Just a note, but this is a perfect time for companies to lay off low performers without getting a lot of flak. This is usually the case when you see companies lay off people while continuing to hire as well.
Comments like this show up on all stories about layoffs. I don’t really understand your point. There’s never any reason to have layoffs unless the company deems it a good financial decision, right? And surely all layoffs would hit the lowest performers (by the company’s estimation of performance, which obviously might be flawed), right? So what is the difference between “the company did layoffs of its lowest performers due to financial pressure caused in part by the pandemic” and “the company did layoffs of its lowest performers using the pandemic as an excuse to avoid bad PR”? To me those are nearly identical scenarios.
It's true (or roughly true) that there isn't a reason to do layoffs unless the company deems it a good financial decision. But it's not true that a company will do layoffs whenever it's a good financial decision. You may know that there are low performers but choose not to let them go because you're worried about morale more generally to that other high performers will take it as a sign of trouble and jump ship. But in a bad economic environment that is less of an issue because high performers are probably more risk averse and fewer competitors are hiring anyway.
Well I think in good times, it's trickier to do a layoff. Like you said, it can appear like it's related to financial pressure. In good times, if you do a layoff, investors/shareholders will worry that you are doing it due to financial pressure or limited opportunities to use those employees to make money (growth). The way to say it isn't about financial pressure is to take the PR hit and say these are low performers. Which kind of implies you messed up by hiring them. So either way, it hurts you in good times.
Now in bad times, it's considered "prudent," because everyone is under financial pressure. Laying off people preemptively wins in both ways in that in can look like you're eliminating financial pressure when everyone is worried about it (as opposed to the good times, where you will be singled out), as well as being able to get rid of the lowest performers and reducing pay of everyone else while avoiding bad PR, and even being considered good because you're still employing the rest. As long as the business remains solvent it's a win-win for the company.
Not saying this is good or bad for the economy or the employees, but just reflecting on some of the game theory of this.
Laying off in good times means you were bad at hiring in the first place. Laying off in the bad times means the bad things weren't your fault. It's a very good way to not have to convey to the market, your investors, your supervisors, and/or yourself that you may not be very good at hiring while also giving yourself another go at it (hopefully with better results, though probably not, unfortunately).
I think everyone is bad at hiring because hiring is hard. The problem is that companies are also bad at letting low performers go because we're human beings and public perception, conflict avoidance and empathy for co-workers influence our decisions
I don't know what world you live in where any company (beyond a tiny, tiny scale) isn't "bad at hiring". Especially not using the ludicrous bar of "never hiring low performers"
In many countries proving someone is a low performer is a high bar. They certainly can't dump 10% of their workforce without a justification like restructuring or downsizing, something a company wouldn't go through just to replace some people. A fake restructuring might hurt the business even more than some lower performing employees. And if a company does go through this phase, legally it can't just turn around and upsize by hiring other people the next day (not that this would guarantee they end up in a better position than before).
Such a crisis is a good moment to slim down the workforce since it is a legitimate restructuring and it avoids any image harm. and it's not just low performers that suffer sometimes. An average performer might get caught in the net if the pay/performance ratio is not good. Many good performers also do just because the area they worked in is not deemed profitable or necessary anymore.
Layoffs don't just layoff lowest performers, they often layoff departments that the company doesn't find necessary anymore. High performers are laid off all the time.
> So what is the difference between “the company did layoffs of its lowest performers due to financial pressure caused in part by the pandemic” and “the company did layoffs of its lowest performers using the pandemic as an excuse to avoid bad PR”?
This is a confusing question, seems the answer seems embedded in the question...the former signals that there's "financial pressure" on the company over and above the reasonable baseline that every company faces, while the latter doesn't. A 100% financially healthy and secure company may choose to pay the ongoing cost of restructuring during good economic times, since layoffs in good times may have PR costs (for recruitment, for example) that outweigh the carrying costs of the low performers (or unbalanced departments, or whatever). If a downturn lowers this cost, then you'd expect companies to take advantage of it.
Exactly, and the nature of the layoffs in this situation only supports this: Cruise (like other SDC companies) has switched their stance from "launch is imminent" to "we have more technical work to do". The fact that business development, product, and marketing were the lion's share of the layoffs seems like exactly the strategic move that a pushed-off launch date would imply, economic downturn or no.
Evidence against this is the fact that they also laid off lidar engineering staff in Pasadena; I don't know Cruise's business, but this also seems like the kind of consolidation you'd expect a relatively healthy company to do (though "healthy" is a weird word for a pre-product R&D co).
People don't want to join companies that have recently had a layoff because they're generally interpreted as a sign that the company isn't doing well financially, outside of companies that advertise firing low performers as an aspect of their culture (Netflix). In an ordinary market, losing low performing business functions might make your company more efficient but it comes with outsized PR cost that makes it harder to hire.
A broader economic crisis offers good cover for such an action. If everyone is laying employees off, it's not as bad if you do it too.
> So what is the difference between “the company did layoffs of its lowest performers due to financial pressure caused in part by the pandemic” and “the company did layoffs of its lowest performers using the pandemic as an excuse to avoid bad PR”?
1. Whether the company might cut deeper later
2. Whether other companies will be forced to follow suit
3. Because of 1 and 2, whether the average HN reader should worry about their livelihood.
(HN readers are, of course, 100% high performers their employers are lucky to have)
On other forums it seems like it splits into two group. One group says that it depends on the team and that they love their current team. And the other group is how working for Cruise is the worst decision they've made in their life.
My curiosity is with, how does a company totally change their culture and do a complete 180%? From having workers completely hating their current company to completely not seeing themselves in moving to a different company. As some companies used to have employees mentioning it is the worst tech company in the bay area to one of the best in the bay area
I'm not sure this makes Cruise particularly unique.
There are a lot of FAANG and ex-FAANG employees on this board, and you can find lots of people who love their job and feel like they are well-treated, compensated and respected and doing a meaningful impactful job, and there are plenty who felt ignored, underpaid and disrespected while working as a cog in an machine designed to sell ads.
From what I’ve heard about the Airbnb and Lyft layoffs, many people who were affected were actually high performers who were paid well but working on projects that were deprioritized by upper management.
Laying off these people allowed them to satisfy their budget cuts while laying off relatively few people.
Continuing to hire sounds strange, but if the offers are lower the company will still save money. Pausing the recruiting pipeline would also hurt them once things start picking up again.
I don't know how this makes any sense. Engineering is the only way to automate things to allow a business to scale sublinearly. Why layoff high performing engineers when you can reassign them to problems where the goal is to automate things enough to reduce costs to below the cost of keeping them around. Any high performer should be able to create enough value within 6 months to pay the salary for the hole year. If anything, you buy your company the optionality to further layoff non-engineers that you can't yet layoff until their job is automated.
Now this may not be possible at smaller companies but at a company the size of AirBnB or Lyft certainly has enough problems that could still be better automated to help reduce costs further.
If there isn't sufficient work available, there isn't sufficient work.
For a highly-paid employee, you sometimes just can't create sufficient other work for them to do if you eliminate the work they were originally doing and other people are already doing the work they could putatively have been assigned to.
And quite honestly, a person's understanding of non-engineering functions would have to be extremely limited to think that more than a fraction of them could be automated away. Software has been the "it" industry for decades now. Jobs that haven't been automated by now are hard for software/robotics to take over.
At both AirBnB and Lyft, I promise you there is sufficient work. I've had AirBnB employees ask me about joining the company to work on a large money saving problem I've got experience with that I'm certain they still have because it wouldn't be possible to have implemented since the last time I was asked.
I've seen highly paid engineers put on projects that had high visibility but had, in my estimation, zero percent chance of actually being deployed due the risk involved. These were often rewrites of huge subsystems to use some "new" technology, when they would've been better off spending their time simply optimizing existing code. I was right in all of these cases. The projects went no where. PRs sat un-merged for years. This was during good times though, so the people did stick around.
From layoffs I saw as a contractor, layoffs of this size are often not based on individual performance. Usually it's whole departments or functions that get laid off. If you have a good network you may be able to jump somewhere else.