resources to have them met). With the latter you can have enough resources for you next ten generations and still go to work and optimize shareholder profits while thinking to yourself that you are serving a higher purpose.
you are not wrong, but I don't think that is necessarily a huge criticism.
Criticism? What would be the point in that? Where did I imply that such a personality type can absorb criticism?
criticism isnt always for the benefit of the target.
Are you not critical of that "personality type"? What point are you trying to make?
The average person enjoys villainizing those who they see as somehow "above" them in standing, whether that's social, financial, or otherwise. They are of course incensed when the people "below" them do the same thing.
Type A people who become CEOs don't dream of sitting around on yachts.
Some might be driven by money, but at a certain level it probably switches to a sense of responsibility, but also, it's intoxicating to be at the top where you don't really have to work in the same way, but get to direct what happens. People enjoy power. People enjoy the secrets of what happens at the top. People enjoy the recognition (within their peer group). etc...
One hardly needs $2B to slack off on a boat in the Caribbean… many people do so on surprisingly nice ~30 foot sailboats you can buy with a few months work at minimum wage, and wild seafood is free
I see a lot of people that say “If I won the lottery I’d….” and then describe something they could definitely do without winning the lottery… which makes me think they still would not actually do so if they won
If you win the lottery there's no risk in doing it
Sure there is- opportunity cost, the real dangers and skills required to operate a vessel at sea, etc. You can pay a professional crew to do everything for you, but then you'll probably feel pretty useless, and be looked down upon by the people you meet along your journey that do it themselves.
The sea doesn't care how rich you are, and being a helpless dependent is boring and infantilizing no matter how big your boat - and you don't develop skills without taking risks.
Ultimately, I don't think people are often that conscious of their real goals and motivations. It's easy to say you have no choices in life because of financial and time constraints, but I don't think those are the real reasons most people choose to do or not do things.
Lawrence: Well, what about you now, what would you do [if you had a million dollars]?
Peter: ... Nothing.
Lawrence: Nothing, huh?
Peter: I would relax, I would sit on my ass all day ... I would do nothing.
Lawrence: Well you don’t need a million dollars to do nothing, man.
https://www.youtube.com/watch?v=4lmW2tZP2kU
I don't have billions and I don't manage people (I've been voluntold to manage 1 person a few times, and I'd rather that not happen again), but I have enough that I don't need to work for economic reasons.
I'm working part time anyway, because it keeps me busy and interacting with people outside my home, and it gives me access to interesting real world problems that I can't really access as an individual person on the interwebs. Having other people depend on me to get things done provides motivation to keep moving on things that I can't seem to manage on my personal projects.
If I liked the kind of organizational management work a CEO does and I was good at it, I'd probably get roped into being a CEO.
He breaks it down in this interview, I believe in this section https://youtu.be/KSeraZxSAbQ?t=1350
Ultimately he mentions that being CEO is a rare opportunity to play a more infinite game and practice the craft of getting really good at something that doesn't have an end
Even if he still wants to work, restructuring a second tier post-growth tech company wouldn't be my first choice.
Yeah I figure a long shot deep tech project would be better suited to a billionaire. Little to no accountability for the first decade or so, and loads of glory if it somehow works out.
I can understand wanting to continue doing something. What I don't understand is why instead of putting their time and now considerable wealth into more philanthropic pursuits, they decide to continue increasing their wealth, often at the expense of other, less fortunate people.
People who have mission and vision of the future are entrepreneurs because they want to solve problems and help other people not because they want to become rich and sail with yacht.
Listen to Snapchat's founder and CEO Evan Spiegel[0] why he didn't sell to Facebook for $3 billion. He even didn't sell to Google which offered 10x more ($30bn) for Snapchat.
[0] https://www.youtube.com/watch?v=BVu6M72XWUI
To clarify, I actually kind of get it for businesses that actually have a important mission (using my definition of important of course). If you’re working on curing cancer, I would understand that a CEO doesn’t want to leave even if he’s set for life. I just don’t see entertainment and service businesses like Snapchat or Dropbox as actually meaningful endeavors. To me they are nice to have and something I would work at for money, but I wouldn’t feel like I’m making the world a better place. Maybe that’s exactly the thing I was misunderstanding about those CEOs, they truly think their work is needed and important for the world.
No idea about what big CEOs feel but for me, I would absolutely continue working even if I was a trillionaire someday. What matters and drives me would be impact and influence I could have on society. Have couple billions? Throw them on things I care about and keep getting more to throw at the same.
Some people do exactly that but it's rare that someone will simultaneously have the drive to do something that will generate them billions of dollars and also be willing or able to just stop working at that point.
Also remember once you have that much money a lot of things become basically free, both figuratively ($100,000 to a billionaire is nothing) and literally (comped rooms, gifts, etc for basically every event and your company(ies) end up footing the bill for most of your expenses).
There's plenty of people who make $5-50 million in a windfall and are never heard from again.
True, it’s probably that this drive is what allowed them to be billionaires in the first place.
Just to rant a bit more: the Wordpress situation makes this point even more crazy to me. Mullenweg has about 400m and instead of retiring and enjoying life, he’s arguing with anonymous users on Hacker News. No offense against hacker news but defending my life decisions on HN isn’t exactly the first thing I would do if I could do everything I ever wanted. Like, go buy a plane and take flying lessons, or go scuba diving? Nah, I’d rather justify myself on the internet.
The internet is a direct pipe to every person on earth. You have to acknowledge that this is new territory for humankind.
In fact, internet communication is much closer to dark-age "public square" type communication. Bring your soapbox to the square, talk loudly, gather a crowd, and listen to the crowd jeer or clap. We haven't had that since the industrial revolution pre-1800s (i.e. at the earliest 1700s)
For the forseeable future, we are in a situation where people will "feel" that the most authentic communication is intentionally said in-front of the internet bystanders. So a CEO posting an intimate reply to an individual with billions of people able to see the intimate reply is more "authentic" than everything else.
(Much closer to dark-age communication implies that we are closer to "old" methods of communication that disappeared for the last couple of centuries. We used to have industrial revolution-type communication medium, one-direction broadcast medium.)
I expect a lot of people with that kind of money can't enjoy life as it disconnects them from everyone else. Your friends can't afford to do those things with you, so you either end up buying friends – with all the disillusionment that goes with that – or you turn away from people and get your fix trolling computers instead.
hey gotta do something on the toilet
I have a slightly different version of this. There are some other replies here to the effect of "people like to have a purpose in life". But surely "helping people share files" or whatever the Dropbox "mission" is can't be that inspiring, right? I mean, the point of starting a company like that is to make those billions. Maybe to do it successfully you need to delude yourself into thinking that mission is really important, I don't know.
But for me, if I had that kind of business success I'd cash out and go do something that feels actually important. Go get a PhD and take a crack at curing some obscure disease, or setting up a Dyson swarm around the sun, or making a great work of art, or thinking about how to improve elementary education a la Khan Academy; something like that. Then you get to have a real purpose and work toward something that most people don't just by virtue of the fact that it doesn't pay well enough, and you still get to spend plenty of time on your yacht!
The instinct to acquire resources does not have a limit. When homo sapiens evolved, such a limit would not have been a useful adaptation. There were no billionaires then.
Also it's nice to boss people around, probably for the same reason.
You and lots of people say would do something or other. I submit that it's different when you're actually in that position, as opposed to imagining it. Lots of us imagine we're going to go to the gym for years, and give up after a month or two.
Some people have made the (good in my opinion) point that this is actually survivorship bias and a lot of people actually do retire and are never heard from again once they have enough money. So people predicting what they would do aren’t necessarily that wrong, it seems that some people actually do that.
Yeah but if you were worth $10m, $100m, $250m, would you take it easy? If you would, then you wouldn’t get to $2b.
I got from the other comments that he got the 2B by owning part of the now very valuable company, not by working for a salary. Assuming he picked a good enough successor that didn’t completely ruin Dropbox, he should still have pretty much the same net worth without any work, no?
Your presumption is that it's about the money for everyone.
But there's a lot more at play when you are rich enough to not worry about money.
Because it's fun? Honestly after two days of vacation, I'm about ready to do something
It’s not “ridiculously low.” Before the layoff they were 2700 people. That’s like a VP2 at most large tech companies and 1.5M total comp is spot on for that level.
I think even the Mozilla CEO made more … I looked it up as I wrote this.
Nope … the Mozilla CEO makes 6.9M a year which is insane.
In comparison Drew is underpaid by a factor of 50 or more.
Nope, MBAs have to learn exponential growth is impossible to accomplish forever.
Companies should be managed to be profitable, while paying employees and business expenses.
Anything other is a pipe dream that eventually blows up, but since only employees suffer while the MBA guys go to become CEO of yet another adventure, who cares. /s
The myth of exponential growth is not that companies can't grow exponentially forever (since that's the case for most companies) but rather that the valuation of these companies depends on exponential growth (it does not). Most public companies in the United states do not experience the exponential growth many tech startups do, but do perfectly well for themselves, their customers, and their employees.
No one is pushing for exponential growth. If a company wants to stop, declare a dividend, and be done with it, and let investors choose a new rodeo.
Except that isn't what happens, instead every year a new goal that has to be X % higher is set, and when expectations are not met, the employees are the ones landing on the street for stupid values of X%.
The one signing off on X% might even get a bonus for doing that, and enjoy some Bahamas vacations.
In tech sure, but in the market, many companies simply return dividends. Lots of mining stocks, retailers, commodity producers, etc don't experience exponential growth
indeed. but tech gets some new boom every 3 years and that's why no company worth their salt is going to settle on dividends. It's still growing fast, so companies expect fast growth. Even in the recession they don't want to pretend exists but knows exists.
In this case we're talking about tech sector anyway.
I have an MBA and am not a CEO. I'm probably better at developing software than you, too.
But, I do get a chuckle out of what you believe is a "diss," when you're actually stating that MBA holders will not only do better in life, but they'll also control your fate.
Keep that narrative alive; I love it!
"But, I do get a chuckle out of what you believe is a "diss," when you're actually stating that MBA holders will not only do better in life, but they'll also control your fate."
This doesn't mean it is not a diss - most parasites fare quite well, and definitely determine fates of their hosts.
>when you're actually stating that MBA holders will not only do better in life, but they'll also control your fate.
Not if I can help it. America is doomed but I can scavenge out my own little hole to settle in and see if that survives the fallout.
If there's one thing I learned, it's that tech has an amazing ability of scale that can even topple titans if you strike at the right time and place. You won't make trillions, but you can live very comfortably. And that's all I want; I don't need infinite money and exponential growth. And if I do get a company that achieves that I will keep it that way. a proper business, not a speculative stock to gamble with.
It means absolutely nothing to you, but you're the exact kind of person I'd avoid in my company at all costs. Our goals diverge too much, and that's not a bad thing. Comapnies need to have proper alignment to succeed.
Like all rules there are exceptions, and I am old enough to remember when management was battled earned from the trenches, not people thinking they could manage any random company.
It is like assuming generals can win wars straight into the battlefield after graduation from military school.
Some get lucky, most of them do not, then again the little soldiers are the ones thar have to worry with the actual outcome.
Good that you're having fun.
Public company CEO pay is almost always paid by shareholders not by the company itself.
It's so misleading that these "CEO compensation is 100x employee pay" stats always get kicked around like it is an apples to apples comparison. It's not.
CEO's get paid in stock which they need to redeem from shareholders. Employees get paid with cash which them redeem from the company's checking account. They are different sources of money.
It's so annoying that this keeps getting repeated, on and on and on. It's totally disingenuous.
The company's checking account also belongs to the shareholders, albeit indirectly.
The remarkable thing is how readily shareholders will accept narratives which give the CEO very large amounts of compensation. The notorious $50bn is a high mark: https://www.forbes.com/sites/antoniopequenoiv/2024/06/13/tes... - but that is very much taking value away from shareholders and handing it to the CEO in huge amounts.
It doesn't indirectly belong to share holders, it directly does.
But that doesn't change the fact that employee's are paid with money that is generated by the business itself. Stock compensation comes from the wallets of shareholders and is totally disconnected from the operations of the company (although generally proportionate).
Yes, but we can all agree that stock/$ is pretty fungible and can be exchanged for goods and services in pretty much the same way. So effectively, it is apples to apples.
Stock/cash is not fungible for the company itself. Using shareholders as an ATM is a surefire way to tank a stock, and companies tend to use it as an absolute last resort.
We aren’t talking in the context of the company though. The gp comment said it’s not an apples to apples comparison to say a CEO makes 100x an employee because CEO’s compensation is stock.
If the CEO’s stock compensation has a monetary value of $100 and the employees salary is $1, it absolutely is fair to say the CEO is compensated 100x the employee, regardless of it is stock or cash. The CEO can borrow against this and use it as effectively cash, if they are unable or do not want to exercise the options. This is such an insanely common practice and absurdly pedantic argument that I wonder why we’re even having it. Does the distinction matter? Of course it does not.
It's not apples to apples because it is in essence two different employers. The CEO does not work for the company (this why you see that $1 CEO salary so often), the CEO works for the shareholders. But the employees work for the company. They are two distinct entities with two distinct finances.
If a company does layoffs and the CEO still gets paid, that is perfectly logical because the company was never paying the CEO in the first place. Whether or not the CEO got his $5 million compensation package has no impact on whether or not the company could have laid people off, as just about everyone portrays it (and thinks how it is).
Can pretty quickly see that the CEO comp # in question is not the stock. Houston sold many times more than $1.5m in stock in 2023. The $1.5m is likely direct cash and services.
He owned a huge amount of dropbox before it went public. $1.5M is the money from the company to him (likely including stock compensation).
> Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship.
But they always fire the weak employees, not the ones that can easily help themselves.
Maybe we should have some laws that randomize the layoffs ...
they always fire the weak employees
This is definitely not the case. Companies use a lot of different mechanisms to choose who to lay off, and it's rarely entirely performance based.
Arguably from what I've seen it is TOO random or non-performance based.
Some combination of personal dislike and unfamiliarity.
The people making the cuts are not line managers and are sometimes given very short amount of time to make their cut list. So "oh I know that person" stays vs "I have no idea what they do / they asked me a pointed question in a meeting once" goes.
I've been laid off twice, neither time has been performance based.
once i was on a team of 2 ICs and a Manager - only the manager stayed - the company is now about to fold. Other time i was let go as part of the entire US arm
Yes, most layoffs I've seen in my career are of the "mass layoff" variety, and these are generally far from being performance based.
There's just too many people, the decision making is too quick, at too high a level.. and more driven by cost / future strategy (so which teams to cut deeper).
When layoffs are random, it engenders a profound sense of betrayal among those who have diligently gone the extra mile. It severs ties and creates a chilling effect, dampening the morale of those who remain.
Employees, acutely aware that their efforts might be disregarded in the next round of cuts, become increasingly disincentivized to exceed expectations. The result is a workforce more focused on survival than excellence, fostering an environment where mediocrity thrives.
Why would you fire your best and brightest? That would be like throwing out good fruit, when there are spoiled ones.
No, it's a very poor idea to force companies to lay off at random.
>That would be like throwing out good fruit, when there are spoiled ones.
Have you seen the industry lately? They don't care unless they have leadership who actually has tech experience. The company will float long enough for the next executive to worry about the consequences.
To put it more charitably: They may want to care but there's too much beuracracy to holistically figure out performance, and the stats measured are horrible 99% of the time anyway. So yeah, it all comes down to "vibes". Which is probably worse than random for tech workers. They won't feel short term consequences, so it's not a big deal for them if they lose a few "best and brightest" (they will probably leave after the layoff announcements anyway).
We should start with the executives who didn't perform/execute, they're the biggest liability.
This often does happen along with layoffs when a company is in real trouble. A problem of silicon valley culture is that you basically can't fire anyone for underperformance, so you need to have these sorts of layoffs as a prophylactic measure to cull the heard. So that means you get a cycle of "overhiring" followed by "layoffs" and that is working exactly as intended.
California is at will, you can fire anyone for anything or even nothing. I'm yet to see poor performing executives take themselves out before they take out the people that actually create value. You don't need to have layoffs, you need better leaders, and they're the last ones to get culled, usually running off with bonuses for under-performance and lousy work.
Legally yes, culturally no.
In certain cultures its okay to hurt people and not face repercussions. We typically refer to those cultures as underdeveloped.
Why is firing someone hurting them when it's not working out? Both the company and the person would be better off doing something else.
We have attached shame and this idea that it is "hurtful" likely because it is so rare. At a place like a hedge fund, firing the bottom 10% of people is relatively normal, so being fired can sometimes just mean "you had a bad 6 months" not "you am a terrible person who does not deserve to work anywhere" (which seems to be how tech people and Europeans think of it). In that environment, there isn't any shame involved in the firing and everyone gets on with their lives (usually including a cushy severance package).
The executive failed to ensure profitability which is their entire focus. They are the ones that should be laid off first. You're giving them a pass which is literally the crux of the problem, these people are allowed to fail up at others expense. I'm talking about the dropbox layoffs, you're talking about just cause termination which is again completely meaningless in California.
I am telling you that "layoffs" are the mechanism by which silicon valley makes just cause termination culturally acceptable. If a silicon valley firm decided to fire the bottom 5%, they would lose huge amounts of talent that doesn't want to work in a "competitive" environment. If the bottom 10-20% happen to get "laid off" every 3 years, that's just an "unfortunate oversight" and a "management oops" that they take "full responsibility" for.
These layoffs do not generally happen when executives and companies fail; they happen as a matter of course. They are, of course, accompanied by rhetoric about executive failure (again, a cultural cover), but nothing more. When executives actually fail, executives get fired.
I'm telling you I disagree and I think your explanation is rather comical. Dropbox's slow growth in 2023 and 2024 is directly tied to an under performing executive team. Executive accountability is mostly gone and you're doing a great job furthering my point by trying your hardest to explain why poor leadership is culturally acceptable.
How is Dropbox's poor performance tied specifically to a poor executive team? The end of ZIRP and a bad core product are likely more to blame. This was likely the end of dropbox no matter what the execs did.
Also, can you explain the layoffs at Google this way? The layoffs at Meta? Microsoft? TikTok? Are all of these the result of underperforming executive teams? Are they even related at all to business trouble?
Or is it perhaps something closer to what I am suggesting?
Layoffs happen in waves at these companies. It really has nothing to do with performance. They do it every time they can, and the best explanation for that is that they are trimming the fat. Companies all say "we hit hard times" when they do this, but most of them really didn't. The issues with Dropbox's core business have likely been foreseen for 5-10 years.
How is it not? They're steering the ship. They're in charge, they're the decision makers. If the company is failing, how could it not be the executives problem?
We used to live in an age where leadership meant something, when people took responsibility for their failures. Now executives make excuses, they even have people like you making excuses for them, and instead of forgoing a bonus or handing over the reigns to more qualified team, they play with peoples livelihoods and you think that's perfectly acceptable, even called it cultural.
Anyway, given the age we live in, I'm not surprised at all to see people kissing their asses.
>The end of ZIRP and a bad core product are likely more to blame. This was likely the end of dropbox no matter what the execs did.
Yeah, but we'll blame the workers anyway for "underperforming". nevermind that the only real change was that they got harder to get tax breaks on.
>Are they even related at all to business trouble?
I kinda agree with you, but also: yes they all had business troubles. Meta fumbles with VR hard and shuttered its in-house VR studio that otherwise put out well acclamed games. Microsoft is on shakey ground with OpenAI and their Xbox division is fumbling from the worst time to spend $70m on an aquisition. Tiktok may or may not be banned from the Unites States and that will take a hit (this one isn't really their fault, but alas).
>Why is firing someone hurting them when it's not working out?
"Not working out" is doing a Herculean amount of lifting. In this case, "not working out" is "we want to make earnings calls look better and do more work with less people". Yes, you are hurting everyone in your company by doing that.
>We have attached shame and this idea that it is "hurtful" likely because it is so rare
Yes. I'd really hope that the singular good thing from this 5,6,8 round interview cycle for hiring that you somehow didn't hire someone who managed to underperform on the job. Maybe I'd even agree with you about firing culture if I believed for a second that it meant they'd be more lax in the 4 month interview process and do more probation trials.
But that's just hopes and dreams for now.
>At a place like a hedge fund, firing the bottom 10% of people is relatively normal, so being fired can sometimes just mean "you had a bad 6 months" not "you am a terrible person who does not deserve to work anywhere" (which seems to be how tech people and Europeans think of it)
Again, tell that to the recruiters. You're seeing it among peers, but there's a lot of stigma that if you got laid off you must have been "one of the bad ones". It's absolutely not true, but with so much fascination on "why did you leave your job" you can see how people really feel.
>there isn't any shame involved in the firing and everyone gets on with their lives (usually including a cushy severance package).
Yeah, I wish. Not all tech companies are created equally. Mind you I hate stack ranking, but if you're going to something as fast paced as a hedge fund, those 6 months will pay you well. So you're rolling the dice youself there.
> Again, tell that to the recruiters. You're seeing it among peers, but there's a lot of stigma that if you got laid off you must have been "one of the bad ones". It's absolutely not true, but with so much fascination on "why did you leave your job" you can see how people really feel.
Yeah, I agree with you that this is mostly on the risk-aversion of recruiters. There seems to have been this vicious cycle of firing being harder and more stigmatized combined with companies being more picky when they hire. Nobody really benefits from this, though.
>But they always fire the weak employees
What you are referring to is called rightsizing and it's taught in business schools, but almost never implemented well. I would guess it's because it takes to long to figure out who's weak and who's not and they are in a hurry to cut costs.
This is a joke, right? If a company is underperforming, then the underperformers are the first to go. Market economies require efficiency. Capital flows in the direction of success. Impeding this flow with regulation is a great way to create a malfunctioning economy.
I’ve seen instances where the people with the most seniority are let go first because they cost the company more.
Nope. it REALLY depends. Sometimes underperformers are focused on. Sometimes worst ratio of performance to pay is focused on. Sometimes it's random if lawsuits are a worry (AKA they want to layoff the older workers but need to shuffle in some others so it isn't suspicious). Sometimes it's purely vibes for who's picking who to be laid off.
There's no consistent layoff strategy. Especially not in times like this.
> Impeding this flow with regulation is a great way to create a malfunctioning economy.
yup, and look where we are heading next year...
Isn't firing the weak employees the correct long term strategy? Especially with regards to ensuring that the remaining employees stay employed
Im not sure if you are sarcastic or not.
If not, I think you have a highly unrealistic opinion of who the company operates for.
The severance packages suck.
COBRA is the single largest expense for departing employees. Industry standard is to offer 18 months, not 6.
Many job searches take longer than 6 months, so employees will be left high and dry right when they need it most.
> COBRA is the single largest expense for departing employees. Industry standard is to offer 18 months, not 6.
Are we in the same industry, where are you based? I got 2 months when I was laid off last year.
I also know many tech people who got just 1 month.
Agreed. "Industry standard is to offer 18 months"!! Please let me know this industry, because it ain't tech where I live!
It's not any industry anywhere. Any layoff thread on HN is people saying what they wish things were but framing it as "this is how everyone else does it this one company is being greedy" when it's not the case 99% of the time.
> COBRA is the single largest expense for departing employees.
Life pro tip: Do not use COBRA!!!!! It is almost always much, much cheaper to find an ACA compliant healthcare plan on your state's health insurance market. For one thing the plans will often be cheaper (though with fewer features). For another ACA plans qualify for tax credits, etc and COBRA doesn't.
When I got laid off I made one of the worst financial mistakes of my life keeping my employer's high-deductible plan via COBRA. I stupidly figured it had to somehow still work out to be cheaper than shopping for private insurance. Boy was I wrong! Between the "high deductible" part and the fact the plan wasn't able to qualify for tax credits I overpaid my medical expenses by about $10,000 over the course of a year. Had I gone with even a "bronze" level ACA compliant plan that would have been cash in my pocket that would have helped out a lot while I was looking for work.
The big reason was my medication was like $800/mo. And on my employer's plan once I hit my $3500 deductible it went to $0/mo. This wasn't a problem when my former employer picked up most of the insurance premium for my high deductible plan but with COBRA you are paying the entire premium! And for my use case, medication was my top medical expense so I was paying a hefty premium for a fancy health plan that didn't actually cover my expenses.
A "regular deductible" ACA plan would have made much more sense in my unemployed scenario as the premium was not only lower but the medication was generic and would have only been like a $23 copay!
Always, always bust out Excel and compare the full cost of healthcare on different plans. Compute the total cost of your medications, how & when you'll hit things like your deductible, what tax credits & deductions apply, etc. What made rational financial sense while employed might not make sense when unemployed or buying your own health plan. But you have to find out for yourself. Rarely does it make sense to continue paying your employers health plan via COBRA. After loosing your job you have like a 30 day window to switch plans before you will be locked into your COBRA plan for the remainder of the year -- do not dilly dally around, figure it out now!
Forget ACA compliant health plans. When I was laid off, since my income / week was $0 (Oregon), we just got medicaid for my kids, and pregnant wife, and I paid an extremely modest amount for a solid plan. There is no reason to use COBRA. It's a relic and probably should be done away with.
> It's a relic and probably should be done away with.
This is the conclusion I came away with as well. It made sense back before there was the public health insurance marketplace.
...but I tell you what there was nobody out there who told me "hey, revisit your health insurance" and it cost me a non-trivial amount of real money to learn that lesson!
Please look at your individual situation and don't take this suggestion blindly. If you've already contributed significantly to your deductible or out-of-pocket maximum it can definitely make sense to continue with COBRA.
Also you can game the COBRA enrollment window. You have 60 days from your loss of coverage to elect COBRA and once you elect COBRA you have another 45 days to submit payment. You can elect on the 59th/60th day and then pay 45 days later if you ended up needing the coverage. If you don't need the coverage don't pay.
> Please look at your individual situation and don't take this suggestion blindly.
Exactly. The message here is it is incredibly important to re-evaluate your healthcare plan. Every household is going to be different! Bust out excel and crunch the numbers.
COBRA can be good if you are on a platinum plan and have a lot of foreseeable health expenses. HDHP COBRA makes no sense at all.
Please check though, because my kids qualified for medicaid despite my six-figure income. The state of Oregon qualifies by week, so even if you made $10 million / year, if your expected income in the week is $0, you qualify for that week (yes, I literally asked them this question, and he said yes, that is how it works). According to our DHS, there is no upper limit on yearly income that would mandate a clawback of benefits received[1] . And in Oregon at least, OHP is accepted everywhere, and is usually better than the platinum plans (no payments taken from users, ever)
[1] As another example, I asked if I didn't work Jan - Nov, and then made $10 million in December, would my kids qualify for mediacid Jan - Nov, and he said yes.
That is interesting to know, and does seem to be true if that $10 million is the lottery and is truly random income and is truly instantaneous. If you are working on a company that you sell, it may not be the case.
that is not what I was told. I bluntly pointed out that I expected to make good money that year despite being laid off (and I did), and he said it did not matter, since I was unemployed, my expectation for the current week was zero. It has nothing to do with whether you have a lotto ticket or a company exit.
Although obviously if you're working at your company, you are not unemployed and do not have zero income expectation.
My advice is to simply go on Medicaid.
When I was laid off in 2023, my mom and aunt told me to go on Medicaid. I thought it was a bit ridiculous since I had already made well above the poverty line, and was planning on still pulling in a substantial amount in the same year despite the lay off (I was laid off in January). I was going to pay several thousand a month for COBRA, and I thought my mom and aunt were crazy, since they are the sort to claim everyone's using welfare (my aunt retired early and is on medicaid, since her income is zero, so I guess she has some evidence to support her claim).
Anyway, so I did look into it mainly for the 'I told you so' aspect, to 'prove' to her that the social safety net did not exist as she imagined it.
However, to my surprise, it did, and within an hour of filling in the form online, I got free medicaid for my kids, and highly subsidized marketplace plans for my wife and I. In my state, medicaid eligibility is based on expected income / week. According to the man on the line from the state, even if I did end up making more, since my expected income was $0 (being unemployed), I still qualified! My wife's premium / month was like $100 (she was pregnant so qualified for more).
I did tell several colleagues about this, but they didn't believe me and forked over thousands of dollars.
In my state, medicaid is superior to my old PPO plan. For one, there is no co-pay and my daughter ended up needing major orthopedic intervention (severed finger) and we paid $0 out of a total cost of $150k. Although you're assigned a doctor, it's still essentially a PPO plan (you can see whomever you want whenever you wanted, so we stuck with our old doctors).
So, please avail yourself of the very safety net you pay for. COBRA is basically always a bad deal. There is almost certainly a subsidized plan out there for you. There's a pervasive myth that the social safety net doesn't exist in the USA and I almost lost $10k (or more with my daughter's incident) because I didn't do the obvious. I also learned that should I ever want to leave my job to start a business, I honestly really don't need to worry about health insurance.
i wish they would focus on what the users wants instead of making their client more and more invasive, and when I complain about it just explaining that they have a lot of privacy controls and I shouldn’t worry about their invasive client.
i would love to use dropbox over icloud, but I just want a drive that works and a way to turn off all their weird features.
Kind of surprising to me, because I think I've tried every large competitor in the space, and have found there to be a gulf between the Dropbox UX and everyone else. I'm more than willing to pay their premium price. I was hoping Proton Drive would compete, but I felt like I was beta testing an inferior product.
I guess Wu Tang was right.
Anecdotal: I know a lot of people who use Dropbox, I don't know even one person who pays it. They pay for iCloud, probably cause it makes the iPhone experience even more convenient, but not Dropbox. I also don't pay for it.
Yeah, that makes sense. If I wasn't a PC user, I'd probably be utilizing iCloud as well.
Anecdotally, having been in client services, I saw Dropbox use plummet on both the client and agency side once the pandemic hit. People switched from syncing files to working directly on the same document in the cloud (e.g. Microsoft Word -> Google Docs, Keynote -> Google Slides, Sketch -> Figma)
In 2024, I wouldn't invest in any company that's based on "Files"
The premium experience does have a heavy price tag attached to it since they repeatedly increased the pricing. In the UK, the first plan is now £7.99 / month.
This eventually led me away from Dropbox and I am now an iCloud user - the convenience and cheap prices eventually convinced me, even though I wish a Linux client existed.
Can you share more about your experience, which platform you were using and what features you were looking for so that we can share it with the team?
Proton Drive through Proton Unlimited. I have my e-mail setup through Proton already, so the plan was going to be to consolidate, and use Proton for cloud storage as well. I have since downgraded back to Mail Plus. The reason being a pretty bad experience with Drive.
I honestly don't remember the fine-grained details, sorry, but it had something to do with waking up one morning to my remaining storage being consumed by every file in Drive being duplicated, with a title "(overwritten 21h4m)" or something like that appended to each one.
I can't remember what caused it, but what I do remember is that there was no way to remediate it through the Drive app itself. Meaning, if I wanted to return my drive back to its original state, I would be burning my own time to write the script to do it, or I would be burning my own time to research some other solution. I couldn't believe the feature was shipped in that state.
In my opinion, if there exists a feature that leads to all of my files being duplicated, then it shouldn't be released unless there has been thorough testing against that feature's ability to remediate the fubarred status that it has enacted to "protect" my files. In this case, I think the feature was version history.
So the three conclusions I could come to were that there was little to no testing, inexperienced engineers, or a project manager that isn't managing the project particularly well. In any case, I don't want to feel like I'm beta testing features with my most important files, so I went back to Dropbox and its more mature app. Haven't looked back since.
Pardon—what does Wu Tang have to do with Dropbox?
https://www.youtube.com/watch?v=PBwAxmrE194
Where do the Wu Tang come in here?
And yeah, I do not pay for Dropbox either. I've got something like 17gb from pestering people for sign ups XD
Dropbox ain't nothing to duck with.
cream
This guy Wu Tangs
> As CEO, I take full responsibility for this decision
CEOs need to not say this, unless they're quitting too.
I don’t know how but over time all the “new fangled” tech companies have the same approach to hiring. They just keep growing headcount as its own workstream. Google started it I think, their HR just interviews and grabs the talent without a need. Matching employees to a role that already got hired to a company is just insane. That is the reason why I never interview with anyone that wants to do a generic hire. These HR folks are purely assessed on how many they hire and so they keep hiring.
This just makes me respect the old school processes that apple and nvidia follow that much more. They are the best run companies in tech
Once you're a big enough company hiring needs to be its own workstream just to keep up with attrition.
It's clear they are preparing for an acquisition. They are profitable with great gross margins and cash in the bank. With 20% workforce reduction they are going to be very attractive to the salesforce of the world.
Not sure if it is relevant but after firing 500 people, the stock price is almost up by 2 dollars between 29th and and 30th October.
Next - we have to raise our prices.
Probably lazy money invested for gains takes its toll on the rest of the society.
You are welcome to start a business that competes with Apple/Alphabet/Microsoft/Amazon, and see if you can survive without raising prices or making bets that may not succeed and cause you to fire people.
Dropbox makes over 600 M per quarter and about $2.53B per year. They dont need to do layoffs. This is a choice to desctroy jobs to temporarily enrich shareholders to the detriment of the company itself. Classic short-term decision making. https://stockanalysis.com/stocks/dbx/revenue/
How is it to the detriment of the company? I've been a dropbox subscriber I think since they launched. Over the years they've added some nice features here and there, but I feel like at this point they could scale all the way back to server admins and sustaining engineering and be perfectly fine. This is another case of I can't imaging what all of those people actually DO day to day.
Financially, perhaps not, but maybe the product is now done? I mean, what more can you really add to the service at this point? There is still work to do with maintenance, support, etc. but that doesn't require the same level of employment as when you are still building.
Per Google, Dropbox had a net profit margin of 17% last quarter. Are they really hurting that badly that they have to lay off 20% of the company?
For a software services company, that margin is pretty low.
Google rule of 40
I did, and found that it's supposed to apply to early stage startups. Dropbox isn't an early stage startup anymore. At what point will investors have to be content with lower returns that are still in double digits and better than the vast majority of companies?
Took the responsibility right to his bank account.
This is a stack ranking layoff. They will fill the roles with new roles to teams they believe are more vital to achieving company goals. Pretty much every tech company has operated this way the last couple years. They’ve fired 10-20% and have replaced all those heads pretty much across the board.
and then after the first full clock cycle, middle managers are hiring people to fire them, to keep their core dev team intact so that it can solve problems that take longer than 90 days
This happens because of the culture of "if you dont spend your budget it gets cut"
Makes sense and was only a matter of time considering it has essentially no revenue growth to date this year and Non-GAAP margins in the low-to-mid 30's %. With near-0% revenue growth, investors will expect a SaaS company to post 40%+ margins.
Any easy to migrate to alternative to Dropbox? I don't mind paying, but Linux support and light sync client is a must. And I don't need more than 1GB storage.
Nextcloud if you don’t mind a mediocre piece of PHP software. It syncs files well for me, but a lot of the other apps are clunky and perpetually half finished (calendar, photos, etc.) but with some elbow grease I find it usable.
It seems that after the rampant hiring spree in the 2020s, it could benefit some business leaders to implement 'Founder Mode' in their organizations.
Surely that should fix things?
> We continue to see softening demand and macro headwinds in our core business
In plain English it means sales are crashing with no change forecast in the immediate future.
Next time someone says “gee I’m glad we aren’t anything like Reddit!” I’ll have the replies in this thread to point them to.
Keep ‘em coming fellas.
Comparing HN to Reddit is specifically covered by the guidelines, with several links.
https://news.ycombinator.com/newsguidelines.html
> Please don't post comments saying that HN is turning into Reddit. It's a semi-noob illusion, as old as the hills.
https://news.ycombinator.com/item?id=926703
https://news.ycombinator.com/item?id=633099
https://news.ycombinator.com/item?id=582513
https://news.ycombinator.com/item?id=289254
https://news.ycombinator.com/item?id=253657
https://news.ycombinator.com/item?id=66057
https://news.ycombinator.com/item?id=60767
https://news.ycombinator.com/item?id=13852
You're replying to a 3 months old troll account anyway. They won't bother to read it and they don't care to participate in good faith.
> As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change.
Ah yes, there it is. Maybe roll yourself into the 20% at least.
Honestly, this doesn't strike me as a bad layoff announcement, with one caveat.
I’m writing to let you all know that after careful consideration, we've decided to reduce our global workforce by approximately 20% or 528 Dropboxers.
Should be replaced with
I’m writing to let you all know that after careful consideration, we've decided to reduce our global workforce by approximately 20% or 528 people.
You should never use your pet names for employees in a layoff announcement. It makes an otherwise serious announcement seem tone-deaf.
The employee pet name shit is just really tired at this point. It's as bad as the job postings still looking for Rock Stars or Ninjas or whatever.
They're not Dropboxers, they're not associates, they are employees. Pretending otherwise is foolish on both sides.
Dropbox was where I first encountered the infantilization of the workplace, with animated emojis all over your biannual performance review. It was a shock, having come from a real company run by adults. Now everyone thinks this is normal, at least at companies that use Slack where 40% of the traffic is animated emojis.
Exactly how I felt working at Google with their “open concepts”. Thankfully I am back at the University of Washington in a cubicle now, away from the yuppy babies. God knows where people get these ridiculous ideas.
It's to remind them they are beloved "Dropboxers", and are part of the family... before terminating them.
I've never been a big fan of any such language, regardless of layoff context. Do enough people prefer it that it's actually a net win for business by way of improved morale or whatever? I wonder if it's been seriously studied.
Then again, I'm also of the mind that email addresses (or whatever other contact methods) ought to belong to functional areas/positions rather than to people (other than for person-specific topics such as time off, personal development, etc.) so turnover doesn't lead to questions of where to send questions/requests. I assume this is an unusually inhumane outlook!
From an organizational psychology perspective I'm sure it tests well that's why they do it
So beloved that they're willing to sacrifice them on the alter of stock price
I agree it's actually a well crafted layoff announcement. I wouldn't even faulting for using Dropboxers. If layoffs have to happen there are much worse ways of announcing and implementing them than this. Still very unpleasant if you're affected... (been there...)
Don't want to remind other workers that they share something with these workers. Solidarity can be contagious.
It is my observation that most unicorn execs become tone-deaf and out of touch very quickly. Something about human nature.
Sad news. But the message is crafted well. Crisp and no overly emotional.
I asked ChatGPT to make it brutal:
Responsibility would be the CEO also taking 4:1 odds on retaining his job.
Kind of crazy that Dropbox has 2600 employees no? What do they all do? Isn't Dropbox finished?
I guess there's a very small number maintaining the core Dropbox stuff and most of them are working on speculative projects to increase revenue (e.g. this Dash thing they mentioned)?
> Kind of crazy that Dropbox has 2600 employees
No, the HN consensus is they are massive geniuses for moving out of AWS. Nobody here ever accounts for the extra datacenter, hardware platform, hardware ops, infrastructure ops, etc.
I'm sure that they did their research before making the big move.
What kind of argument is that? Everyone does their research, that doesn’t mean there aren’t bad (and even stupid) choices made.
Ah that sucks, I wanted to work for them a while back
Lack of accountability and personal responsibility is made possible by tolerance for corporate impunity, which thrives in America.
Should companies reduce salaries instead?
Best I can say is, at least they didn't throw out a bogus return-to-office mandate to get people to quit.
Everyone is making fun of them, but can you suggest me something that:
works both in Windows and Ubuntu?
This is the first wave of the LLM layoffs.
That's quite unlikely. If Dropbox could save a decent amount of their engineering effort using LLMs with 20% less people, then they could also increase their engineering effort by a decent amount using LLMs and keeping the same workforce. Assuming the team aren't completely useless, being able to go faster would be significantly more valuable than any cost saving made here.
I dont know… i felt like the eng facing llm work at my company was distracting and not useful. I can only see Dropbox and others obsessing over LLMs as clinging to relevancy. At the end of the day we will just get a chat bot and a handful of niche projects AI investments paid off for
Anybody from Poland will be layed off?
I expect to see more of this as companies see their disappointing revenue projections as we approach a common end of FY.
Spineless executives with their corp speak - they're layoffs.
Incredibly disappointing, but not surprising. Dropbox is no longer in its growth phase, and needs to settle into maintenance mode - enjoying a steady stream of revenue while continuously optimizing expenses, with a bit set aside for R&D to try and find the next big growth opportunity. Severance packages look really good, with the caveat that these figures really should be _the default_ in Corporate America at this point, like our EU peers.
I just wish the language in the announcement reflected this reality. Instead, it feels like a lot of desperation measures from current tech companies: overly optimistic to the point of naively dismissing or ignoring reality, and believing that if we just keep building then we’ll continue to grow forever.
TIL that nobody knows what they're doing.
Jokes aside, how do you end up having more than 500 excess people than what you need? What is management exactly doing during the time they went from 1 excess person to 500? Did they just hope the "macroeconomic headwinds" would become tailwinds? Didn't they at some point see that they have more people than valuable work, and maybe we should deal with that problem instead of hiring another team to place even more bets?
Actually, I know why. It's because they have too much money and when you have too much cash, you start splurging without thinking and then one day the chickens come home to roost.
Honestly, I would not hire a single manager from these big companies because they operate in an environment where they're playing with monopoly money and don't know what reality is. There's something to be said about spending within your limits and not splurging on the next shiny object. Way back when it was called cost control and operating within a budget. All that management theory seems to have been lost in the age of cash injections and valuations based on everything except retained earnings.
> Actually, I know why. It's because they have too much money and when you have too much cash, you start splurging without thinking and then one day the chickens come home to roost.
This is an incredibly uncharitable and shallow take, on the level of that comment many years ago that said something along the lines of "what's so interesting about Dropbox? It's just rsync, I could build it in a weekend".
We don't operate in a perfectly legible world, especially more so when it comes to people. It's all bets and risks and whatnot.
If you or anyone has the power to create perfectly aligned and efficient organization, I'm waiting here to see you build large multi-trillion dollar companies. Let me know how it goes.
My understanding is DropBox was trying to transition from sync and share to being a multi-product document-centric company (look at acquisitions like HelloSign).
One possibility is they staffed up a bunch of projects on bets that ultimately didn’t turn into viable products, and are now pulling the plug.
More like the cloud sync functions out of the box on Google, Microsoft and Apple products caught up in features and already got good enough for the customer base of these to not bother paying extra for Dropbox no matter how much better they would have been. See Evernote.
It's difficult to go against Apple, Google and Microsoft when they're vertically integrated and can squeeze you on all sides offering an OS, email, browser, cloud sync, document editing, etc with seamless integration between them, while you're just a cloud sync service on their OS. You don't have any moat, while they do. There's no way you can compete with them from that position unless the government were to break up their vertical integration for anti-competitive practices.
I think that is why Dropbox has been trying to diversify their offerings. They know as well as the rest of us do that cloud storage that's only cloud storage and not much else will have serious trouble competing with cloud storage that you also need to have to work conveniently with Google Docs, or Office 365, or whatever.
But, as parent poster pointed out, taking on that new work requires hiring people to do it. But that's expensive, and those new products need to start generating revenue quickly in order to cover the increased payroll costs.
For me, Dropbox's moat and USP is that they make all of their money from file storage, giving me some confidence that they'll ensure it keeps working.
That's definitely not something one can say about their BigTech competitors.
>For me, Dropbox's moat and USP is that they make all of their money from file storage, giving me some confidence that they'll ensure it keeps working.
To me that's now become a red flag with these companies. Not speaking of Dropbox in particular but all these start-ups from the past that offered a free new innovative product/service for Android/iOS went to shit soon after Appel and Google copied and integrate similar functionality into the OS out of the box, leading to investor money drying up and the company suddenly paywalling and gouging existing users to make money to survive. Look at Evernote, LastPasss, Cerberus, etc. but also Amazon, Netflix, etc, enshitification galore.
Google and Apple are less likely to do that since they already make more money than God and tend not to want to fuck up their reputation just to squeeze a few more bucks from their users.
That's why I don't trust these small app companies anymore, since they'll get squeezed out by Apple, Microsoft and Google, and enshitification will ensure. The app is good in the beginning for a few years when VC money is abundant and their goal is user growth at any cost, but after that suddenly once you're locked in, you get paywalled, as the company tries to squeeze more money from you so VCs can get their money back. Rinse and repeat. So no thanks, I got burned a few times already.
The problem is that it’s unclear consumers actually ever wanted Dropbox to become any more than a sync and share company, or to deal with the resultant complexity that that will bring to what has been a beautifully simple product. But they had to do that to justify Sky-high valuations.
> This is an incredibly uncharitable and shallow take,
So is yours.
> We don't operate in a perfectly legible world, especially more so when it comes to people. It's all bets and risks and whatnot.
What bet was dropbox taking by overexpanding their workforce by 20%?
> If you or anyone has the power to create perfectly aligned and efficient organization, I'm waiting here to see you build large multi-trillion dollar companies. Let me know how it goes.
This is an interesting statement. Dropbox is a single digit $billions company, not trillions.
> What bet was dropbox taking by overexpanding their workforce by 20%?
When asking this question, I think it's good to remind ourselves how much we don't know. We don't know if they overstaffed in a push to expand their business that didn't work out, we don't know if the had an older operating model that went from "efficient" to "inefficient" as scale and market dynamics changed. We don't know if advances in productivity to tools, or changes to major client accounts, impacted their staffing needs. Determining whether one is "overstaffed" is a multi-factorial determination that can be false one month and true the next.
Set aside whether it's uncharitable to just assume management oversight or idiocy - it's hubristic. Having said that, it doesn't mean the assumption is wrong, it could be exactly right! But it might not be.
They could also be reducing their workforce because they decided to for human reasons and their value might go down by more than the cost savings.
How is my comment uncharitable?
The OP made strong statements with weak backing. Their statements were also placing blame. Your profile says you're an SRE--can you imagine a post mortem with that kind of attitude?
I think what people forget about layoffs is that all those "excess" employees who have been there didn't sit around doing nothing during the time they were there.
Those 20% of Dropbox staff wrote a bunch of code, made a bunch of sales, and did a lot of other tasks that will have an impact even after they don't work there anymore.
Even though they are being laid off, their contributions still have a positive impact on the company. Even the government treats it this way from a taxation basis: software that is written by engineers is treated as a depreciating asset that is amortized over 5 years.
In other words, if I write some code that consumes $100 worth of my labor, that engineering work is considered by the IRS to be an asset to the company with book value from now until 5 years from now. If I'm laid off, the company still has that $100 asset on their books, which depreciates over 5 years.
It's perfectly normal for a business to plan out their future based on uncertainty and risks. If they only hired people they knew 100% they would need forever, they'd miss out on a lot of opportunities.
Extending this logic far out enough and we could say ridiculous things like "How could IBM be so irresponsible to hire hundreds of thousands of engineers to make business mainframes when their marketshare will dwindle to a sliver in 40 years?"
The truth is that businesses need the employees that they need at a point in time, and that number is constantly changing.
> The truth is that businesses need the employees that they need at a point in time, and that number is constantly changing.
Another truth is that we've collectivly decided that all people must be working in order to "earn" their right to exist. So anytime there is a large layoff like this, there are a lot of new stories about people relocating, making major changes to their lives, some for the better, some for the worse, and some for the absolutely devastaing.
One must not forget that these 'human resources' are more than just a number.
I'm all for better protections for workers, and I think that the US should make companies give employees more notice, or alternatively make unemployment benefits a program that is more automatic, a full 100% of salary instead of being capped, and biased more toward the employee. I.e., I think a company should have to prove to a judge that an employee was fired with cause or quit voluntarily before the employee loses their benefits.
I totally agree with the idea that the benefits of at-will no-notice termination employment are lopsided in favor of the company, but the flip side of that arrangement is that it's very easy to get a new job in the US compared to many other places. It's easy to be hired on a short conversation and a handshake in an at-will environment.
Depends. If those employees truly are excess and they haven't been doing much for the past couple years, they might be just producing tech debt. Cancelled projects and migrations have negative value. I doubt this entire 20% was made redundant overnight, which means they haven't been valuable for some time.
> Honestly, I would not hire a single manager from these big companies because they operate in an environment where they're playing with monopoly money and don't know what reality is.
In part, to unpack why part of this glib take is missing the complexity, "don't know what reality is", is that finding reality is slow and costly. Perhaps your team provides a platform which is used internally by several other teams building various products. It supports a bunch of use cases, but it's hard to evaluate the actual ROI of the platform you provide, both because no one knows how much better/worse those products would have been without your platform. Would they have taken months longer to implement? Would they have not been possible without spinning up a team like yours?
Further, some of those products actually are used by paying customers, and others are still in development. Of the products used by paying customers, it's unclear which they would actually pay to use vs which they use because it's available in their subscription basket (e.g. is Dropbox Paper making money or is it just that some Dropbox customers use it but would pay the same sync subscription if Paper was killed?). Of the products that are not yet in customers hands, how should you value them? If your small team supports multiple in-development products, that must be worth something even if they're not revenue-producing yet.
Similarly, suppose you're a manager who runs a team building a product which has dependencies on multiple platform/infra teams -- do you really have visibility into the real costs that your team's requests create? Can you really know the ROI of your team, to guide choices about various investments?
This kind of ambiguity means that even when leadership wants to see which teams are really contributing value and how much, it's quite difficult to see. Teams may optimistically estimate their own value because they cannot see all of the costs to which they contribute, or because they cannot see which revenue-affiliated use is actually valuable.
The problem with DropBox is that it can't really compete with Google, Microsoft, Adobe, Amazon Drive, etc. It's too narrow of an offering.
Open the "More" menu in your Dropbox interface and I think you may be surprised at how many different products they have.
I am sure they're not trying to be a Microsoft of Google, but they're trying to make a niche in document handling, file sending, password management, a lot of those little things that are something of a pain for many businesses.
I think if you compare what Dropbox is offering at $15/user/month to Microsoft 365, there are a bunch of things that Microsoft isn't really covering or isn't covering as well (and vice versa, to be fair). For example, the ability to take e-signatures, document watermarking, facilitating out-of-organization file transfers, etc.
I also think they compete quite well with Amazon Drive, considering that Amazon Drive was discontinued.
I never said you personally are their ideal customer profile.
My point is that this is probably the case for most users; the "more" doesn't mean anything because it's some functionality created by underemployed product managers rather than things that customers actually need/want to pay for. If you have to point out "hey, look here under this 'more' menu", then it's not part of the primary value proposition for the product and not why someone would pick that product. Sure, it might be that it is useful for some subset of users, but that you need to wave people down to show them that value means that it's probably not that valuable.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
This question always gets posted to HN, and is always the top comment whenever an article talks about how many people Company XYZ has. It seems like a lot of people just have never worked for a company that's growing (in terms of both profit and the amount of _stuff_ they are trying to do). Companies' need for people grows quadratically in proportion to the amount they are trying to do, not linearly. If it takes a staff of 20 to deal with 2 "units of work", it's going to take many more than 40 to deal with 4 units, more like 80. For 10 units of work, we're talking a staff of 500. You need all of these people to manage all of the growing internal network of complexity and yes bureaucracy that forms whenever you need to get people to work together. For every N people you hire, you'll need a manager to manage them, and for every N of those managers, you'll need a second level manager, and so on. You also start needing to actually deal with legal and regulatory compliance (rather than the yolo approach most startups take), you need to deal with HR and payroll for all these new people, you need to deal with power-of-2-scaling training and internal documentation needs. And all of those people you hire to do these things need their own managers and on and on and on.
I've never seen a company successfully scale what they are trying to do without needing a ton of people. Maybe every company I've ever worked at is just inefficient but I don't believe it.
> Companies' need for people grows quadratically in proportion to the amount they are trying to do, not linearly.
That's fine. The question the poster raises is how come they have 500 over the number of people they need, if the amount of work wasn't reduced.
As a proxy for amount of work, we can take Dropbox revenue: https://stockanalysis.com/stocks/dbx/revenue/
If those people were needed but now aren't, does this mean Dropbox plans to do less "units of work" and decrease its revenue?
I think a more convincing argument is they overhired even when taking your argument into account.
> This question always gets posted to HN, and is always the top comment whenever an article talks about how many people Company XYZ has.
Perhaps because there hasn't been a good answer yet.
> For every N people you hire, you'll need a manager to manage them, and for every N of those managers, you'll need a second level manager, and so on.
But clearly that's not absolutely necessary, because already we know that two uncoordinated companies can make 4 units with 20 staff each. If the second level manager isn't providing enough value in terms of eliminating duplicated work then they shouldn't be hired.
Of course diminishing returns are going to set in, and bureaucratic inefficiency is a law of nature, but I see your answer as more shallow a dismissal than the question deserves.
And not to mention acquisitions come with their engineers, sales staff, support and management crew.
The leadership should have been rebalancing yearly and quarterly in small chunks so they’re not in a position like this. It’s also a strategic play, while they come out with their major AI move next. That’s my guess. Gotta satisfy that board somehow
Dropbox is public and has actual profits. I think your comment is not accurate.
Instead I think the company has plateaued in growth and thus they need to cut back spending otherwise they will have falling profits and no growth - which is worse than just no growth.
Are their targets reasonable? Or are they reaching for fundamentals that don't exist as a storage utility?
(Dropbox customer, pls just sync and store my data reliably)
Edit: Reply was as I expected, thanks bhouston, agree they are potentially at the mature stage
If you don’t have growth you have to treat this as a PE firm would. You cut spending to a minimum while ensuring you keep your customers, thus maximizing profit to assets ratio. A lot of companies do not have growth but are great money machines. It may be that this is the mature stage for Dropbox.
Yeah, I just had a look at dropbox stock. I would have expected permanent cash hemorrhaging, but no they have a P/E of 15.
That is actually quite good. I am surprised.
A P/E on its own is not good or bad. If the company’s earnings are in decline you would expect a low P/E, and if they were growing aggressively then you would expect a high P/E. It is only when there is a mismatch when the ratio becomes interesting. I am not saying it isn’t interesting in this case but the comment you are replying to does not tell any information that would lead to the conclusion it is “quite good.”
Yeah if there is no growth but a lot of earnings the stock should probably start to pay dividends no? Otherwise what is it doing with all that cash it is generating?
100%. Doesn’t even have to be zero growth - just growth less than investors want to see, as implied in the P/E ratio (since investors control the P).
> Didn't they at some point see that they have more people than valuable work
Product roadmap probably had some ambitious ideas that got scrapped when earlier steps proved to not be marginal revenue generators.
Jobs said it best: Dropbox is a feature not a product. All their efforts to make it a product (let alone a platform!) have worked against usability and alienated a lot of users. I am hopeful these layoffs signify a return to sanity in a company that seems to be leading the charge in racking up unforced errors.
They were (I think) first to market with fast, cheap cloud storage but at this point there's just too much competition and not enough differentiation. I have only the vaguest awareness of them trying to build some value adds to make Dropbox more of a collaboration tool, but I've never seen it get any adoption. I'm guessing those are the LOBs getting cut with this announcement.
I switched to OneDrive when it started getting bundled in free with Office 365. I also tried iCloud when it came in the Apple One subscription. Both are total shit compared to Dropbox. The sharing in iCloud is nothing short of laughable and OneDrive is just buggy Microsoft garbage (on my Mac - might be better on Windows). I am planning to move back to Dropbox which says something - I’d rather pay than use competitors’ products that come to me for “free”.
That said, I’d rather the company stick to its fundamentals with no further feature creep and focus on lower subscription cost rather than features to justify higher costs.
In my experience a lot of hiring in those big or publicly traded companies is to "build the structure to get promoted".
When you're big, investors and banks and auditors don't like flat structures with a lot of individual contributors. A vertical structure is a must to go public. The rest is people playing the game they're forced into.
> When you're big, investors and banks and auditors don't like flat structures with a lot of individual contributors. A vertical structure is a must to go public. The rest is people playing the game they're forced into.
Might be the first time I've heard this hot take out. What makes you think banks care what the org structure is for a public company? Banks don't care for size as long as the company is fiscally prudent and can prove it. They do check silly metrics sometimes like revenue per employee, but they really don't give a damn how your company is structured. By that metric, 2012 frat club Facebook wouldn't have been touched - yet they had like 10 investment banks frontrunning their book. In fact, I'd say 2012 Facebook IPO was the trigger for a lot of banks not caring about such silly things.
As a counterpoint to your argument, there are 200-500 employee biotechs not generating meaningful revenue that are trading publicly (and which went public without a SPAC play). The decision on who gets to go public falls on the exchange, not on the banks - they simply sell your stock to their investor list, and a flat structure with fewer than needed employees is actually a great selling point for a bank.
>In my experience a lot of hiring in those big or publicly traded companies is to "build the structure to get promoted".
This comment should be at the top. Not just at the top of the thread, but at the top of HN homepage.
It's how during the pandemic many companies just suddenly doubled their headcount without any extra output in products or quality, and now we're seeing somewhat of a correction to that with all the layoffs.
It's how you see people in tech hubs climb to the top of some large companies despite never having worked longer than a year at any company. Nothing against job hopping but I ask myself what skills and value people like that actually bring, who have 10x 1-year of experience, as they're never in a place long enough get to see the end results of their work and decisions, if they're good or bad, they barely pass the onboarding stage.
It's also how many of these large orgs end up failing long term. Look at Intel now, or german auto makers, as the goal of each worker there becomes gaming the system to getting yourself a promotion at the cost of the org as a whole, instead of adding value to get a promotion, since the org is very bad at setting the right goals and incentives for the workers. Google and the like who have a monopoly with an impossible moat or an infinite money cheat can resist this enshitification much much longer than the rest of the companies.
I'm not even mad, in the end most people are just playing the game, they don't get to write the rules of the game, and the ones who do are out of touch with reality so they can't be mad when people try to game it for their personal advantage.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
There never is an excess amount of workers (sure, there probably are 4-5 exceptions). What happens is that they need those employees, but instead are going to demand that the employees that are left pick up the slack. Which they will because they need a roof over their head.
Those companies are merely cutting costs, they don't actually have any excess employee.
Maybe they developed all the features they thought were necessary and now can manage the features with less workforce.
It's not black and white like this. There is such a thing as having to many employees and such a thing as having too little. I think realistically, most of the time, it's a mix.
Or they hire Accenture.
People are hired to deliver what's on product and/or engineering roadmaps. If the roadmaps are less ambitious, it becomes pretty easy to justify headcount reductions.
It's also less labor intensive to focus on a few core areas, making smaller incremental improvements than doing that PLUS launching big ambitious greenfield projects.
Also, remember how people used to say "Startup X is a bad idea because <established tech company> could just clone you in 6 months"? Well, those ideas are now back on the menu for entrepreneurs because bigger tech firms are now running too lean for quixotic defensive plays like that.
It has been even more than 500 excess employees. 300 were laid off in January 2021, and another 500 in April 2023. The percentages imply that headcount bounced around from 2800 down to 2500, up to 3100, down to 2500, up to 2600, and now down to 2100.
These same macroeconomic headwinds have existed for some time now, and the fundamentals of Dropbox’s core business commoditization haven’t changed for the better.
I wonder how many staff they need just to keep the lights on. I bet it's not more than a tenth of what they have now.
The problem is we live in a society now where everyone has a public platform to promote themselves (linkedin etc) and there are a lot of ruthlessly ambitious narcisists who put self promotion and resume building ahead of everything else.
So they muscle into a team lead or manager position and grow the team, because it looks good to post on linked in "hey I'm growing my team" and it doesn't matter if the team needs another person.
And who cares if the company is then stuck with surplus employees, not the person who hired them because they have moved on and up at another company.
> how do you end up having more than 500 excess people than what you need?
Not sure if you are serious or not, but understanding the output of knowledge workers is a famously difficult task.
I have a offtopic but related question. Why are our taxes still calculated in stepwise bracket manner. Why not a smooth curve? We have the mathematical and technical knowhow to implement it. Coming back to the Dropbox layoffs, why was this decision a drastic stepwise reduction. Not a smooth curve over a period of say 1 year.
>understanding the output of knowledge workers is a famously difficult task
That's why large companies don't look at individual worker output (performance reviews are mostly performative and subjective) and just look at stock prices and profits.
If "line goes up", it means workers as a whole must be doing a good job , even if individually many might not be good at their jobs, but as long as line goes up, nobody cares to look too deep into the hows and whys.
If line stops going up, then they start laying them off more or less randomly or forcing RTO, or such things regardless of individual performance.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
If you bet on growth/new features but your current and future customer base are going out of business or downsizing and you have to switch to more of a survival strategy.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
It's actually a pretty simple risk/reward equation.
The risk of understaffing a company is greater than the risk of overstaffing a company.
If you overstaff a company, the solution is quick and easy. If you understaff a company, the solution is extremely painful and takes a very long time to fix.
E.g. it takes 1 day to fire someone, but 9 months to hire/onboard someone. So to ensure the staffing isn't a bottleneck for growth, the obvious answer is to err on the side of overstaffing.
TLDR: You need to hire and onboard people before you actually need them. If hiring and onboarding someone takes 9 months, you need to guess how many resources you'll need a year from now, and hope that your estimation is accurate. (And obviously a lot of companies over-estimated how many people they would need, hence lay offs)
If you're running a SaaS that isn't customer-interaction heavy, you can usually get away with dropping about 80% of your technical staff (if, of course, you pick the correct 20%, which is not easy).
Having worked in several startups through the early growth stage, it's just surprising how much you don't get more done with, say, a 500 employee company than a 50 employee company.
There is a ton of room to grow less and maintain more, and it's a real struggle for a business to decide its product is done with major growth and the associated need for a large staff.
Staffing your business (or even team) with the right number of people to accomplish a job is a real challenge that the majority of managers don't engage with, instead simply trying to grow their little kingdom to the largest size they can, both for intrinsic power reasons, and also to foster greater jobs for themselves later on.
If I see a manager put "led a team of 40" on their resume, in the interview, I ask "did you need 40 people? Did you need more, did you need less, and how would you have found out?" and the number of times this completely catches them off guard is staggering. It's like... did you choose that number for a reason? Or was that just the most you could fit in your budget?
And sure many hands make light work, but there's an inflection point where the sheer weight of your organization becomes a liability, where getting anything done or changed requires the involvement of so many people that most just don't bother unless it's an emergency. That's how you get corporate rot, and that's how you get all the massive companies we rag on here about all the time who have been making like, 5 products since before most of us were born that everyone fucking hates but everyone uses because everyone else does.
>many hands make light work, but
I'd like to emphasize further the but. The speed of tasks scales with the inverse log of the organization size.
In other words, as you get bigger, every project gets slower, regardless of how many people you have working on it. A project that would take a week in a tiny organization might take a month in a medium organzation and 2 quarters in a large organization. Sometimes there are good reasons for this, sometimes not.
In a large orginaization, launching a new feature requires interaction with lot of other existing teams which slows speed down. Auth, permissions, metrics, etc. The new feature must seamlessly interact and integrate with existing systems.
Yeah but usually these people are top candidates and occupy the other engineering manager positions, and you, managing a super productive team of 5 or 10 instead, don't even get into a single interview there. And that applies to every single company I have applied to.
> how do you end up having more than 500 excess people than what you need
The Law of Multiplication of Subordinates:
> we must picture a civil servant called A who finds himself overworked. Whether this overwork is real or imaginary is immaterial; but we should observe, in passing, that A’s sensation (or illusion) might easily result from his own decreasing energy—a normal symptom of middle-age. For this real or imagined overwork there are, broadly speaking, three possible remedies
> (1) He may resign.
> (2) He may ask to halve the work with a colleague called B.
> (3) He may demand the assistance of two subordinates, to be called C and D.
> There is probably no instance in civil service history of A choosing any but the third alternative. By resignation he would lose his pension rights. By having B appointed, on his own level in the hierarchy, he would merely bring in a rival for promotion to W’s vacancy when W (at long last) retires. So A would rather have C and D, junior men, below him. They will add to his consequence; and, by dividing the work into two categories, as between C and D, he will have the merit of being the only man who comprehends them both.
source: https://www.economist.com/news/1955/11/19/parkinsons-law
There is a tendency for managers at big tech companies to want to hire regardless of need and "build an empire", so they can then say on LinkedIn that they managed n number of people. Then they will move to another big tech company, rinse and repeat. At these companies, the more people you manage is translated by higher ups to responsibility and salary. There isn't much reward to keep a team small, focused, and efficient.
Most companies have a bunch of people who are literally doing nothing.
Conversely, I also know folks where everyone is redlining in the org because they cut deep and folks who can leave are able to leave for equivalent or better roles. The market isn't great, but it isn't 1999-2000 or 2007-2009 either.
If you want another job, make it a job to find it, and you will eventually find it.
> Actually, I know why. It's because they have too much money and when you have too much cash, you start splurging without thinking and then one day the chickens come home to roost.
But that view might oversimplify things from a business perspective, especially beyond the case of Dropbox.
When a company has ample cash reserves, a common strategy is to leverage the opportunity cost. This can mean growing the team or investing in ventures with both planned and unplanned outcomes. Take Microsoft or Google, for instance: both have a long history of projects and acquisitions that might be considered failures, but these bets were possible because they had the resources to try, even if some failed to pay off. This approach acknowledges that some investments will succeed, while others are simply part of exploring new growth avenues.
Time is the resource that you cannot recover.
As a former engineering manager this is obvious, in my opinion. Companies don't really like laying people off and PIPs are long and require work. If someone is underperforming, hiring a new person is easier. Alternatively, instead of retraining someone, hiring a new person is easier, and you just keep the old guys around doing whatever. Plus, once in a while they might actually offer something (they typically are very knowledgeable about past decisions)
Given how much money there is in these industries this strategy works for a long time.
The alternative is a harsher work environment that is common in other fields. Despite the popular belief on this forum, tech work has some of the most genteel management of all industries.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
Often with this sort of thing, the company is essentially sacrificing future revenue to cut current costs; projects get delayed or cut, but, hey, the balance sheet looks better for a bit!
The other reason it happens (and here the cuts would mostly be operational and sales) is if the company just isn't getting as many customers as it had expected.
This is literally every startup I've ever worked for. Grow before you need to, constantly expand your market. This is like 101 stuff
> Jokes aside, how do you end up having more than 500 excess people than what you need?
What you need can change over time. As I remember, Dropbox acquired a bunch of companies of the years, so maybe some of them originated from there. They also had many new products and tried to move into new directions, which probably also brought many new people.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
One of my dad's anecdotes, back when he was alive, was when he was interviewing someone for a job.
"Why did you leave your last position?"
"After six months, management noticed my entire floor was doing the same thing as the next floor."
I mean, imagine that you are leading a team of 4 people.
Are you sure that you will always be able to accurately tell if you need a fifth person or not?
Or you have a team of 5 people. Can you tell if you have a one too many?
Maybe not. But typically natural attrition rates would let a hiring freeze take care of most of this. Layoffs are kind of normal current day, but a 20% layoff is not.
The common argument against relying on natural turnover rate is that the most competent workers are also those who are the most likely to leave because it is easier for them to find a new/better job. So if a company just freezes hiring instead of doing layoffs it will experience a reduction in the competence of their workers.
I don't know if this is empirically true or not, I haven't seen any statistics. But I don't see any obvious logical errors in this reasoning.
I suppose it is the following: 1. Maybe they didn't over-hire but instead the economic conditions changed. 2. Maybe instead of gradually letting go of people it is best to wait and then strike once and hard.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
Because circumstances change and evaluation of projections and optimal employment numbers under them change, and it's never optimal to hire enough people to actually assess that with minute-to-minute updates.
> There's something to be said about spending within your limits and not splurging on the next shiny object.
There is something to be said for hiring and cutting slowly rather than rapidly in response to changing circumstances, and that is that, under the material incentives in a competitive capitalist economy, it is a poor strategy for a corporation.
> Way back when it was called cost control and operating within a budget.
Guess what happens quickly when you are good at operating within a budget and the projections on which the budget is based changed and so the budget changes going forward?
how about you estimate a software project to within 20% accuracy? I've never seen it happen once for anything beyond the most trivial thing. have some humility buddy
As a recent example, when you have "the great resignation" of 2021 turn into (in my view) "the great hiring" of 2021 followed by the Silicon Valley Bank collapse of 2023, it's obvious that hiring managers just follow what is trendy.
Obviously past results do not guarantee future, but what the masses follow is generally a recipe to disaster. I think that's why we're seeing the return/visibility of stacked ranking. Management theorists see one successful company trive or a former successful company fall, and then everyone follows suite because they're "data driven," not driven by first principles
What is a fiefdom without serfs?
Huh? It's obvious to almost everyone that Dropbox is in a tough position in that it's largely failed to expand its offering beyond the very original product and value prop, which is also being eroded by the other major players.
So they attempted to use DB's position to leap-frog into new product categories, which require big spend on R&D and related teams, as well as new heads for supportive teams (sales, marketing, support, etc).
It's not working, so they are pulling back and re-trenching.
That all seems pretty transparently NOT a "having too much money" problem.
Labor = KPIs not People.
> Didn't they at some point see that they have more people than valuable work, and maybe we should deal with that problem instead of hiring another team to place even more bets?
Well, part of the overhire spree was to prevent other companies from hiring the talent.
IMHO, that's both disgusting and abusive.
> What is management exactly doing during the time they went from 1 excess person to 500?
It is usually not the case that these people are standing around and doing nothing. It is more that they are working on initiatives and projects which the company is discontinuing now.
When the company has a lot of money investors expect them to spend some of it in finding new directions and opportunities. It's not all just spent on keeping the lights on, and the servers humming.
If they don't do this people in 3 years will be asking "What has Dropbox been doing all these years?"
If they are doing it right you are just amazed by the steady trickle of new features and services, and improvements which keep the company relevant in the years to come.
Also, factors like quality, maintainability, performance, etc are open ended and hard to measure. So teams tend to just keep improving them. Some amount is critical, some is important, some is nice to have and some is just excess.
Sometimes I think that tech world has been after "growth" for too long. Instead accepting that at some point companies are reasonably mature. After which they can do more incremental development with lot less head count growth.
That’s such a naive take. For the past 5 years at least these layoffs are not about particular projects being discontinued or even improving the bottom line. This is about how people are expendable and their priority is investors.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
Twitter fired 80% of their staff; and they've been releasing features faster than when they had 4x more people. I suppose work can expand to occupy whatever available headcount - nobody cares whether it's useful work or not.
> Actually, I know why. It's because they have too much money
Money was almost literally free for like a decade. I'm so glad that era is over, and I hope it never returns, but the period of adjustment as businesses discover that they have to actually have a business model again does suck a bit.
Forgive my ignorance, but why would very low interest rates ("almost free" money) be a bad thing we want to avoid?
Isn't it for best if society keeps interest gathering, rent seeking, behavior to a minimum and instead encourages that more of the available capital is put to good use?
Because having a functional business model is what defines whether the use of capital is good or not. Bad outcomes from low interest rates are all these layoffs from overstaffing, all the wasted human-years on blockchain & NFT garbage during 2021, VCs blowing money on obvious failures like Juicero, etc. These are not good uses of capital, and if they had to have a real business plan to get capital in the first place, it would not have been wasted.
> These are not good uses of capital
I suppose it depends on what the alternative was for that capital. Sitting in an index fund wasn't really doing anything useful for society, but providing high paying tech jobs to dropbox employees was probably very useful to society. Especially when you consider all of the downstream impacts of those employees spending.
Similarly, I would ask if society gets more good out of transferring the wealth to crypto-bro's or from it sitting in relatively low yield investment vehicles? I would wager that the crypto bro's buying lambo's acted as a better economic stimulus than non-productive interest gathering.
Now if the choice had been between investing in "good" businesses vs "bad" businesses I would agree, but I don't think it was.
> I would ask if society gets more good out of transferring the wealth to crypto-bro's or from it sitting in relatively low yield investment vehicles?
I think rewarding people for dumping useful labor into a black hole is bad, yeah. If we're just handing it out, we could've split all that money to everyone equally and reaped much better rewards as a society (useful social services; more family stability; less poverty) than giving a few gambling addicts overpriced cars in return for nothing.
It feels like you're only thinking about it at a personal level.
From a higher level perspective, we didn't give them those cars, they bought them. And buying them provided tangible benefits to the people who made them and the companies that serviced them, etc. The money was freed from the dragon hoards of the unproductive and actually SPENT on something. Spending is useful. Hoarding isn't.
Could it have been better spent? Sure, but spending it at all is better than leaving it to rot collecting a few points interest without actually producing anything of value.
"As CEO, I take full responsibility for this decision" Oh hey another one that takes responsibility by taking on 0 consequences.
Remember Gavin Belson?
"But make no mistake. Though they're the ones leaving, it is I who must remain and bear the heavy burden of their failure."
Was that the same scene where he said "Their failure is my fault...for trusting them."?
I just about had to change my underwear after that scene.
The setup leading to that phrase... brilliant.
https://www.youtube.com/watch?v=u48vYSLvKNQ
same vibe: https://www.youtube.com/watch?v=hiKuxfcSrEU
so accurate it's scary
There was so much that was disgustingly spot on in that show.
Unpopular opinion, but I don't understand this type of comment. It sounds like people want executives to get some kind of punishment or pain as a consequence of laying people off.
But what would that even look like? A fine? That would probably make no practical difference, and would discourage them from making changes that need to be made. Fire them? Then you would probably get a worse decision maker in the driver seat going forward, who also didn't learn from experience of going through layoffs.
Layoffs are awful. They affect lives and families deeply. But all businesses don't go up and to the right forever. Reductions are a necessary part of running competitive companies.
> But what would that even look like?
> Iwata ran the Kyoto, Japan-based video game company [Nintendo] from 2002 until his death in 2015. To avoid layoffs, Iwata took a 50% pay cut to help pay for employee salaries, saying a fully-staffed Nintendo would have a better chance of rebounding. [0]
[0]: https://www.cnbc.com/2024/02/13/nintendo-ceo-once-halved-sal...
By taking that pay cut, how many employees could Nintendo keep that would otherwise have been fired? 5? 20? Certainly not in the hundreds or thousands. This just seems like virtue signalling.
Edit: to expand on my point re virtue signalling: the article states the CEO took a salary cut, not total compensation (and it doesn’t elaborate on the value of the cut). Salary is a small fraction of CEO total compensation - the bulk of which is stock based, and even in the event that stock grants were also cut, the CEO surely already had significant stock. Cutting a relatively small component of compensation in order to boost the stock price which disproportionately adds to the CEO’s personal wealth seems like virtue signalling to me. If the CEO said “shareholders be damned, morale and culture are all that matters in the long run, no layoffs etc etc” that would seem more meaningful.
Optics matter. When a CEO approves mass layoffs, and ALSO approves a 60% salary increase, I can only conclude that the CEO is nothing but self-interested. Rewarding yourself for firing a statistically significant percentage of your company SHOULD indicate failure, not success.
I feel like this would be the few times where virtue signaling is probably a benefit. It can make all the people in the company feel like the leader is on their side, and maybe make the employees less resentful and be more productive.
It may signal virtue, but it has direct, practical, beneficial impacts on the company. I don’t see why that would be virtue signaling.
What would someone need to do in order to avoid being reduced to a virtue signaller?
In 2021, the average S&P 500 CEO made 324 times what their company's average worker made [0]. The widest gap was at Amazon, with Bezos making over six thousand times as much as the average worker at his company. The report is from a few years ago, since then the gap has increased further. So yes, many companies could trivially retain hundreds if not thousands of workers simply by cutting the CEO's pay.
[0] https://www.businessinsider.com/these-20-companies-have-bigg...
Taking a massive pay cut isn't "virtue", it's a direct and measurable sacrifice. Just because you don't agree with the position or outcome doesn't make it "virtue", I'd wish people stop using that word for things they disagree with.
It shows the rest of the staff that you actually are taking responsibility.
Virtue signaling actually works, people wouldn’t do it otherwise. ;P
In this specific case, don't we exactly want the CEO to signal virtue to the company and employees ?
5 or 20 workers (and their families) who don't get jerked around for stuff way outside their control is an absolute win.
Right now, there is no actual downside for executives. Just less upside. Did they earn XX Million this year or XXX Million. Some tangible downside would be nice.
I mean, heck, why aren't they fired? And really, it's more then middle management where that'd make a huge difference. If bad performance led to actual shakeups in the entrenched middle management, we might actually see business practices change rather than continue on through the established fiefdoms and petty corporate politics.
This is probably the best answer in terms of what people want to see, that would also still give the company the best leadership going forward.
If the CEO taking a paycut materially reduces the size of what would otherwise be a large layoff on the basis if reduced cost savings, the CEO was way overpaid to start with. (And it probably doesn't change the number of people the firm can usefully employ under changed conditions, even if it provides cost savings, because the latter is based on whether employing them makes more money than it costs, to which external cost savings are probably mostly irrelevant.)
It should be added that layoffs are not commonplace in Japan. What you'll see instead are bonus cuts and salary reductions (at most 20 percent). To do US style layoffs you would need to show that the affected department was directly involved in a line of business the company has abandoned. If this isn't the case the employees stand a good chance of successfully suing the company in court. And then there's the reputational damage which would be considerable in a country where lifetime employment is valued.
In other words this kind of behavior wouldn't be viewed as all that surprising locally.
100% agree, but the opposite is what happens.
Mass layoffs -- unless the company is actually tanking and on its last leg, which isn't the case with any of the tech companies who have been doing this recently -- cause the share price to rise. CEO pay, or at least bonuses, are often tied to the share price.
So a CEO is rewarded instead.
To put salt in the wound, my understanding is the research on elective layoffs (ones that aren't forced by circumstances) indicates the outcomes are mixed at best, leaning negative.
So all this crap is just cargo-culting our current management paradigm, and/or execs cooperating to suppress wages and weaken labor, which had gotten a bit too uppity after Covid (that's one thing waves of layoffs like this do accomplish).
Probably: just leave out the full-of-shit sentence...
There's an Indonesian joke based on the word "responsibility" which is "tanggung jawab". "Tanggung" in this context means to carry the consequences, and "jawab" is to answer. One can say to a friend "We have to share this responsibility. I'll do the answering, and you'll do the carrying of the consequences."
It's simply pointing out that "I take full responsibility" is empty, meaningless rhetoric and serves no real purpose.
It's often offensively insincere.
I think a start would be to stop saying the phrase “I take full responsibility for this decision” if you aren’t also publicly taking a pay cut.
There’s no need for a CEO to bring themselves and their feelings into the conversation. It’s this weird attempt at empathy that fails, because the CEO isn’t making any sacrifices.
Just say that there are layoffs. Most rational people who have been in any business for more than a few years recognize them as an unfortunate part of the business cycle.
Agreed. But just say that. No need to pretend taking responsibility, which is defined as facing consequences when things go bad.
“As CEO, I’m truly sorry to those impacted. But I strongly believe that this change is what is needed now to make sure Dropbox can thrive in the future.”
Makes sense. "I take responsibility" conveys that they will also suffer consequences, which isn't true.
"I'm the sole person who made this decision" is probably closer what they are trying to say.
"Unpopular opinion", sure, how brave of you.
Simple: they sure love to talk a big game about responsibilities and taking responsibilities. Until it's time to actually do it. For the good of the company of course (if the company is in such dire straits, as the most highly paid employee - and probably not the hardest working one - why don't you take a big pay cut? For the good of the company of course).
That's what people don't take well.
It's amazing this still has to be explained.
> It sounds like people want executives to get some kind of punishment or pain as a consequence of laying people off.
No - as a consequence of poorly planning cost controls. It's not that the people don't need to be laid off for the health of the company, but that the executives who made the bad decisions don't get the boot along with them, in favor of more cautious or frugal leaders.
> Fire them? Then you would probably get a worse decision maker in the driver seat going forward
Why?
> who also didn't learn from experience of going through layoffs
That's actually a valid point. We don't commonly fire normal employees for mistakes. The counterargument is CEOs aren't normal employees.
Yeah I'm not sure people with compensation well into the millions get to go "haha, sorry, still figuring this out!"
Cool, can we pay you intern wages then?
[EDIT] To make this a bit more substantive: I think this is a sign both that we need to stop with this whole professional-managerial-class horse-shit, promote people who know how to do the actual work of the business, and reduce exec wages because the job's simply not all that damn special and the comp shouldn't be so high that only godlike-perfect performance could possibly justify it, because in truth nobody's that good at it.
Step one of this would be reducing M&A activity (hellooooo antitrust enforcement) and reigning in the power of finance, since letting Wall Street suits put their HBS frat brothers in charge of everything is at the heart of why this stuff's how it is.
Preach! The job is straightforward - lot of these decisions they make are very clearly articulated by LLMs. We need more businesses, more competition, not bigger businesses.
I think it's an outlet for general frustration with the justification for high executive compensation (and returns on capital, for that matter) often being "they have much more responsibility and risk" when the actual downside is typically nonexistent, and even if there are consequences, the outcome is something like "LOL still richer than any ten of you combined will ever be", i.e. the "risk" is all fake.
> "they have much more responsibility and risk"
Perhaps you've misinterpreted that statement? It is the board that takes on greater risk with executives as compared to other employees. The executives are given the keys to the kingdom, which means only an exceedingly small group of trusted individuals can be considered for the job. By the transitive properties of supply and demand, when supply is limited, price goes up.
The thing is, high executives have become a self-perpetuating class entrenched in corporate boards, this is the reason CEOs comoensation keeps skyrocketing, not supply and demand. And this entrenchment obviously also stifles accountability.
How does this self-perpetuating entrenchment not become a factor in what establishes the supply and demand, instead managing to exist as something off to the side?
They say "I take responsibility" and then.. don't take any responsibility. It's insult on injury.
How big of a bonus will this CEO get this year? Last year?
Why do people understand this phrase "taking responsibility" as some kind of admitting of fault? Maybe I'm missing something, but it seems neutral and could even be referring to positive future outcomes for the company.
Because the context is that 20% of their employees are now unemployed. The tone of the letter is also "this is a hard but necessary choice" and not "this is great news for dropbox!"
> As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change.
Because that's what it means to take responsibility. You're saying "I did this, and to the extent that it's a bad thing you can blame me".
I think Houston being a cofounder means the financial picture looks different. Last year he made $1.5M in total comp. Which is a lot in absolute terms, but cutting his pay to zero would only allow keeping ~6 of those laid off. OTOH, he owns 25% of a $9B company. His salary is a rounding error compared to the performance of the stock.
Not to be an apologist, but I bet Drew really does feel responsible. He’s not professional management, and he always acted like Dropbox was his kid, at least from what I saw working there. I’m sure this feels shitty to him, though it’s obviously worse for the people laid off.
True - it means he could transfer, say, a billion dollars worth of stock to the affected employees and still be a billionaire. If he actually felt all that bad about it, of course.
The point is words mean nothing from the C-suite, and are just tools to accomplish whatever labor/public relation goals they have.
You can make money by either reducing head count or coming up with plans that involves generating more money with existing workforce.
Obviously you as a CEO failed at doing second.
Now question is do you fire yourself and try to get a better CEO or you choose to fire 20% and generate more profits.
If it's up to the workforce they probably choose to fire CEO. But if it's upto the CEO he choose to fire the 20%.
Why can't the executive taking responsibility also take a pay cut and tighten their belt the way they expect the company to and the people who they've fired do?
Taking a hit on their giant salary seems completely reasonable to me. Having skin in the game makes people perform better in all sorts of cases, and I don't see why a CEO would be different.
Do you also object to sales reps or athletes making less money after a long period of performing poorly?
It's the grey goo of manager-speak. It rides both sides, but never truly picks one.
The other two options: blame employees(someone not you), or take some form of punishment as an individual.
I too do it sometimes, and I feel bad each time. I at least tell people what it is and that it's just the reality of the situation. I'm not gonna commit career suicide and jeopardize my family's livelihood but I also won't blame them. So I follow the meaningless middle road where the status quo mostly stays and we all at least learn from it.
Ah, you're only going to endanger the livelihood of your employees' families, most of whom have substantially less wealth than you. I bet the rest of your employees don't really care that you "feel bad."
At least they learned not to trust you, though.
I'm not responding in the context of layoffs nor have I fired people because of my mistakes luckily. That's a different story, and I was trying to explain to OP my take on it.
I'm glad to hear that, I apologize for misunderstanding.
Yeah that opinion is unpopular because it's deeply stupid.
“you would probably get a worse decision maker in the driver seat going forward, who also didn't learn from experience of going through layoffs” or you would maybe get a better decision maker who didn't have to layoff — or hire unnecessary — workers in the first place? Ridiculous speculation.
Responsibility without consequences just means failing upward. That's why we have a gilded executive class of people who are barely qualified to run a local Taco Bell franchise.
> But what would that even look like? A fine? That would probably make no practical difference, and would discourage them from making changes that need to be made. Fire them? Then you would probably get a worse decision maker in the driver seat going forward, who also didn't learn from experience of going through layoffs.
Well they're the one asking to "take responsibility" here, the fact that they claim responsibility yet nothing happens is exactly why people don't like this phrasing.
Also who the fuck else can be responsible anyways ? The cook ? The guy who mops the fucking floor ?
Yes, sometimes reductions are necessary. However, layoffs isn't the only way to reduce variable costs.
yeah, taking a personal financial hit on this would go some way to at least pretend to actually have tried preventing it. Not sure about this particular CEO's salary, but I wouldn't be surprised if you couldn't finance a few engineers' salaries by cutting the CEO's, without it even hurting very much.
Not saying it's enough, not saying that's the only way, but I find it peculiar that this seems to be unthinkable.
People come in two flavors: conflict theorists and mistake theorists.
Conflict theorists think that every event is a result of power struggler. So if someone gets hurt, someone must be punished for that.
Mistake theorists think that the world is complex and sometimes bad stuff happens because most people operate with good intentions most of the time. Often, that means no punishment needs to be metted out.
To mistake theorists, conflict theorists look like ideological blood thirsty savages. To conflict theorists, mistake theorists look like enemy troops.
This is a gross oversimplification but it always shocks me to see how much more conflict theorists there are on hn now than before. So many comments here blaming the CEO or capitalism, most of which are going off extremely scant information.
> It sounds like people want executives to get some kind of punishment or pain as a consequence of laying people off
Um... yeah. Yeah, that's pretty much exactly what I want.
I used to work at a Dairy Queen. One dude there had been working there for a couple years. Unfortunately, one shift his drawer came up a dollar short. Our cutoff was 5 cents - a nickel - over or under. He was immediately terminated, of course.
He cost the company one dollar. A Dairy Queen cashier making minimum wage is held to a higher standard of accountability.
A CEO should not be rewarded for recordbreaking layoffs with recordbreaking pay raises.
Genuine question: what do people want from a CEO in this situation?
What consequences do you want the CEO to face? A token reduction in pay? Being fired?
The latter. If you can not manage the company correctly and it leads to the job losses of hundreds of people not to mention the millions in salary that was wasted by their poor planning then yes they should be immediately relieved and not allowed to run any other company. They are clearly incompetent.
Considering dropbox is not facing some economic recession outside of its control we can only blame the CEO's incompetence.
I don't really get why layoffs mean that the company was not managed correctly.
Let's say you believe you have an opportunity that will double the value of the company, with a 30% probability, or cost the company 10% of it's value. This means it has an expected value of +21%. This is pretty good, and exactly the sort of thing shareholders want from their management. So you increase headcount and pursue the opportunity.
In the 70% scenario when that doesn't work, you have to downsize. Failure is not just possible, it's probable. That doesn't mean that the CEO mismanaged...they may have, I don't know the Dropbox details. But in the scenario where they haven't mismanaged, what do you want? Do you want companies to never take these risks in the first place?
> I don't really get why layoffs mean that the company was not managed correctly.
Probably the part where they very directly attributed the layoff to mismanagement.
> We’ve heard from many of you that our organizational structure has become overly complex, with excess layers of management slowing us down.
> [We're] designing a flatter, more efficient team structure overall.
When they hire as part of the push for that 30% chance, are they telling them that they have a 70% chance of being laid-off if the bet doesn't pay out?
If it's "just a bet" and not mismanagement, then we should tell people that, shouldn't we?
The reality is that these bets are only bets for the people getting hired/laid off, and they don't even know they are betting in the first place. Even worse because we're not talking about simply losing money here. Losing a job is many times a life changing event in real people's lives. It's not like someone betting on a stock.
That's why there should be consequences for the ones making those decisions. They get the most rewards, but none of the punishment. How's that fair in any shape or form?
I don't know the answer to this, but I don't think it really matters.
Employees have responsibility to due diligence their employers.
But at the end of the day, employment is at will. It's a risk we all take.
Most big tech companies did mass layoffs in the past few years. They are now fully recovered and posting record profits this week all with the same leadership. You are saying they are incompetent and someone else could have navigated this better?
Those profits could've been even higher if they hadn't overhired, then paid out massive sums in severance.
A company's profits will, without exception, be lower if they never take any risks.
Yes, they could have just not fired the people and have ridden the AI wave all the same.
Do you genuinely believe that the record profits are due to the layoffs, and not just because we just lucked out to enter a new bubble?
Yes, fired. Just like a head coach of a sports team.
It's always amazed me how much leeway and clemency leadership gets. I worked at a company that was always fairly intentional about their performance review process being a meat grinder, and they also did something that didn't look nearly dissimilar enough to good ole microsoft forced curve / stack ranking.
So if you were an IC and were on a project that failed (or even just didn't succeed enough), God help you. Many folks just quit when they saw a project going sideways, or tried to escape/transfer. Alternatively, people would report green statuses and hope someone else fell over first so they wouldn't be the root-cause.
Obviously this caused many problems. It was very hard to execute projects with lots of people or teams, and/or that took a long (>3mo) time. It came to a head when finally a major initiative missed another deadline "just barely" and it finally tripped circuit breakers and someone went in and did a full Inquisition. Yeah no the project was f'd and they basically just gave up ("pivoted") to an adjacent goal. Their official diagnosis/RCA was "people were too scared to report red, so everyone prettied up their status reports a bit, and that was compounded by each roll-up status report also prettying up the status.
Literally no leadership changes happened as a result of this. Then I got laid off. (Unrelated, just the big layoffs of 22. I was not directly involved in this, I was in big data and this was all happening in the main product infra stuff).
So yeah. Your project fails? Bye. But your f'd up performance grinder culture causes literally hundreds of people to behave so out-of-alignment with the actual company goals? Nah man stick around for 2 more years and leave at your leisure over some other petty squabble.
So head count can only ever go up in a company, never down, regardless of circumstances?
People make mistakes all the time, hopefully it's mistakes they learn from. You can't simply fire someone for being incompetent, unless it's so bad and beyond the pale.
> You can't simply fire someone for being incompetent
Lmao what? Outside of being absolutely skint and unable to make payroll, that's pretty much the only reason to fire someone (I mean other than misconduct, which is also a type of incompetence)
The other reason to fire them is that their services are no linger needed (ie a layoff)
What if managing the company correctly requires hundreds of people losing their jobs?
I understand the anger in this scenario as employees, but I don’t think doing layoffs means leadership is clearly incompetent. Running a company is hard.
Doing layoffs definitely says something about the company’s values and current standing, but I don’t think it necessarily means the CEO is bad.
> What if managing the company correctly requires hundreds of people losing their jobs?
It occurs to me that there is no failure of performance a CEO can produce and be held responsible for. Are these CEOs really so irreplaceable that when they bet incorrectly they can't be replaced?
20% of employees have been fired. The CEO directly cited mismanagement as the cause. And yet, its impossible to fire him because "its a learning experience" or "think of the upside!".
A CEO being fired does not mean the company falls into the abyss. The company still exists and can hire a new CEO. I'm certain there are plenty of fools more than willing to risk the livelihoods of 20% of Dropbox's staff in exchange for a mansion in Miami.
> Are these CEOs really so irreplaceable that when they bet incorrectly they can't be replaced?
That’s the thing though, another comment nailed this perfectly. If they made a +EV decision to hire more people, but the preverbal roulette wheel landed on 00, maybe it’s not a bad bet that they should be fired for.
It needs to be repeated until its acknowledged: "risk management" wasn't the reason given for the layoffs.
The explicit reason given was "economic headwinds" and bad organizational structure. If in your role as CEO you have left the company in a poor position to handle normal, cyclical slowdowns then you are a failure. If in your role as CEO you have produced an org chart which burns money and slows progress then you are a failure. You should be replaced. Period.
The same consequences that a person lower down the ranks would have.
For example, if I lead a team that fails, the team will be disbanded and I will be either fired or demoted. (obviously if there are external factors I/we might be reprieved )
If the CEO leads an aggressive strategy that doesn't playout, they rarely get fired and certainly don't get demoted.
At a minimum, don't say "I'm taking responsibility" when you aren't facing any consequences whatsoever. If an executive wants to talk like that, they best put skin in the game. Otherwise, shut up.
Meaningful reduction in pay, especially stock.
If they overhired so much the CEO has wasted a ton of shareholder money. Pay for performance, right? Perform poorly, you should expect less pay.
He should be fired.
If the company miscalculated, or mismanaged, to the degree that it suddenly has to cut 20% of its workforce in order to survive (or give shareholders what they want), then yeah, that's a pretty big mistake, and your head should be the first one to roll.
I bet you'd have a lot fewer CEOs calling for mass layoffs.
Step down. Forfeit stock/options/golden parachute.
They should face the same consequences as the people they are firing. Lose their health insurance (or pay COBRA), have a few months' worth of expenses in the bank, have to find a new job, that kind of thing.
I suspect you wouldn't see these comments if CEO pay was on the same order of magnitude as the people who actually work at the companies they run. Watching someone treat your livelihood like a toy, while also being rewarded with more money than any person will ever need, is a bit grating.
How about not getting a bonus? Last year he got around $1M in bonuses.
I ask this myself. What is the point of both doing layoffs, and then also firing the CEO? That next person will probably be worse, won't have the learnings of the layoffs, and would probably increase chances of layoffs happening again.
I expect interns to learn and CEOs to lead. If your decisions lead to mass layoffs then you need to lead the way to the unemployment line.
50% pay cut
putting an employee elected representative on the board
negotiating the layoffs and severance with employees (e.g., giving folks the opportunity to voluntarily take layoffs to reduce the number of involuntary layoffs).
Something like this, maybe?
https://www.cnbc.com/2024/02/13/nintendo-ceo-once-halved-sal...
I mean, this is actually taking responsibility for your decisions as CEO.
Whoa whoa whoa, he’s only taking responsibility for the decision.
... and the circumstances that led to it!
While still titling it “A message from Drew”
Word. If CEOs were to actually take responsibility, they would fire themselves.
I mean yeaaa... it's just work. In big corporation. What do you expect from them? He will get bonus for "savings".
Resign? That's the obvious answer right?
I take full responsibility for completing task assigned to me. So resign?
Yes! He failed.
What consequences would you like CEOs to take on when they have to do layoffs?
Resignation. If they made a big enough blunder to need to lay off 20% of their staff, they're not capable of leading the company.
Why do we think they'd do any better next time if there are no consequences to their poor leadership?
Have you ever managed a complex, dynamic, changing system and found that the optimal size based on current conditions was 20% less than it was at some prior time?
I can think of all sorts examples.
Why can't the CEO share the fate of laid off employees? They did nothing wrong either.
The answer to your question is definitely no. Nobody who has ever ran a business for long would think that every layoff is due to CEO incompetence.
Why is it a blunder? Do you think only poor CEOs face downturns or overhire?
And if a company hires too many people for a few years and then right-sizes, isn’t that better for the economy overall than if they simply stayed small the whole time? They still paid salaries for those years and added to the overall level of employment.
Do you want a system where CEOs are hesitant to hire? Or where they’re afraid to right-size the workforce and instead run the whole company out of business?
There’s literally zero logic to your position, just feelings and Monday morning quarterbacking.
By that logic, Mark Zuckerberg is a poor leader and should resign. I think most investors would disagree with that assessment.
Maybe he should, Meta's main product has peaked in their biggest markets, and his last massive bet went nowhere. He may not be the right person to lead the company at this point.
maybe antiquated, but seppuku is considered honorable
Your right. He should commit ritualistic suicide by slashing his belly with a short sword.
Stack ranking is back masquerading as (bi) annual layoffs
It's more fun now though, because instead of being tied to individual performance, you need to make sure you're on a product team that is going to survive the cuts.
That was actually the norm prior to 2010. Tech was never supposed to be a stable career due to inherent innovation risk
Also prior to 2010 you wouldn’t be a senior engineer after 3 years of experience making $180k/yr. The staff and principal engineering roles paying <$100k are still super safe jobs
>As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change.
But I will be glad to see that my salary and bonus increased a bit this year :)
Crowded space, macro headwinds and too much middle management. It was difficult to foresee in 2020, but regarding the macro headwinds (elephant in the room) perhaps some billionaires should adjust their donation patterns:
https://www.forbes.com/sites/michelatindera/2021/02/17/here-...
I don't understand why people are still using dropbox. pcloud is one time payment and much less expensive. Why would people still use dropbox?
Lifetime licenses for cloud services is the worst deal imaginable. Even if you're not getting billed, you still cost the service money to continue using it. It's basically the same as a freemium model, except when you get rug pulled later, you're also out the money you paid on a "lifetime" license.
Plenty of examples of how long "lifetime" licenses really last in the modern era. See TeamViewer for example.
rsync is free why would anyone use anything /s
I'm surprised that a company like Dropbox needs so many employees. ~500 being 20% implies the total workforce is 2500 people. HOW?!
I feel like the product could do just fine with 100 employees.
I’m 22 and work on a 3-person team so it’s hard for me to imagine why a company would more than 4 or 5 total employees.
Software is complicated. If you keep writing new functionality, maintaining it slows down your ability to write more new functionality. Eventually if you want to ship more new features and not wait an extraordinary amount of time to do so you need more people. This doesn't scale super well so your headcount grows non linearly.
Companies develop a lot of bespoke features used by a handful of their customers. It might not be obvious to the average person what all of those features are. Additionally just scaling software to continue running with more customers using the product is not a trivial task as well. Adding more servers or making servers beefier only works until it doesn't.
> I’m 22 and work on a 3-person team so it’s hard for me to imagine why a company would more than 4 or 5 total employees.
You're not wrong.
I've seen companies with less than 10 employees make around $9M ARR within the first 3 years, and some with around 50-100 employees that can't even reach 100K ARR.
The smaller your startup the more faster you can go, Dropbox's main issue is that they haven't implemented Founder Mode yet. I am willing to bet that that there are jobs in Dropbox that doesn't need to exist.
Looks to me, they started to over engineer their product, just for a storage platform, you dont need 2500 people.
Don't worry your imagination will develop over time.