Not Exactly. See there are two different types of shares. Voting shares and Normal shares. The Voting shares have substantially more voting power than the normal shares. So as long as the founders have a majority of the Voting shares, the other investors do not hold much power in the company apart from their High stake. Yes it is true that they may sell those shares which might lead to a big market cap loss for the company, but still would not force the company to make a decision.
@@samarthnasnodkar5965 well, i remember that google's controlling stake (if we are talking about voting power) is owned by its founders, but still, they do what investors tell them to do
@@samarthnasnodkar5965 Exactly. 100 years ago we banned this practice where people could own type "1,2,3,a,b,c or whatever you want to name them." Most of the publicly traded shares are NOT voting shares, you can't just BUY your own way into owning google since most of the founders and those voting shares are not available on the most common investment platforms. You actually need to know someone or be executive C-suite level to even have the option to get these shares. The practice was banned due to inheritance and monopolistic trends that were happening back then. We need to revisit and reinstate reforms that have been neutered.
@@JJzerro Because investors are the ones that make their shares valuable. Google doesn't even pay a dividend (and the dividends paid by most tech companies are pretty low) and voting rights alone aren't worth anything. When the investment companies say the stock is overvalued, they're encouraging their clients to sell or selling their shares themselves. Hence the mere threat of this can cause action.
Thanks for indirectly teaching us how we should act if some of us actually get into some of those company decisions (positions of power) at some point during our life.
what is up with investors like, something is making them millions and they cant even look at the thing to see why it's making that money and try to understand it? how can someone be so ungrateful
They're sociopaths, that's what. It's what enables them to make so much money and have zero remorse for whether they ruin businesses and lives in the process. And since they're outsiders with no emotional attachment to whatever they invest in they can easily shift their money to another profitable venture if they're driven out of this one.
they perceived that it worked out for twitter since they started the layoffs first (it didn't), and because ROI is the only language they speak, they wanted to copy twitter's model to their investments. when it comes to understanding the company they are as dumb as a brick, maybe more.
Investors like these normally don't stick with the company over the long run. They're just trying to pump up the stock price and look for a convenient timing to exit. The long term health of the company means nothing to them.
I don't' believe this at all, there are a lot of idle workers, who just show up for jobs for a paycheck. I've been laid off twice and I've made so much more money getting laid off then quitting.
One cost you forgot to include in letting someone go, even if they cost an effective $400k/year in salary/benefits/overhead, is how much it costs the company to hire and TRAIN the next person. Trying to spin up a new employee to replace the attrition alone is a losing battle. It takes up the valuable time of otherwise productive senior mentors to guide the new employee. And the new person, no matter how smart they are, will not be useful for the first N months (where N is large). So you have to offset the "cost savings" of letting someone go, with the "cost incurred" of bringing on new people in the future. It's short term vs long term. There is very little to gain in letting a fully trained person go. Unless they are truly dead weight and sand bagging their whole work day.
Most people fail to see another aspect of layoffs. Companies do it to frighten the remaining workforce into commiting more seriously in their work performances or risk being the next victims the future.
Remove other people's certainty and your own certainty is assured. When people are uncertain of reality, beneficial (to the owner) negotiations can happen.
Layoffs are an opportunity for them to get rid of their lowest performers. Most tech companies do this even during a good year, they will cut the bottom 10% of performers. This ensures they have the best talent.
I don't know on what basis you are evaluating but restructuring of teams based on projects they are currently doing is also an important metric. Like when layoff happen they might reduce workforce in non IT department but increase workforce in some critical department like AI. So that logic of freezing hiring and not laying off is not correct.
Yeah, I understand where you’re coming from and that’s a valid concern. Companies could hire strategically to rearrange labor as needed but that would of course take longer and cost more. But it would also give them better PR and potentially employee loyalty as well. So, there’s def pros and cons to both sides.
it’s not the money. It’s the message. If you exile people from the island from time to time, it creates the illusion that they’re streamlining. Perception is reality.
it feels really bad getting exclued from the job market, just because i don't have a social media presence (AKA: am not a social media zombie\addicted).
@@DrPizza-mn6kkIKEA did this. It’s common in Sweden. They fire everybody and tell them to reapply and rename all the roles to something different. I presume the worst apples don’t get re hired. Not sure how they got away with this.
Have experienced the same thing. Was laid off in 2015 and two months later several recruiters contacted me for the same position i have been released of. Even paid 10-15% more than before. Can't understand it but teached me the valuable lesson of not being loyal to any big company. Didn't go back though, had my sails already set for new waters. Don't like being fucked over and trust is broken for me already.
A lot of the layoffs were for jobs not directly contributing to company development such as HR, Advertising, IT. Most of these companies still hire engineers & developers during layoffs!
One of my relatives is a software developer for Google, and I can vouch for this. Neither he nor anyone else on his project team were laid off. They are cutting non-essential employees, not slashing positions across the board. ✂️
This is a good point, realistically the engineers and developers are the most important for company growth. HR and others are a bonus during times of prosperity!
@@ciaran3409 Foolish statement. HR allows the company to avoid costly lawsuits and hire people. Payroll ensures people actually get paid. Legal protects the company in court. All are vital, not just "nice to haves." You can't run a company without these functions.
From what i heard somewhere else, I haven't researched it so take it with a grain of salt. A few companies have bonus teirs so you get like a 300k bonus over 5 years, they are structured so they get 10k the first year, 20k the second year, 30k the 3rd year 100k the 4th year and 140k the 5th year. This was listed as a bit of the reason why some of these companies were trying to push people out after 2/3 years.
The reason wasn't never to save cost. They have people/departments that needed to layoff but they didn't do it due to bad press. Now with all the economy downturn they can do it and excuse to do external reasons. Also the people you already have may not have the expertise you are looking for so a hiring freeze is not an option.
16 weeks for Facebook included the WARN period which they gave out 2 months before layoffs. Employees were still working during those 2 months so their severance was closer to 8 weeks + 2 weeks for every year.
How do we know they are getting these severance packages? I think 90% are outsourced Indian programmers and not real employees and don’t get any package. I don’t even understand why they exist. No such thing in Sweden. 1 month notice and adios. Those Amazon warehouse workers too? Seriously doubt it.
I can confirm at Google most people didn't, and couldn't work during warn (no building and corporate access 60 days in California and Seattle and 90 on NYC) on top of their 16 weeks and tenure, new hires walk away with 5.5 month off
@@LogicallyAnsweredI don’t think this reason works for Zuck. He blew billions on Metaverse. He is above investor influence. Like Elon. They wouldn’t dare go against Elon.
If a bunch of big money investors decide to sell and publish articles on why they’re selling, it makes a meaningful hit on share price and creates a downward spiral with analysts downgrading the stock and suddenly developing bleak outlooks for the company even though not much has materially changed. The share price matters a lot to the company because many employee’s compensation is derived from restricted stock units (I.e free shares that are granted on a quarterly basis). A low stock price craters employees’ compensation and makes them leave, which is problematic too. So they took drastic measures to avoid that death spiral basically. Not saying I agree with it, but I think it helps if people know the stakes.
Another banger video, great work. You know maybe someday you can tell your process and how you manage to learn all this stuff. The way you break it down is great.
I'm running out of ways to express how humbled I am by the depth and quality of every video this channel has produced during the past month. You make every professor (self included) look like an ignorant toddler. How do you even do this???
I don't run a big company but I do run a small company and there is a really simple reason outside of investor meddling as to why you want to lay off people. Some people are just not got for a company; a few bad apples really do ruin the bunch. It's not a bad idea just to pay bad employees to go away.
Not so easy to cut bonus in Europe though ^^. For instance in Switzerland with 5k google employees, the law says that if you receive a bonus for multiple years, that becomes part of your expected salary. So technically most googlers might well ask to receive it ;)
A lot of layoffs were done to cut expenses and show profitability to share holders. Cutting head count is one of the quickest ways to show profitability.
It's not just one cause. Pressure from shareholders is a big one but it's not the sole reason layoffs are being done. Another big reason is to workforce optimization. Over the pandemic, a lot of these companies went mad with hiring, filling positions or roles that weren't needed (or are no longer needed), not to mention picking up a lot of underperformers or bad employees in general. And the best time to do layoffs is while the company is still making a profit, with advertising revenue already taking a hit and more hints of a recession around the corner. Not to mention the pandemic being over and people spending less time online. The generous packages are to avoid lawsuits, since laid off employees sign away their right to sue as a condition for receiving the payouts. And these nonrecurring losses are used to offset income (in a year when the company is still making a yearly profit), so they're able to avoid corporate taxes that they would otherwise pay. In short there are a number of causes and contributing factors besides the one mentioned in this video.
You're missing the key difference. Companies can choose who to lay off, but not those who leave voluntarily. Layoffs target underperforming employees, while it's usually the high performers who leave voluntarily.
LOL you think 6 months of salary is a high severance!! I worked in the HR and we were firing people all of time. Normally they would get one year of salary at least. Some would even have packages of almost 3 years of salary. And to answer your question. The company saves a lot of money. After two years there is a profit from the layoffs and that is without considering the downsizing of office space. And you are considering that the people getting fired are people they want to keep, but half of the layoffs are just employees they want to get rid of, they are not good matches for the company and this is an opportunity to replace them.... yes, they are replaced most of the time for cheaper employees or because they are going to buy another company and need to reduce the FTE upfront, and then do it all over again when they get the new employees and need to bring down the FTE after the merge.
Freezing hiring doesn't work because only the talented people who can actually find better opportunities would leave, after the freeze period you would have only the bums that can't really help the company. The layoffs target people identified as not sufficiently beneficial to the company.
My company recently went through layoffs, but we are a company that runs coding bootcamps. The layoffs in tech are hurting our industry big time. No one wants to get a tech job when all the news is about how hard the market for big tech is. So our enrollment is less than half of what it should be. No press is bad press *for them*, but that doesn't mean that there aren't far reaching consequences
For companies that live and die by stock price performance, these layoff announcements make sense. How they actually play out is a different matter. I can't recall seeing any major projects cancelled.
- It's Not About Money, It's About Sending A Message ( to the investors that they can buy the stock as the company has now layoff , the investors do not care if it really affect the bottom line if the message make new people consider the company as an opportunity to invest thats all that matter. )
As an HR professional, I can tell you this is at best a half-truth. First, layoffs are rarely across the boards cuts. Most companies cut more people in certain divisions, departments etc than other areas (Ex: Sales departments tend to be lower on the list for lay-offs because that department makes you money. Another example is a division generating high value for a company than a division generating little value). Next, individual performers. If you are a top performer in an average department your less likely to get the ax then an average performer in an average department. Other factors include if your department has more highly compensated employees than a department in a department that has much lower salaries because companies can cut more cost with fewer people then in departments with people making far less. Next is on the attrition side. Companies don't lose people equally through all departments and divisions. Some departments and divisions have far less turnover than other departments. We all know this to be true because we have seen it. Crappy managers that are creepy or bully their workers lose far more people that managers who respect their employees and their employees think highly of. No one wants to work for a horrible boss. This matters because cost savings from attrition because of things like hiring freezes are going to happen faster in departments with horrible bosses who employees quit faster. I don't want to make this sound like a good thing because it is not. HR tends to scrutinize departments and divisions with higher attrition with no obvious reasons. We want to know why. However, we do this through some interesting ways using data. Come layoffs it is far easier to let go those managers in those departments with easier justification. Additionally, companies are always hiring but again not across the board. As business needs, objects, etc, change, so do which departments get more (or less) headcount or which departments get headcount increases or replacements, faster. This all means layoffs, attrition and hiring are far more complex. As for the CEO making the cuts, not quite. They sign their name. The actual determination of departments, divisions, individuals etc. Is done mostly by the HR department accounting department, with the VP of Financials, CFO, COO, VP of HR and CHRO and those that report to them making those decisions based on most likely input from various individual managers across the those divisions/departments targeted for layoffs. It is a team effort.
Why in the world would you use revenue to contextualize the savings from layoffs? To be fair you need to use a profitability metric like free cash flow.
I'd like to elaborate on one point you made there: Rightly, or wrongly, attrition is said to get rid of the ones you want to keep. While layoffs are said to get rid of the ones you don't want to keep. Conversely, on the whole, domain knowledge is more likely to be easy to manage/keep with attrition than layoffs because of goodwill.
Just got laid off from KPMG I only got 4 weeks pay, but I have 140 hours of accrued PTO. Considering that we are not going to have much productivity over the next two weeks, I figured they are spending about 22k to let me go.
The layoff US$146,000 × 4.63 = RM$675,980 × 3.96%= RM$26,768.80÷12 months= RM$2,230.73 a month. No need to work in Malaysia. Can retire at minimum spending, you can apply another tech Co. Who give same layoff.
4:35: "A lot of these people are rich enough to retire before they are thirties" That was the funniest line in the video. No. I've been working for Apple for almost 10 years now. I'm nowhere near retirement. Nobody leaves Apple to retire unless you're 65. (And I know people who've reached that age inside Apple). They accumulate stocks and decide to take the risk in a startup. If you come back within 2 years to your employer, you can resume your benefits exactly where you left them. Vacation. 401k. etc.
Hmmm. Do you work on the tech side of apple in a tech city and have you been holding onto the stock comp? If so, 10 years should’ve made you a multi millionaire. Apple has 15xed over the past 10 years. So even if you were only getting stock comp of $20k a year in your early days, that translates to $300k per year in stock comp alone today.
@@LogicallyAnswered I'm not a manager. But I'm in the highest tier of Software Engineer. Just to give you a sense of my total compensation, I pay six figures in federal taxes per year. (And I still have to pay California tax on top of that.) I'm a multi-millionnaire. I own a house. I own more than 1 million worth of US$ of Apple stocks. But here is the thing. It doesn't make me rich in Silicon Valley. I'm still very middle class. The cost of life is so high.
Weak video, little research, little experience or understanding of management in big tech: 1) those leaving are the top talent, getting competitive offers; the laziest just lock in for life and enjoy the free food and massages 2) investors rightly saw that the swelling of headcount and employee costs had no correlation to revenue growth. 3) Twitter as an example reduced staff 80% and operate the same product and a faster new feature roadmap 4) Pichar stated that they're making a cultural shift to actually working hard. Less people are required to do that 5) Layoffs actually get people coming into the office, working hard and competitively, proving their value etc.. not that negative at all - the best talent won't be fired, the rest stop being complacent
SHOCKER another video where you just say random numbers and a bunch of people take it as fact! WOOOOW. Literally generalizing every company saying they lay off for X reason. Cause you saw some investor critique people, then you say other people who are on the board of X company think the same. So that is the reason. No again you took a small thing from one company and applied to all of them. The only logical answer on this channel is the unsub button, after people realize how beyond surface level this channel is. And its based on BS
You are not into corporate finance, are you? Do not confuse revenue with net revenue or profits. $8.4 B of savings is equivalent to a third of Meta's profits for the entirety of 2022. That is huge. Enough to take the company's multiples to a point where it justifies a way higher valuation, and thus, can get an even higher benefit from the stock market. And no, it's not only big investors who benefit from the layoffs, it's also small investors, and even employees, who receive stock as compensation.
You do realize that not every employee can do every work? There is nothing called a general purpose engineer. Someone who has experience in hardware engineering can't just start working on an Android app after 1 month of training. It's equally damaging for the employee's career growth as well. People should continue doing what they are good and interested in. (except Php developers😅)
Tci is activist hedge fund owning 0.27% which does these kind of things usually, highly unlikely the reason of layoffs. The simple reason is pandemic fueled growth and hiring turned out to unsustainable and the forecasting simply changed. Nothing more than that.
Only Wixpool offers good returns from investments in DEX platforms on reliable networks like Bitcoin. And I dont see the point of working with risky assets...
You’re not taking into account the skills and experience. For example, Meta have been investing heavily in VR and hired a lot of people from that space. If they pivot to AI they need to reduce the number of people with VR experience and replace them with people with AI knowledge. These are cutting edge skills, you can’t just send your people on courses to be retrained.
The basis of your "real" reason for layoffs is ambiguous. It is akin to saying god (the rich investors) wills it, for no good reason other than whims and fancy. I dont accept that. If your thesis is the rich investors, then please explain why they do it.
So the thing is right now your argument is based on a calculation that takes into account severances. But what is the law that requires you to even have severance? Once layoffs start to become more regular, and tech workers start to become hired more on contract, those bonuses are going to shrink and evetually disappear altogether. At which point layoffs are going to be much more easier and affordable.
I have known employees where getting rid of them was a major morale and productivity boost, and well worth any compensation. I don't want to know how dysfunctional a department has to be to apply that strategy on a larger scale, though.
Those who often make these decisions to execute mass layoff procedures often never have to deal with the consequences , often they are incentivized to do so through thier remuneration. Often a sham review will be done by a consulting company and all they will do is offer a solution to an executive team to reduce head count so as to been seen to have delivered something. Layoffs usually di not happen because companies don't have the capacity to keep or re-distribute thier human resources but rather because some executive who has just done his MBA has an ego trip.
Hm, but this also depends on which departments suffer the most attricion vs what departments do they want to purge. Simplistic example: let's say you want to purge the QA and the Customer Service departments but the biggest portion of the turnover is in the dev teams. You would still need to replace/hire people for the dev teams and freeze hiring to QA but if their attricion is slow, you just lay them off to not wait the excessively long time.
And things like this are why I have never worked for a publicly traded company my entire life. The "owners" mostly have no idea what is actually involved with doing the job and are in it only for the maximum amount of profit. As for the massive jump in cost of a house verse income, that is actually drastically different on a state by state and city by city basis. I live in Lafayette, Louisiana (I know I know, Louisiana...) and the average cost of a house in the city is almost exactly 4x the average household income. The issue with buying a house has less to do with some nationwide jump in the cost of a house and more to do with a few states and locations drastically throwing off the averages. If you are willing to move to a place with a reasonable cost of housing than you can afford a house. On a related note, most places with reasonable cost of housing also have reasonable cost of living (food, utilities, etc). Compared to places like California and New York, you can make half the money and still have a higher quality of life with more money to spend on things you want to because of house much cheaper housing, food, and utilities are. We are talking often on a quarter or less. Using after tax income, making $100k a year when it cost you $80k leaves you with $20k for whatever, while making $50k a year when it cost you $20k leaves you with $30 for whatever (and you are buying your home instead of renting). Those numbers look even more out of whack when you look at them before taxes, since the places where you have to make so much more money have a far higher state tax rate and you end up in a higher tax bracket so have even less take home pay. When calculating where you should live, take the "Average Cost of Living" for that area, add in how much you want for extra (fun/hobbies/savings/etc), and divide by the combined tax rate. The actual 'value to you' of a higher salary in many parts of the country is actually less than a lower salary in other parts of the country. Finding a job in an area that has a high 'value to you' and a reasonable housing market will let you live the American dream.
I used to be able to get a job in about a week. Now I get a response 1/100 applications submitted, and of that I have yet to be able to get a position. Been looking about 5 months.
Curious, does the author of this video have experience working in business or tech leadership? It’s easy to say the solution is simple if you’ve never tried to solve it yourself.
I think the tech companies are tired of dealing with gen z assholes and people wasting their time while on the clock. I would hope they would slim down inessential staff like DEI departments and personnel
Meh. If the "My day working at google" tiktoks were any indication, the people they got rid of aren't the skilled software developers that are leaving on their own
I wonder where you got those vidoes where code writes itself on the screen like at 8:35. Or people touching random keys just to simulate that they are typing something.
@logicallyanswered I've noticed more and more that the beginning of your videos starts abruptly and the opening sentence is clipped. For this upload, the word "Tech" was clipped off just enough to where I could barely make it out. Just an FYI..
Hey, also from Ghana. Ita not a good package. 6 months is the amount of money you're required to have in your emergency fund, in case something happens, so it's just a kindness if you didn't prepare. And with so many people being put on the market the time to get a new job may be longer than 6 months.
🗣️Amazon tech is so bad . 🗣️Really? How bad is it ? 🗣️Amazon tech IS SO BAD, it makes my 1980's Texas Instrument Computer look like high end (¿Quantam¿) Apple running on Dark Energy.
Dont want to be rude i love your content but after watching you for a while something just feels too repetitive with these videos, maybe the editing and the similar stories about tech giants, i would love to see some more effects besides random business people clips or stock looking footage. But still thank you for the knowledge!
@@LogicallyAnswered Yes! My view is that as people like johnny harris and MagnatesMedia grows, it seems like the gap between well build journalists/ youtubers and smaller creators is getting bigger and biggers. Even if the content you make should always be based on what you think you can create (as the writter/researcher)...What i liked that was different from the regular FAANG/big tech content is the videos you made for the CCP drink and the FBI arrest on piratebay or you can do a few more about other similar products and their Controversies, another piece of content i could suggest is target more international viewers by making videos on the balkans and their historical downfalls or how they sell their own public sectors for money that doesnt go back to the goverment same for slavic countries and how their billionaires got their checks, all in all the world not everyone sees and hears about if they dont live in such countries (these countries have a lot of human traf and dra*g issues so i am sure you can find stories to talk about )
When I was disabled and had to retire I got 3 months full pay 3 months half pay and 3 months half pay as I received SSD and my accidents settled so I'm loving life now$$$$$$$.. But I did miss working and retirement is boring as hell, no pressure no deadlines no stress boooooring!! I'd work for Amazon just to quit. 😜 But I used to say I thrive on pressure.😱
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This makes me understand why some companies like Epic (the ones that make medical software), Valve, and others may opt to avoid being publicly traded.
Not Exactly. See there are two different types of shares. Voting shares and Normal shares. The Voting shares have substantially more voting power than the normal shares. So as long as the founders have a majority of the Voting shares, the other investors do not hold much power in the company apart from their High stake. Yes it is true that they may sell those shares which might lead to a big market cap loss for the company, but still would not force the company to make a decision.
@@samarthnasnodkar5965 well, i remember that google's controlling stake (if we are talking about voting power) is owned by its founders, but still, they do what investors tell them to do
@@samarthnasnodkar5965 Exactly. 100 years ago we banned this practice where people could own type "1,2,3,a,b,c or whatever you want to name them." Most of the publicly traded shares are NOT voting shares, you can't just BUY your own way into owning google since most of the founders and those voting shares are not available on the most common investment platforms. You actually need to know someone or be executive C-suite level to even have the option to get these shares. The practice was banned due to inheritance and monopolistic trends that were happening back then. We need to revisit and reinstate reforms that have been neutered.
@@samarthnasnodkar5965but it's still federal law that they must attempt to make a profit where ever possible.
@@JJzerro Because investors are the ones that make their shares valuable. Google doesn't even pay a dividend (and the dividends paid by most tech companies are pretty low) and voting rights alone aren't worth anything. When the investment companies say the stock is overvalued, they're encouraging their clients to sell or selling their shares themselves. Hence the mere threat of this can cause action.
Thanks for indirectly teaching us how we should act if some of us actually get into some of those company decisions (positions of power) at some point during our life.
what is up with investors like, something is making them millions and they cant even look at the thing to see why it's making that money and try to understand it? how can someone be so ungrateful
😂
They're sociopaths, that's what. It's what enables them to make so much money and have zero remorse for whether they ruin businesses and lives in the process. And since they're outsiders with no emotional attachment to whatever they invest in they can easily shift their money to another profitable venture if they're driven out of this one.
they perceived that it worked out for twitter since they started the layoffs first (it didn't), and because ROI is the only language they speak, they wanted to copy twitter's model to their investments. when it comes to understanding the company they are as dumb as a brick, maybe more.
Investors like these normally don't stick with the company over the long run. They're just trying to pump up the stock price and look for a convenient timing to exit. The long term health of the company means nothing to them.
I don't' believe this at all, there are a lot of idle workers, who just show up for jobs for a paycheck. I've been laid off twice and I've made so much more money getting laid off then quitting.
😭 the video stopped so abruptly "I'll see you guys-" i usually lip sink the outro so it was noticable lol. Great vid tho!
Hahaha, oops
Sometimes these companies get so bloated that workflows benefit by smaller workforce
One cost you forgot to include in letting someone go, even if they cost an effective $400k/year in salary/benefits/overhead, is how much it costs the company to hire and TRAIN the next person. Trying to spin up a new employee to replace the attrition alone is a losing battle. It takes up the valuable time of otherwise productive senior mentors to guide the new employee. And the new person, no matter how smart they are, will not be useful for the first N months (where N is large). So you have to offset the "cost savings" of letting someone go, with the "cost incurred" of bringing on new people in the future. It's short term vs long term. There is very little to gain in letting a fully trained person go. Unless they are truly dead weight and sand bagging their whole work day.
Most people fail to see another aspect of layoffs. Companies do it to frighten the remaining workforce into commiting more seriously in their work performances or risk being the next victims the future.
This information is very important. Thank you for sharing it!
Remove other people's certainty and your own certainty is assured.
When people are uncertain of reality, beneficial (to the owner) negotiations can happen.
Layoffs are an opportunity for them to get rid of their lowest performers. Most tech companies do this even during a good year, they will cut the bottom 10% of performers. This ensures they have the best talent.
If that's the case why are the executives and CEOs still there.
I don't know on what basis you are evaluating but restructuring of teams based on projects they are currently doing is also an important metric. Like when layoff happen they might reduce workforce in non IT department but increase workforce in some critical department like AI. So that logic of freezing hiring and not laying off is not correct.
Yeah, I understand where you’re coming from and that’s a valid concern. Companies could hire strategically to rearrange labor as needed but that would of course take longer and cost more. But it would also give them better PR and potentially employee loyalty as well. So, there’s def pros and cons to both sides.
it’s not the money. It’s the message. If you exile people from the island from time to time, it creates the illusion that they’re streamlining. Perception is reality.
it feels really bad getting exclued from the job market, just because i don't have a social media presence (AKA: am not a social media zombie\addicted).
So we know who really rules the world.
Can retire in $400,000
It is if you can find a new job immediately
of course its worth it. most of those jobs dont' do anyting
my former company did a massive layoff at the beginning of the pandemic, and after 2 months they were hiring again for the same roles... (IT sector)
So stupid right?
@@LogicallyAnsweredIndeed stupid
@@LogicallyAnswered IMO, yes, they only did it to please the stakeholders, but they destroyed morale
@@DrPizza-mn6kkIKEA did this. It’s common in Sweden. They fire everybody and tell them to reapply and rename all the roles to something different. I presume the worst apples don’t get re hired. Not sure how they got away with this.
Have experienced the same thing. Was laid off in 2015 and two months later several recruiters contacted me for the same position i have been released of. Even paid 10-15% more than before. Can't understand it but teached me the valuable lesson of not being loyal to any big company.
Didn't go back though, had my sails already set for new waters. Don't like being fucked over and trust is broken for me already.
A lot of the layoffs were for jobs not directly contributing to company development such as HR, Advertising, IT. Most of these companies still hire engineers & developers during layoffs!
Yeah that’s true
One of my relatives is a software developer for Google, and I can vouch for this. Neither he nor anyone else on his project team were laid off.
They are cutting non-essential employees, not slashing positions across the board. ✂️
This is a good point, realistically the engineers and developers are the most important for company growth. HR and others are a bonus during times of prosperity!
@@ciaran3409not all. Like those twitter employees who worked once a month or something. In big companies nobody notice you do nothing.
@@ciaran3409 Foolish statement. HR allows the company to avoid costly lawsuits and hire people. Payroll ensures people actually get paid. Legal protects the company in court. All are vital, not just "nice to haves." You can't run a company without these functions.
From what i heard somewhere else, I haven't researched it so take it with a grain of salt. A few companies have bonus teirs so you get like a 300k bonus over 5 years, they are structured so they get 10k the first year, 20k the second year, 30k the 3rd year 100k the 4th year and 140k the 5th year. This was listed as a bit of the reason why some of these companies were trying to push people out after 2/3 years.
Amazon does something similar to do with stock vesting. The majority vests in year 3 and 4 but most people don’t make it past year 2
The reason wasn't never to save cost. They have people/departments that needed to layoff but they didn't do it due to bad press. Now with all the economy downturn they can do it and excuse to do external reasons. Also the people you already have may not have the expertise you are looking for so a hiring freeze is not an option.
16 weeks for Facebook included the WARN period which they gave out 2 months before layoffs. Employees were still working during those 2 months so their severance was closer to 8 weeks + 2 weeks for every year.
Ah, those tricky rascals
How do we know they are getting these severance packages? I think 90% are outsourced Indian programmers and not real employees and don’t get any package. I don’t even understand why they exist.
No such thing in Sweden. 1 month notice and adios.
Those Amazon warehouse workers too? Seriously doubt it.
I can confirm at Google most people didn't, and couldn't work during warn (no building and corporate access 60 days in California and Seattle and 90 on NYC) on top of their 16 weeks and tenure, new hires walk away with 5.5 month off
no one at these companies worked during their WARN period
The WARN period is only for Europe
It's always the shareholders that ruin our favourite companies
favorite? Nah
@@ElNegus9985sometimes your favourite. Think of Blizzard or the horrible launch of Cyberpunk 2077
imagine getting laid off, looking for jobs, sees the company that laid you off is hiring, applies, gets the same job, repeat 😂
No, somebody younger gets it.
@@ebx100not necessarily, young or older as long as they’re more productive will be kept
If outside investors are the reason for the layoffs, why did Alphabet cave? I thought Larry Page and Sergei Brin held a majority of the voting power.
They do, but they don’t exactly do much with that power nowadays
@@LogicallyAnsweredI don’t think this reason works for Zuck. He blew billions on Metaverse. He is above investor influence. Like Elon. They wouldn’t dare go against Elon.
If a bunch of big money investors decide to sell and publish articles on why they’re selling, it makes a meaningful hit on share price and creates a downward spiral with analysts downgrading the stock and suddenly developing bleak outlooks for the company even though not much has materially changed. The share price matters a lot to the company because many employee’s compensation is derived from restricted stock units (I.e free shares that are granted on a quarterly basis). A low stock price craters employees’ compensation and makes them leave, which is problematic too. So they took drastic measures to avoid that death spiral basically. Not saying I agree with it, but I think it helps if people know the stakes.
Another banger video, great work. You know maybe someday you can tell your process and how you manage to learn all this stuff. The way you break it down is great.
Thank you Nelvoid! Maybe
I'm running out of ways to express how humbled I am by the depth and quality of every video this channel has produced during the past month. You make every professor (self included) look like an ignorant toddler. How do you even do this???
Hahaha, you’re way too kind :)
@@LogicallyAnswered You're way too smart.
I don't run a big company but I do run a small company and there is a really simple reason outside of investor meddling as to why you want to lay off people. Some people are just not got for a company; a few bad apples really do ruin the bunch. It's not a bad idea just to pay bad employees to go away.
A lot of the layoffs were from specific projects that were canned. Also a lot of job postings are there to “look” like a company is still growing
So rich clueless suits making decisions without full knowledge. Yeah it tracks.
Not so easy to cut bonus in Europe though ^^. For instance in Switzerland with 5k google employees, the law says that if you receive a bonus for multiple years, that becomes part of your expected salary. So technically most googlers might well ask to receive it ;)
A lot of layoffs were done to cut expenses and show profitability to share holders. Cutting head count is one of the quickest ways to show profitability.
It's not just one cause. Pressure from shareholders is a big one but it's not the sole reason layoffs are being done. Another big reason is to workforce optimization. Over the pandemic, a lot of these companies went mad with hiring, filling positions or roles that weren't needed (or are no longer needed), not to mention picking up a lot of underperformers or bad employees in general. And the best time to do layoffs is while the company is still making a profit, with advertising revenue already taking a hit and more hints of a recession around the corner. Not to mention the pandemic being over and people spending less time online. The generous packages are to avoid lawsuits, since laid off employees sign away their right to sue as a condition for receiving the payouts. And these nonrecurring losses are used to offset income (in a year when the company is still making a yearly profit), so they're able to avoid corporate taxes that they would otherwise pay. In short there are a number of causes and contributing factors besides the one mentioned in this video.
I'm sorry, OPPORTUNITY?!?!? To cash out PTO? Sorry, but VAC MUST be paid out. It's NOT an option for companies
You're missing the key difference. Companies can choose who to lay off, but not those who leave voluntarily. Layoffs target underperforming employees, while it's usually the high performers who leave voluntarily.
Worked at Twitter, wish I sniffed any of that
LOL you think 6 months of salary is a high severance!! I worked in the HR and we were firing people all of time. Normally they would get one year of salary at least. Some would even have packages of almost 3 years of salary.
And to answer your question. The company saves a lot of money. After two years there is a profit from the layoffs and that is without considering the downsizing of office space.
And you are considering that the people getting fired are people they want to keep, but half of the layoffs are just employees they want to get rid of, they are not good matches for the company and this is an opportunity to replace them.... yes, they are replaced most of the time for cheaper employees or because they are going to buy another company and need to reduce the FTE upfront, and then do it all over again when they get the new employees and need to bring down the FTE after the merge.
Freezing hiring doesn't work because only the talented people who can actually find better opportunities would leave, after the freeze period you would have only the bums that can't really help the company.
The layoffs target people identified as not sufficiently beneficial to the company.
I hope Hauri never lays himself off of his great channel. Quality content is standard job performance on Logically Answered.
Hahaha, thanks man!
But why are they paying so much while laying off. Is ut in their contact. Can't they pay the least amount of money they want ???
Trying to look as best as possible pr wise
My company recently went through layoffs, but we are a company that runs coding bootcamps. The layoffs in tech are hurting our industry big time. No one wants to get a tech job when all the news is about how hard the market for big tech is. So our enrollment is less than half of what it should be. No press is bad press *for them*, but that doesn't mean that there aren't far reaching consequences
For companies that live and die by stock price performance, these layoff announcements make sense. How they actually play out is a different matter. I can't recall seeing any major projects cancelled.
- It's Not About Money, It's About Sending A Message ( to the investors that they can buy the stock as the company has now layoff , the investors do not care if it really affect the bottom line if the message make new people consider the company as an opportunity to invest thats all that matter. )
As an HR professional, I can tell you this is at best a half-truth. First, layoffs are rarely across the boards cuts. Most companies cut more people in certain divisions, departments etc than other areas (Ex: Sales departments tend to be lower on the list for lay-offs because that department makes you money. Another example is a division generating high value for a company than a division generating little value). Next, individual performers. If you are a top performer in an average department your less likely to get the ax then an average performer in an average department. Other factors include if your department has more highly compensated employees than a department in a department that has much lower salaries because companies can cut more cost with fewer people then in departments with people making far less.
Next is on the attrition side. Companies don't lose people equally through all departments and divisions. Some departments and divisions have far less turnover than other departments. We all know this to be true because we have seen it. Crappy managers that are creepy or bully their workers lose far more people that managers who respect their employees and their employees think highly of. No one wants to work for a horrible boss. This matters because cost savings from attrition because of things like hiring freezes are going to happen faster in departments with horrible bosses who employees quit faster. I don't want to make this sound like a good thing because it is not. HR tends to scrutinize departments and divisions with higher attrition with no obvious reasons. We want to know why. However, we do this through some interesting ways using data. Come layoffs it is far easier to let go those managers in those departments with easier justification. Additionally, companies are always hiring but again not across the board. As business needs, objects, etc, change, so do which departments get more (or less) headcount or which departments get headcount increases or replacements, faster. This all means layoffs, attrition and hiring are far more complex. As for the CEO making the cuts, not quite. They sign their name. The actual determination of departments, divisions, individuals etc. Is done mostly by the HR department accounting department, with the VP of Financials, CFO, COO, VP of HR and CHRO and those that report to them making those decisions based on most likely input from various individual managers across the those divisions/departments targeted for layoffs. It is a team effort.
Freezing hiring instead of layoffs assumes that people are fungible and could be readily redeployed into other functions in the business.
In short layoffs are due to investors, why does it always got to be them?
😂 profit!!
Why in the world would you use revenue to contextualize the savings from layoffs? To be fair you need to use a profitability metric like free cash flow.
I'd like to elaborate on one point you made there: Rightly, or wrongly, attrition is said to get rid of the ones you want to keep. While layoffs are said to get rid of the ones you don't want to keep. Conversely, on the whole, domain knowledge is more likely to be easy to manage/keep with attrition than layoffs because of goodwill.
Just got laid off from KPMG I only got 4 weeks pay, but I have 140 hours of accrued PTO. Considering that we are not going to have much productivity over the next two weeks, I figured they are spending about 22k to let me go.
The layoff US$146,000 × 4.63 = RM$675,980 × 3.96%= RM$26,768.80÷12 months= RM$2,230.73 a month. No need to work in Malaysia. Can retire at minimum spending, you can apply another tech Co. Who give same layoff.
4:35: "A lot of these people are rich enough to retire before they are thirties"
That was the funniest line in the video.
No. I've been working for Apple for almost 10 years now. I'm nowhere near retirement. Nobody leaves Apple to retire unless you're 65. (And I know people who've reached that age inside Apple). They accumulate stocks and decide to take the risk in a startup. If you come back within 2 years to your employer, you can resume your benefits exactly where you left them. Vacation. 401k. etc.
Hmmm. Do you work on the tech side of apple in a tech city and have you been holding onto the stock comp? If so, 10 years should’ve made you a multi millionaire. Apple has 15xed over the past 10 years. So even if you were only getting stock comp of $20k a year in your early days, that translates to $300k per year in stock comp alone today.
@@LogicallyAnswered I'm not a manager. But I'm in the highest tier of Software Engineer. Just to give you a sense of my total compensation, I pay six figures in federal taxes per year. (And I still have to pay California tax on top of that.)
I'm a multi-millionnaire.
I own a house. I own more than 1 million worth of US$ of Apple stocks.
But here is the thing. It doesn't make me rich in Silicon Valley. I'm still very middle class. The cost of life is so high.
Ah ok, I see where you''re coming from haha. Not rich enough to retire in silicon valley but still well off :)
Being a public company with stakeholders sounds like absolute hell. Why do they do so?
They needed private investors to get started. Then the private investors wanted to go public to cash in.
What this teaches me is that you have to not be replaceable!! At least be somewhat having unique qualifications!!
Weak video, little research, little experience or understanding of management in big tech:
1) those leaving are the top talent, getting competitive offers; the laziest just lock in for life and enjoy the free food and massages
2) investors rightly saw that the swelling of headcount and employee costs had no correlation to revenue growth.
3) Twitter as an example reduced staff 80% and operate the same product and a faster new feature roadmap
4) Pichar stated that they're making a cultural shift to actually working hard. Less people are required to do that
5) Layoffs actually get people coming into the office, working hard and competitively, proving their value etc.. not that negative at all - the best talent won't be fired, the rest stop being complacent
SHOCKER another video where you just say random numbers and a bunch of people take it as fact! WOOOOW. Literally generalizing every company saying they lay off for X reason. Cause you saw some investor critique people, then you say other people who are on the board of X company think the same. So that is the reason. No again you took a small thing from one company and applied to all of them.
The only logical answer on this channel is the unsub button, after people realize how beyond surface level this channel is. And its based on BS
You are not into corporate finance, are you? Do not confuse revenue with net revenue or profits. $8.4 B of savings is equivalent to a third of Meta's profits for the entirety of 2022. That is huge. Enough to take the company's multiples to a point where it justifies a way higher valuation, and thus, can get an even higher benefit from the stock market.
And no, it's not only big investors who benefit from the layoffs, it's also small investors, and even employees, who receive stock as compensation.
You do realize that not every employee can do every work? There is nothing called a general purpose engineer. Someone who has experience in hardware engineering can't just start working on an Android app after 1 month of training. It's equally damaging for the employee's career growth as well. People should continue doing what they are good and interested in. (except Php developers😅)
Tci is activist hedge fund owning 0.27% which does these kind of things usually, highly unlikely the reason of layoffs. The simple reason is pandemic fueled growth and hiring turned out to unsustainable and the forecasting simply changed. Nothing more than that.
Only Wixpool offers good returns from investments in DEX platforms on reliable networks like Bitcoin. And I dont see the point of working with risky assets...
You’re not taking into account the skills and experience. For example, Meta have been investing heavily in VR and hired a lot of people from that space. If they pivot to AI they need to reduce the number of people with VR experience and replace them with people with AI knowledge. These are cutting edge skills, you can’t just send your people on courses to be retrained.
The basis of your "real" reason for layoffs is ambiguous. It is akin to saying god (the rich investors) wills it, for no good reason other than whims and fancy.
I dont accept that.
If your thesis is the rich investors, then please explain why they do it.
ÕMĞ é PôWéŘ-PhÛľĽ MûřŘíĶâŃś
😟😟😟😰😰😰😩😩😩😩😰😧😦😥😦😧😦😳😵😶😵😳
So the thing is right now your argument is based on a calculation that takes into account severances. But what is the law that requires you to even have severance? Once layoffs start to become more regular, and tech workers start to become hired more on contract, those bonuses are going to shrink and evetually disappear altogether. At which point layoffs are going to be much more easier and affordable.
I have known employees where getting rid of them was a major morale and productivity boost, and well worth any compensation. I don't want to know how dysfunctional a department has to be to apply that strategy on a larger scale, though.
Idk that explanation really doesn't make any sense whatsoever. There's gotta be way more to it, just never thought much of it
Those who often make these decisions to execute mass layoff procedures often never have to deal with the consequences , often they are incentivized to do so through thier remuneration. Often a sham review will be done by a consulting company and all they will do is offer a solution to an executive team to reduce head count so as to been seen to have delivered something. Layoffs usually di not happen because companies don't have the capacity to keep or re-distribute thier human resources but rather because some executive who has just done his MBA has an ego trip.
Hm, but this also depends on which departments suffer the most attricion vs what departments do they want to purge.
Simplistic example: let's say you want to purge the QA and the Customer Service departments but the biggest portion of the turnover is in the dev teams. You would still need to replace/hire people for the dev teams and freeze hiring to QA but if their attricion is slow, you just lay them off to not wait the excessively long time.
And things like this are why I have never worked for a publicly traded company my entire life. The "owners" mostly have no idea what is actually involved with doing the job and are in it only for the maximum amount of profit.
As for the massive jump in cost of a house verse income, that is actually drastically different on a state by state and city by city basis. I live in Lafayette, Louisiana (I know I know, Louisiana...) and the average cost of a house in the city is almost exactly 4x the average household income. The issue with buying a house has less to do with some nationwide jump in the cost of a house and more to do with a few states and locations drastically throwing off the averages. If you are willing to move to a place with a reasonable cost of housing than you can afford a house.
On a related note, most places with reasonable cost of housing also have reasonable cost of living (food, utilities, etc). Compared to places like California and New York, you can make half the money and still have a higher quality of life with more money to spend on things you want to because of house much cheaper housing, food, and utilities are. We are talking often on a quarter or less. Using after tax income, making $100k a year when it cost you $80k leaves you with $20k for whatever, while making $50k a year when it cost you $20k leaves you with $30 for whatever (and you are buying your home instead of renting). Those numbers look even more out of whack when you look at them before taxes, since the places where you have to make so much more money have a far higher state tax rate and you end up in a higher tax bracket so have even less take home pay.
When calculating where you should live, take the "Average Cost of Living" for that area, add in how much you want for extra (fun/hobbies/savings/etc), and divide by the combined tax rate. The actual 'value to you' of a higher salary in many parts of the country is actually less than a lower salary in other parts of the country. Finding a job in an area that has a high 'value to you' and a reasonable housing market will let you live the American dream.
I used to be able to get a job in about a week. Now I get a response 1/100 applications submitted, and of that I have yet to be able to get a position. Been looking about 5 months.
Curious, does the author of this video have experience working in business or tech leadership? It’s easy to say the solution is simple if you’ve never tried to solve it yourself.
So it's because the people with the money don't know what they are doing. Wow, this is unheard of 😒
I think the tech companies are tired of dealing with gen z assholes and people wasting their time while on the clock. I would hope they would slim down inessential staff like DEI departments and personnel
What a shock, wallstreet greed knows no bounds… they’re happy to put hundreds of thousands of people out of work so they can buy their 5th yacht
Meh. If the "My day working at google" tiktoks were any indication, the people they got rid of aren't the skilled software developers that are leaving on their own
You miss a very wide belief it's connected to AI, as many of these companies heavily focus on AI race
I wonder where you got those vidoes where code writes itself on the screen like at 8:35. Or people touching random keys just to simulate that they are typing something.
Anyone ever notice Microsoft Google's colours are the sign just in a different order
i5 from Chester UK 🇬🇧👍
Getting fired and getting enough to retire(assuming one had already saved some). Please do fire me from a fang company lol.
0:41 damn straight PTO cash outs should be written into law😊
whelp there is a big old sub these billion airs Investors can take a ride on if you ask me. im sure Ocean gate can help out here.
The benefit is Wallstreet. Wallstreet hears layoff, and the stock price will go to the moon
The money hungry people of the earth are gonna be our damn downfall. When is it enough??
I mean layoffs are ways they cycle new team members in with fresh ideas in bulk/Masse
Since when do corporations GAF about morale?
@logicallyanswered I've noticed more and more that the beginning of your videos starts abruptly and the opening sentence is clipped. For this upload, the word "Tech" was clipped off just enough to where I could barely make it out. Just an FYI..
Oh oops, thanks for letting me know
Tbf, these companies have been laying off a whole lot of useless employees.
Love from Ghana keep it up and yh it’s worth it to them severance is a one time thing after you won’t be paid again
this is the first time i find the video confusing...
Which part??
Love from Ghana keep it up and yh it’s worth it to them severance is a one time thing after you won’t be paid again
True but with how high tech turnover is, they could’ve just frozen hiring and waited it out
Hey, also from Ghana. Ita not a good package. 6 months is the amount of money you're required to have in your emergency fund, in case something happens, so it's just a kindness if you didn't prepare. And with so many people being put on the market the time to get a new job may be longer than 6 months.
Heads of major corporations do layoffs for 1 simple reason. The sadness it causes makes them more powerful
A rather cynical perspective haha
That's fair
🗣️Amazon tech is so bad .
🗣️Really? How bad is it ?
🗣️Amazon tech IS SO BAD, it makes my 1980's Texas Instrument Computer look like high end (¿Quantam¿) Apple running on Dark Energy.
"with the exception of Amazon"
Ouch
The only reason why they layoff is the stock bump
Looks like Hari can read my mind. I was wondering about this question and now this dude made a video on this. 😭😭
What a coincidence haha
Layoffs are an opportunity to get rid of maginal performers
Hey yo ,how do i get a FAANG job? Mind u i am an African straight outta high-school with no qualifications whatsoever.
Best to start by learning the craft :)
@@LogicallyAnswered vague and trite but I appreciate ur response.
hilarious
Go to college for computer science
@@woodrowwant6216 can't afford University
Can you make an video why so many ceos are indians in tech?
the most stupid idea i heard for not doing layoff
Dont want to be rude i love your content but after watching you for a while something just feels too repetitive with these videos, maybe the editing and the similar stories about tech giants, i would love to see some more effects besides random business people clips or stock looking footage. But still thank you for the knowledge!
I appreciate the feedback man. Is there any sort of content that you would specifically wanna see?
@@LogicallyAnswered Yes! My view is that as people like johnny harris and MagnatesMedia grows, it seems like the gap between well build journalists/ youtubers and smaller creators is getting bigger and biggers.
Even if the content you make should always be based on what you think you can create (as the writter/researcher)...What i liked that was different from the regular FAANG/big tech content is the videos you made for the CCP drink and the FBI arrest on piratebay or you can do a few more about other similar products and their Controversies, another piece of content i could suggest is target more international viewers by making videos on the balkans and their historical downfalls or how they sell their own public sectors for money that doesnt go back to the goverment same for slavic countries and how their billionaires got their checks, all in all the world not everyone sees and hears about if they dont live in such countries (these countries have a lot of human traf and dra*g issues so i am sure you can find stories to talk about )
When I was disabled and had to retire I got 3 months full pay 3 months half pay and 3 months half pay as I received SSD and my accidents settled so I'm loving life now$$$$$$$.. But I did miss working and retirement is boring as hell, no pressure no deadlines no stress boooooring!! I'd work for Amazon just to quit. 😜 But I used to say I thrive on pressure.😱