[IMTDb]

A working agreement is a contract between two parties.

Who made the decision to join a company that was seeing sudden, unsustainable growth ? Workers. Who made the decisions to place themselves in a position they maybe aren't that needed? Workers.

Who enjoyed significant salary increase due to higher demand for their skills, increasing the cost of their labours while asking for increased benefits such as flexibility, work from home, etc ? Again; workers

There are two sides to the coin here.

[dbingham]

No there are not. There's a massive information imbalance. Most companies do not make enough information public for workers to truly assess whether their growth is sustainable or not. Public companies have to file a certain amount of financial information, but they are very good at playing games with that information to mask their true financial health.

Workers have no choice when it comes to positions where they might not be needed. That could be true of literally any job someone might take. And workers pretty much never have the information to accurately assess for themselves whether or not they think they are needed until they are in the job. Every job a worker takes is a risk in which they are asked to trust the company hiring them not to turn around and immediately fire them.

> Who enjoyed significant salary increase due to higher demand for their skills, increasing the cost of their labours while asking for increased benefits such as flexibility, work from home, etc ? Again; workers

Work from home and flexibility are mutually beneficial. Knowledge workers perform better when they are able to do their work in the way that best fits them. This is not some benefit the company pays to hand out, it's the company structuring itself in a way that most benefits it.

As for salary, tech workers are still underpaid. Tech work is not factory work. The companies revenues are entirely generated by the knowledge, skills, and work of the workers. There's no physical machine the company is adding that allows the workers to do their work which they couldn't themselves easily acquire. The very fact that profit exists in tech companies tells you that workers are being underpaid.

The only thing capital brings to the table in a tech company is the ability to operate in the negative - to scale head count (and thus to some degree productivity) faster than revenue. That is not something any tech worker needs, and most tech companies almost certainly could have grown far more sustainably by growing along with their revenue. That is something capital pushes, hoping for outsized returns on the grown on its investment.

So, again, who should be suffering the consequences when the economy turns down? Keep in mind, paper losses of a falling stock market are not true losses for investors. As long as they hold through the fall - assuming the company doesn't go under completely - they'll most likely recover everything and more, but losing a job and therefor income can be life changing for a worker.

[CHY872]

I think there's probably a few things here that are worth a comment:

- Information imbalance: from people I've talked to in decently senior roles at even very large companies, it might be surprising to learn that information can be poor at every level, because generally the people who are responsible for hiring at even fairly senior levels are not directly also responsible for expenditure, especially when macro-economic conditions are responsible for those financial decision. Essentially, the person who is responsible for setting the hiring targets to enable 20% growth is likely not responsible for modelling what happens if the cost of short term debt goes from 2% to 10%. Probably this is most likely in the superscalers, and it's likely hardest in the companies from 2-5k people - with a tech org of about 1k, you're likely acutely aware of the impact hiring strong people can have on your product while lacking the numbers to approach the problem analytically and with a sophisticated finance org. Basically, the number of people who could reasonably be expected to consider 'if we hire too many people, we'll have to fire them' as a significant part of their brief is smaller than you might think.

- 'There's no physical machine the company is adding that allows the workers to do their job which they couldn't themselves easily acquire'. Ignoring the focus on the physical machine bit and focusing more on the creative part of 'what does the company add, what do the people add', your claim may be true in some parts of industry and if you're in that side of industry I lament your situation, but for large parts of industry it's unequivocally false. There's a huge amount of value add that the machinery of an engineering organisation adds. In the more creative spaces, anyone who's operated in a truly high performing culture will have observed that a lot of the culture of building comes from the grouping of people who've been very, very carefully hired for, who've been carefully placed on team together, where memetic techniques have been used to proliferate certain positive behaviours, raising people up. We succeed as a team and fail as a team. You can see this over and over in so many testimonials - the stories from those who worked at Xerox PARC, stories from the MIT LISP hackers, back 50 years, all the way through hearing about the work the M1 team was doing, seeing the companies that spawn hundreds of startups from their alumni. And that's not to talk about the companies who specifically use process and ritual to ensure that engineers are consistently at the bar across massive orgs, from Google's exacting bars for code quality all the way to the consulting arms of Oracle, CapGemini etc who can approach repeated problems and get the most out of their engineers in a space where it's arguably harder to hire talent. And this is totally forgetting the huge non-SWE parts of orgs required to enable success - sales, finance, marketing, etc etc.

- Tech workers are still underpaid - think there'll be a rude awakening coming for you I guess. People across the world get paid based on how much they can get in the market (and if you're already at the company, the switching cost). There's room for places that do it differently, but not much room. If a large number of qualified people join the labour pool, you can bet that the practical market comp goes down.

- Paper losses are not true losses and you can just wait for the price to go back up: Honestly, that's wrong on like every level. Firstly, at the company level, there's a very real risk for many of these companies that they go bankrupt. Spotify has something like $2.8B in cash equivalents, has revenue of $9B and expenditure of about $9B. If their revenue dips by 20% due to e.g. a global recession, that cash supply will last them about 18 months. Before they get there, they have to raise more money. If raising via equity, they're going to be raising at their new and lower valuation, so their investors take a huge haircut. If they raise via debt, they'll be getting charged a lot on interest (because their risk of default is nontrivial). My brief but non-zero insider knowledge of some of these debt deals make it very much sound like a sellers market. A smaller company might expect to see 15% interest demanded - if you need $150M, you're in trouble. The staff who Spotify are dropping today likely represent $300M over that same 18 month period. You can bet that they'll be making this cut after scraping the barrel everywhere else.

Now, for the actual investors - if you take a massive paper loss, you're basically not getting that money back on a reasonable timeframe. https://danluu.com/norstad/risk-time/ is a good article on this topic. The simple way to think about it is that if in the good years you get 4% a year ROI across your portfolio and then you take a 50% haircut once, it will take you 18 years to make that difference back. The people who invest in tech companies are in large part not rich billionaires looking to pay for their next yacht - they're institutional investors, mutuals, pension funds who are looking to maximise returns for their members.

[dbingham]

I appreciate your reasoned and detailed response. I disagree with you and I'll take it point by point. In some cases I think the disagreement is based more in a [reasonable] misunderstanding of the point I'm actually making, or where I didn't make my point as clearly as I should have.

> Information imbalance

I have been that Director level manager responsible for scaling and hiring with out the full scope of information. When I said "people responsible" I mean, the people with the information. And yes, it is a smaller pool than many people might thing. But it is also a much more highly compensated pool. Those are the people who are ultimately responsible, and the people who should face consequences and accountability. I would include the investors (at the very least those who sit on the board and take an active role in the running of the organization) in that pool.

> There's no physical machine the company is adding

Here I fumbled my words. I should have said "capital" or the "investors". Yes, absolutely, the organization itself provides value. But that organization is almost entirely composed of workers and could be run entirely by the workers with out capital. Traditionally, in a factory setting, the value capital has been said to provide - and the reasoning for capital taking the returns - is the physical machinery necessary for workers to do their work. In a tech company, there is no such machinery.

The organization of a tech company is entirely composed of, and run by, workers. In the vast majority of cases, they don't need any physical machinery to do their work except for consumer grade electronics they probably already own or could trivially acquire. In the case of a fully distributed company, this is even more true.

NOTE: I am including management in the workers here. I'm using workers, as it is used in the context of worker cooperatives or employee owned business, as a synonym of employees. This is different from the traditional union or labor organizing context which separates "line workers" from "managers".

> Tech workers are still underpaid

In a traditional capitalist labor market, I think you can reasonably make this argument. This views workers as replaceable cogs and looks at how cheaply they could be purchased on the market.

But I'm looking at it from the perspective of "what does it actually take to produce the value the company produces". And all it takes is the workers time, skills, and knowledge. As I made in other points, capital brings very little to the table. In that case, the workers produce the entire value of the company. And from that perspective, many workers at tech companies (which, remember, I'm using as a synonym for "employee" here) are still compensated less than the value they create. In some cases by significant amounts.

> Paper losses are not true losses and you can just wait for the price to go back up

I'll grant you the wait for them to go back up point. That was a bit glib and not well formed, but also somewhat tangential to my larger point which I didn't make very clearly: which is that while those losses might hurt on paper if they represent wealth that is on paper then they have no immediate economic impact on the person losing it. There's no risk of hunger from a paper loss. No risk of homelessness. No risk of exposure to the elements.

And I will grant you, yes, there are some investors who do expose themselves that much with their investments. But they are a tiny outlier. For the vast majority of investors, their investment is surplus far above and beyond what they need to live a comfortable life to a reasonable standard of living. In other words, they can afford to lose it while suffering no unreasonable impact to their quality of life. (Note, I would consider going from "can afford a private yatch" to "have to live an upper middle class life" a reasonable impact.")

To your point about institutional investors, the vast majority of those assets (80 - 90%) are owned by the top 10%. Who are, by definition, the middle upper class and above. They are perfectly comfortable. And they can afford a loss.

My larger point is about the risk actually being taken - not in terms of paper wealth - but in terms of real impact on quality of life. Investors aren't taking much. Workers are.

[iancmceachern]

These details are not often not apparent to workers, and many times the folks doing the hiring actively hide this kind of thing from applicants. So it is not the workers fault.