[rob74]

> The planet is not exactly flush with such folk at present, and much of Arm's appeal to investors lies in its deep technical expertise. It is therefore likely that most of the redundancies will be staff not directly involved in Arm's core activities.

This "cost-cutting exercise" (lovely euphemism) may not directly target technical people, but for some of them it may be a wake-up call nevertheless: "if they start lay-offs now, who says this will be the last round? And who says that I won't be next?". So they start looking around for alternatives, which I hear are plentiful at the moment, and hey presto, you got rid of the people you didn't actually want to get rid of...

[Gareth321]

I finally have a use for my MBA. The theory on this one is not good. You're right: people will leave of their own volition. Problem is, it's usually the people with the highest marketability. In laymen's terms, the most skilled and productive employees. In any given organisation you'll find 20% doing 80% of the heavy lifting. Losing half of the most productive employees results in a real world 40% reduction in output. Of course, much of this output is intangible and easy to hide, so investors don't see the damage for years. Soon enough, lack of productivity bites cash flows, and another round of layoffs is announced. Wouldn't you know it, the most productive leave this time too.

[01100011]

A couple of coworkers with experience in the defense industry related a story about a company, Cubic I think, which started offering buyouts in order to reduce headcount and boost profits. The best engineers took the offer because they could just get another job somewhere else. The worst employees stayed behind and proceeded to do the same buyout approach next time the company needed to save money. It was a natural selection feedback loop that took the company's engineering talent into the gutter.

[mprovost]

Bruce Webster named this the "Dead Sea Effect". [0] Imagine your talent evaporating, leaving an increasingly salty residue.

[0] http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-d...

[onlyrealcuzzo]

I think the practice is old, and /might/ have once made more sense.

If you offer a buyout to a bunch of people in a factory with no real alternative, you're selecting for the people who want to do nothing - which is probably the people who are doing (close to) nothing.

If you offer a buyout to a bunch of people with real alternatives, you're going to mostly buyout the people with the best alternatives (the most marketable employee / the most productive).

This is amplified by the fact that factory workers really have a minimum amount they must be productive. Whereas software engineers can LITERALLY do nothing. Further, factory workers have a pretty low limit on how productive they can be. The limit is much higher for software engineers.

It's an old practice that might have made sense, but definitely does not make sense in software.

[andrewjf]

As far as I can tell, this kind of thinking (the best people leave first and you're stuck with the lowest performers) _is_ accepted common knowledge.

So what's the thought process that goes into triggering the good people to leave? Is there just no other option?

[chii]

> So what's the thought process that goes into triggering the good people to leave?

my 2 cents is that those high-performers are not trusted enough with autonomy (by the increasingly large middle management). But the reason they are a high performer is because they're very good at working out what to do, as well as executing - which implies good autonomy, and self-reliant decision making. Perhaps at a large scale team, this sort of autonomy doesnt work.

As an anecdote, there are high performers in crafts such as blacksmithing - where the skills required are high and high autonomy is probably desired (i have never seen a blacksmith be micromanaged). So what makes software development so different that it cannot remain like a craft? My answer is that you have middle management who is made responsible for the output of the high performers, but they don't and can't truly control them - other than via micromanaging.

[peterangular]

> My answer is that you have middle management who is made responsible for the output of the high performers, but they don't and can't truly control them - other than via micromanaging.

Agree. This is all anecdotal:

IMO - the people who get promoted to management in technical roles often don't have the people skills to perform the job well. I have had leadership thrust upon me multiple times in my career and it's very difficult. You're constantly balancing autonomy vs. active management for each person, in each role, for each unique situation. You're sussing out people's strengths and weaknesses working to help highly competent/technical people progress in their career. You're actively working to keep people on the same page, and sometimes you're working against your own contentious team members.

I rail hard against non-technical management managing a technical role - it just doesn't work. So, typically, technical people get thrown into management roles and I think we often suck at it. We don't take the time to work on ourselves to have the people skills required to be a positive leader of people. Then we compensate like any other crappy manager: we micromanage (crack the whip), we keep people in the dark ("mushroom management"), we DARVO, we have angry emotional outbursts, we pick favorites, etc.

What we see in software (and other technical roles) is that most people picked for management never put the work in to be an effective leader of people. And, I think the very nature of our work precludes many of us from developing the social skills it takes.

[Gareth321]

>I rail hard against non-technical management managing a technical role - it just doesn't work. So, typically, technical people get thrown into management roles and I think we often suck at it.

I think this is just an outcome of the reality that it's extremely rare for someone to be highly competent in people management, business, and tech. Such a person can work anywhere, and ask for any amount of money. Back in the real world, candidates will usually have certain strengths. Good companies attempt to train up said weaknesses, but oftentimes people are just not good at certain things.

I used to be on your side re non-tech managing tech, but I am now much more pragmatic. People management skills are very difficult, and I don't believe a people manager needs to be as technically skilled as their employees. Quite the opposite: the employees are there because of the skills they can bring to the team. The critical component here is ensuring the people manager is actually good. That means providing autonomy where appropriate, and structure where necessary.

[chii]

> What we see in software (and other technical roles) is that most people picked for management

i think instead of being picked, it's more that the management track is the only real way to gain higher compensation. There's a glass ceiling for IC (individual contributors) in terms of compensation - sure there will be the occasional principal developer (or some such like "architect"), but even then, those roles tend to turn into a managing role; you're herding other people and writing proposals and to convince upper management that such and such ideas for the product or system is good.

If such a person was just given the authority to dictate - or is working alone - they'd just _do_ it. They'd be able to accomplish far more in the same amount of time (provided they do have the skill and execution chops). But that's exactly what a high-performing person _is_!

Unfortunately, even if such a role was created and the person given the space, the compensation is not matching unless said person had equity holdings (such as being a technical founder). So to reach a level of compensation commensurate with such skills and capability, you end up needing to become part of the management - paradoxically removing the use of the very skill that would make you worthy of such compensation!

[SuoDuanDao]

I suspect that past a certain scale, some good people leaving is so unavoidable it becomes necessary to make everyone replaceable. That tends to hobble the top performers the most, turnover justifies shifting the culture more in that direction, etc.

[dan-robertson]

I don’t really buy this argument. Another thing one sees is companies deciding that a certain level of ‘unregretted attrition’ is good and then effecting policies that end up raising attrition in general and of course it disproportionately rises for the more productive marketable employees. So maybe those companies don’t realise what they’re doing or they don’t know who is important to keep or they think the attrition is worth it. I don’t think one can merely consider it unavoidable when companies actively increase it.

[xbmcuser]

Self interest good people being good can take the money as they either expect to get a better or similar paying job as well as the payout for leaving so their income increases. If you are working for a company where it is so bad that it starts laying off people or buying out their contracts you are probably working in very stressful conditions.

[humanwhosits]

"If they can't afford those other people, I'm probably not getting paid enough to stay"

[caoilte]

The thinking is, Good people leave anyway. Everybody is replaceable.

[vishnugupta]

> you got rid of the people you didn't actually want to get rid of

And to add salt to the wound you will end up retaining those who are good at surviving such layoffs by doing some optical work. It's the worst of all the worlds.

It should also be pointed out that people are not plug-and-play parts of a machinery. They carry domain knowledge, context (Chesterton's fence), intra-company network they have painstakingly built and such intangible value. Besides, layoff doesn't mean the work disappears. It gets distributed, often unevenly, among existing workforce. I've seen it first hand and the aftereffects are just terrible.

[hn_throwaway_99]

Just to be slightly contrarian, I've also seen in tech companies that layoffs are often the only way to get rid of "mediocre-ly poor" but not egregiously bad performers.

That is, I've worked with people that didn't completely suck, but to quote Office Space, they always did the absolute bare minimum. Few companies have the Netflix mindset of letting people go with a large severance if they aren't top performers, so these mediocre folks can just be allowed to fester.

TBH, I've been glad as an engineer to see the company (belatedly) handle these sub-par performers, and to these folks benefit they get a fair severance and can usually find other jobs quickly.

Of course not all layoffs are like this, and often times layoffs at a large company are done "unevenly" as others have pointed out, but I have been in a company before where layoffs allowed the company to focus and perform better.

[adsfasge]

You seem to use these terms interchangeably - people who do the absolute bare minimum, mediocre-ly poor but not egregiously bad performers and sub-par, while I think they are all different.

Every employee is either sub-par, at-par or above-par. If you perform the minimum to not get fired, you are necessarily doing what's expected of you, you're at-par (maybe you wont get promoted but you are doing what's expected of you), and if you are doing more than you need to then you are exceeding expectations.

This thinking that you can do what needs to be done to not get fired, but still be under performing just tells me its a bad manager(s) with no clear expectation setting and communicating it and if anyone is clearly sub-par making sure its communicated early with clear expectations instead of a doing a mass layoff to try and hope fix it.

[kradeelav]

I understand the annoyance at underperformers (I really do), but that feels a little, mm, unkind on some level. Some people just want a steady paycheck without having to be a rockstar, and I can't blame them for that.

[hn_throwaway_99]

I certainly don't blame them, but at the same time I rarely feel bad for people that are laid off in a company in a growing industry if they are given a fair severance. Yes, it can be challenging and disorienting to have to go find a new job, but again, as others have noted, I have no doubt that all these people will get snatched up quickly.

I contrast that with people that are laid off in a shrinking industry, and I have a ton of sympathy for those folks, because it's basically musical chairs around who gets to keep their jobs. Folks who are laid off in shrinking industries often need to take a large, permanent pay cut, or leave the workforce entirely.

[kradeelav]

Those are really good points, actually - thank you.

[hiptobecubic]

There's a difference between "I don't want to be a rockstar" and "I am doing the bare minimum to make it not worth it to fire me." I think the post is talking about the latter.

[dan-robertson]

How does “I’m doing the bare minimum to make it not worth it to fire me” compare to “I’m being paid a larger proportion for the value I create” for you? To clarify, the former happens by decreasing output and the latter by getting paid more for existing output and obviously can be harder to achieve in practice. In both cases the company could be getting (or feeling they’re getting) lower value for money from the worker.

[tharkun__]

I think the meaning behind this sentence is not as black and white as you might interpret it. And it's also probably hard to impossible to actually quantify exactly.

How do you really equate your 'output' (value) with the money you are being paid? There's no direct 1:1 relation or easy formula. Even if you try to come up with an elaborate scheme of metrics, there really isn't a perfect way for it.

That said let's assume you could measure that somehow. Even then the underlying meaning of "bare minimum not to get fired" is not that you provide the exact 1:1 match of value you provide to the money you are getting paid (including benefits etc). There exists some X < 1, where you aren't getting fired but the value you provide is definitely smaller than the money you get paid. Is it 0.8:1? 0.5:1? 0.1:1?

Whatever that actual number is though, at most companies I've been at that number that lets you stay on is so low that nobody can argue that you're "just" doing your duty to extract as much value from the company for as little work as you can get away with (after all, in most cases the company is definitely trying to do that in reverse). It's so low that anybody that isn't doing the same thing gets severely demotivated. If I do my 1:1 or even a 0.8:1 or whatever and I like my job, then watching a 0.1:1 not being fired and even actively protected in some cases is awful.

[m463]

There's also culture death during layoffs. People get nervous, start focusing on their own tasks and don't altruistically help others.

[ethbr0]

Counter-take: There's also cultural improvement during layoffs, when you no longer have to interface with someone who doesn't want to do their job and/or is bad at it.

[ravitation]

I've been through numerous rounds of layoffs, both of entire teams and of select individuals or roles, and it has never had a net positive effect on culture.

Large-scale layoffs very rarely (i.e. never) simply cut people that are "bad at [their jobs]."

[A4ET8a8uTh0]

It seems to depend on the company, but based on my observations the people who are first to go seem to correlate strongly with people, who management does not like. The remaining layoffs are a weird function of people, who know what they are doing and can't ingratiate themselves.

[pmontra]

In my personal experience the first to go are the non management highest paid employees, the degree of competence doesn't matter. The really good ones go before the layoffs. The next layer of skilled employees leaves between the first and the second wave of layoffs. Eventually you get a company of drones with some management on top of them. Possibly a lot of management because sometimes they contract the same very people they laid out because they need the expertise but they want to transform capex to opex.

[hn_throwaway_99]

Totally disagree with both sentences. As I posted elsewhere, I've seen layoffs in a place I've worked as a way to finally get rid of subpar performers.

I've also seen cases (and this appears more relevant in ARM's case) where the company just hired way too fast. It wasn't that people who were laid off were necessarily bad, but there were just way too many people for the amount of work, and so in absence of clear purpose a lot of people would have tons of "make work" meetings that were really there just so they didn't feel totally useless.

I'm certainly not saying all layoffs are like this, but I do take issue with the idea that layoffs never have a net positive effect on culture.

[ravitation]

No offense, but I think you are looking at "culture" through a pretty narrow lens (or just not talking about "culture" at all)...

Regardless of if you are "[hiring] way too fast" or "finally [getting] rid of subpar performers," layoffs are still, by definition, firing a bunch of people's coworkers. Simple work efficiency, which is what you'd theoretically be improving in both of your examples, has relatively little to do with company culture, so your examples aren't very compelling evidence.

[mschuster91]

The "bad" people will hold on as long as they can - partially because they won't have it as easy to find a new job, partially because they gamble on enough "high performers" leaving that they cannot be fired because otherwise everything would collapse.

[time_to_smile]

Have you actually been at a company that has had massive layoffs?

I've been a few times and I recall losing lots of friends and valuable team members. Even management typically doesn't spread the ridiculous myth that they're laying off people "who doesn't want to do their job and/or is bad at it".

Layoffs are heart-breaking and I can't earnestly believe that someone who has been through them would have this "counter-take".

[Terry_Roll]

Worked at the largest stock market listed supermarket in the 90's which is one of the largest employers in the UK after the NHS. They banned all but essential recruitment and cut back on everything like payrises, capital replacements to maximise profits because they didnt know how the Socialist Labour Govt was going to be with taxation. As it happened the Govt introduced working tax credits so a wage top up for the lowest paid, paid for by higher earning workers and it meant these companies could keep wages suppressed so they could build up a war chest and expand overseas which ended disastrously in the US.

Theres more than one way to skin a cat as they say, so layoffs can be seen in a few different lights.

Edit. Just because a company is listed on the stock market, like govt's doesnt mean they are not fronts for criminal activity!

[1270018080]

I have never, and probably will never, see a culture improve after layoffs.

[gedy]

That should really be taken care of as it comes up in a case by case basis, not mass layoff.

[ethbr0]

I'm not pro-stack ranking, but I also can't argue that sweeping layoffs don't also have some benefits.

[herval]

Can you cite a couple of examples where it _did_ improve things?

[caoilte]

You don't need to stack rank to ease people out who aren't happy doing their job.

[clavoie]

While I hear what you're saying, I doubt that's often the case. Either you have a company who either tolerated bad employees for a long time or just figured out they were bad at their job.

Neither points to a very healthy culture to start with.

[pjbeam]

Which then in turn puts pressure on the spiral of talent loss in the departments management wasn't targeting.

[Yoric]

Yep. I've been exactly there ~15 months ago (not at Arm, but in another fairly big tech company). I haven't checked the actual numbers but it is my understanding by some former colleagues that the number of tech people who decided to leave was comparable to the number of people who were laid off.

[hgomersall]

I've heard it suggested that the best way to stimulate a bunch of startups is to collapse a big tech firm. I know of at least two clusters that can be traced back to big companies going under.

[petercooper]

Or even half an industry. I don't think it's a coincidence a lot of significant technical developments or companies came out of the post dot-com "fallow" period of 2002-2006 (like the spread of Ajax, Rails, Django, .NET and Mono, Skype, WordPress, much of Web 2.0's innovation with Flickr, Twitter, and Facebook all founded in this period, AWS).

[mikepurvis]

The Toronto-Waterloo tech corridor can be pretty heavily tied back to the slow implosion of RIM/BlackBerry over the course of the early 2010s. Even the companies that predate those events still benefited a lot from the glut of qualified personnel coming available, and there are others which had been funded or bootstrapped by early RIM employees.

[bregma]

Where I work at BlackBerry it seems to be all ex-Nortel people. So it goes.

[mattkevan]

Pretty sure that most of Silicon Valley, including Intel, was founded by people exiting Fairchild Semiconductor when things got rough there in the ‘70s.

https://computerhistory.org/blog/fairchild-and-the-fairchild...

[navaati]

Sun

[mattkevan]

That’s happening where I work.

There was a shock round of layoffs a few months ago, triggering a mass exodus. They’ve now had to start hiring again to make up numbers.

The amount of team disruption, lost domain knowledge and hiring expenses, especially as new people will want to be paid more, must have cost the business far more than they saved from the layoffs.

So short sighted.

[ThrowawayIP]

I'm sure your CEO got their bonus though, if not a premium on the bonus because they lead the company through such hard times.

[pfortuny]

It is also a great way to make technical people do non-technical work and end up wasting a ton of time.

Overall, cost-cutting in the short term. Just that.

[Clubber]

I agree. To add, usually when this happens seemingly at random, it's to make the company look more attractive for a sale, in my experience.

[noir_lord]

Given the outcry after the last attempt at a sale and the fact that nVidia got blocked (a US company) who would risk buying arm at the moment given that multiple competition watchdogs are currently paying attention.

[cinntaile]

They're preparing to IPO in 2023. It's a shame the Nvidia sale didn't go through, now they'll likely die a slow death because they don't have enough R&D resources to compete with the big boys who are just going to design their own CPUs instead of buying the design.

[swamp40]

Small ARM Cortex's have taken over the microcontroller market. Billions made each year from every large microcontroller manufacturer. They aren't going anywhere. It's hard to believe ARM wouldn't make enough from licensing fees and from each one sold to make an easy profit. Maybe the license doesn't account for individual sales, IDK?

New secure ARM Cortex's are launching everywhere too, so they are very much alive and well, for the next 20 years minimum.

[fundmondawyaya]

Small RV32/64 cores could supplant them.

For example, GigaDevices makes an STM32F1 clone which comes in two flavors with the same peripheral memory map: ARM Cortex-M3, or RV32IMAC.

[swamp40]

Lots of things could supplant them, but the base is too large now and it has grown to cover the entire ecosystem.

They spent the last 10 years beating out PICs, 8051s, etc. Because they were BETTER.

And now a million engineers now how to use them, and the tooling from 1000+ companies is all in place to support them.

They aren't going anywhere.

[ksec]

>compete with the big boys

Which big boys are designing their own CPU instead of buying from ARM? Apart from Apple and arguably Qualcomm with Nuvia?

[mschuster91]

The "big boys" you mentioned are all holders of ARM Architectural Licenses - there are only 15 of them in total and they likely pay a shitload of money for the privilege [1].

And they will need to hold on to the ARM architecture and thus the license payments for quite the time... I bet Apple could go and develop a completely new ISA from scratch, but that would mean a third infrastructure switch in two decades on the PC and the first one on everything mobile - a lot of work for everyone involved with no real benefit, and especially after they spent multiple billions on getting their ARM stuff to the performance (in compute power and power efficiency) point they need.

Even the "biggest boys" aka nation states fail at making decent alternatives to the x86/64 and ARM duopoly - the Russian Elbrus and Indian SHAKTI CPUs are utter exotics and Chinese Loongson are a plain fork of MIPS (and again, completely exotic).

[1]: https://www.anandtech.com/show/7112/the-arm-diaries-part-1-h...

[Kon-Peki]

That's an interesting idea.

The Apple M1 lineup, for example. The M1 standard, pro, max, and ultra are not differentiated by their ARM cores other than the quantity of them. It's really the GPU cores and media encoding components. And that Neural Engine thing is really important for many apps and OS features. At what point do the general purpose CPU cores on a modern chip become minor players that have very little impact on overall chip performance? I don't think we're there yet, but it certainly could happen.

EDIT - I'm saying M1 vs M1 Pro vs M1 Max vs M1 Ultra. Not M1 vs Intel i7

[yywwbbn]

That not really true though. M1 had considerable better single core performance at the time of release than anything else with a comparable TDP. And the Neural Engine is only useful is fairly narrow use cases.

[mkr-hn]

I wonder if there were similar conversations about math coprocessors when they joined the CPU. What did people say about increasing specialization of cores then? The closest recent analogue is GPUs joining the CPU on mobile devices, but it was only recently that those weren't complete garbage.

[kcb]

Apples ARM cores have been significantly ahead of off the shelf ARM designs for years now.

[rossdavidh]

You could sell to private capital, or a company not currently in the semi industry that wanted to enter.

[edit] Oh it says it right in the article: "SoftBank, Arm's owner, responded to that setback with a plan to float the chip design firm by March 2023."

[hnlmorg]

Would either of those things genuinely put other companies off? If I were looking to expand into that market then it wouldn't put me off. They're manageable hurdles to purchasing rather than reasons that buying ARM would be bad business.

[redleader9345]

I've seen companies go on hiring sprees just prior to being acquired, which I don't fully understand. I guess the company tries to puff itself up to fetch a larger asking price? Guessing base cost factors in to sale price.

It's shitty, cuz their playing with people's lives. As soon as the acquiring company takes over, their like "what's with all these unnecessary people?"

[guiriduro]

Maybe it is to create the 'inefficiencies' which the merger can then 'synergize' away, so that the acquiring execs can get bigger bonuses. Because I've yet to see one instance where real (non-stupid/contrived) synergies actually occurred as foreseen, but plenty of cynical M&A. Also plenty of absolutely atrocious dysynergies in corp history of course.

[scarface74]

Off the top of my head:

- Instagram/Facebook

- Next/Apple

- Beats/Apple

- LucasArts/Pixar/Fox/Marvel (maybe)/Disney

- MetroPCS/Sprint/T-Mobile

[gadders]

https://steveblank.com/2009/12/21/the-elves-leave-middle-ear...

[Johnny555]

So they start looking around for alternatives, which I hear are plentiful at the moment

On the other hand, if you think the layoffs are due to an impending economic downturn, you could end up moving to a new job and being the new guy, so if they need to make cuts, you're first to go.

I was working for a small (~500 people) but well established startup around the time of the original dot-com bust. I have some friends that tried the same thing -- saw the writing on the wall and tried hopping to a bigger more established company for job protection, but they were the first to lose jobs when layoffs hit the industry. We had relatively layoffs in some areas of the company, but not in the core engineering team.

[jollybean]

Layoffs happen all the time. Most people are not 20-something people who can move across the country on a dime.

Far from worrisome, the talent may be fine with losing what they view (rightly or wrongly) as the extra weight.

A company in a bad downwards spiral is one thing, but this doesn't seem to be that. If there is a second layoff, maybe some fear would hit, but I don't think Arm is in a terrible spot. I wouldn't suggest that many people are thinking in dire terms.

[Calamitous]

Yep. As soon as the layoffs start (or even reliable rumors), I’m polishing my resume.

[ge96]

Corp I worked at would not raise their pay and a huge number of people just left. People with 20 years at the company. It was funny on LinkedIn you'd see people with a photo of their badge and one of the buildings in the background ex-employees "celebrates" this. The corp is in talks of getting acquired now.

[tlogan]

Large layoffs is always a politic game and in many cases very smart people working of cool projects ended up being laid off.

I was in one large corporation (not large anymore) which did something like that. And sure, cafeteria was still full of marketing and sales people even after layoffs.