Let's just take a moment to admire this paragraph.
> "our business has been impacted by the current macroeconomic environment"
There's that passive, vague non-word again: "impacted". Such a milquetoast way to say "something happened" but without that pesky specificity.
> "user and revenue growth has not kept pace with our expectations"
So, they are growing, but not growing faster than some [arbitrary] goal?
> "In order to run our business sustainably"
Wait, I thought revenue was growing! How is that not sustainable? If you just leave costs where they are and let revenue grow, you are by definition sustaining/growing the bottom line.
> "we’ve made the very difficult decision to shrink the size of our workforce"
This is what I don't get about all of these layoff letters. It's always the same thing: We're growing, our revenue is growing, and [usually unsaid] our costs are growing. So why not just arrest the cost growth? Stop the bleeding, don't start amputating limbs. I can understand layoffs when your business is running at a loss, not when it's growing.
Come on man, if you don't understand how a business can be showing signs of unhealthiness while still increasing revenue then don't post. That's such a trivial superficial analysis of reality.
I'm not going to pretend to know or understand enough about Twitch's business to agree or disagree with whether they need layoffs. But a shallow comment of "revenue go up" is lowbrow nonsense.
Layoffs cost almost nothing. Companies aren't required to pay full salaries or provide any healthcare/benefits for any reasonable period of time after a layoff.
I think even the 3 month notice period from the WARN Act is a pretty crap amount of time to provide for employees who have been terminated.
For a software company especially, they can pull a Twitter and leave the business on autopilot with the code that has already been written and axe most employees. It's not really a big deal to get rid of employees then hire them back 6 months later, but it really should be.
Also, companies like Twitter prove that the WARN Act can just be outright violated while employees are left to fight court battles they can't afford nor have time to fight.
Then you look at unemployment benefits where in most states the whole process is overly bureaucratic and wasteful system that doesn't come close to anything resembling a replacement for salary. I think that whole system would work better and be able to send more money to the unemployed if it was just automatic payments without all the overhead of having people on staff processing applications and answering phones to deal with questions, appeals, etc.
Instead, just continue all terminated employees' salary and healthcare benefits for 3-6 months after termination automatically on the employer's dime. Implement something like that and watch as our boom and bust economy gets a lot less mountainous. Companies would actually have to try and make an educated choice about whether or not to hire someone.
Companies should only be able to dispute unemployment in cases of clear and obvious misconduct. I don't even think that low performing employees who showed up and made some level of half-assed effort should have unemployment benefits revoked. Isn't the hiring of a low-performing employee the fault of the employer for not sufficiently vetting the candidate?
Maybe what I'm proposing is too extreme, I don't know, but I think the status quo is way too lenient on businesses.
I wasn't aware of this criteria, is that somewhere in the guidelines? All I'm seeing is stuff about civility and being decent.
CEO takes responsibility by cashing out massive bonuses.
> revenue go up slower
CEO “takes responsibility” by firing others.
Are you good-faith questioning why the HN crowd is justifiably upset over the current state of things?
> Everyone else is firing people. So it seemed like a good time to fire some people.
> We found 400 people to fire, which sounded like a good number because it's not as big as 500. None of them seemed to be doing anything useful, so we fired them.
> The product will not be affected and as a user you will notice no difference whatsoever.
> Signed, some anonymous guy who took over after our CEO stepped down this week so you can't blame him for firing people.
My team at work hasn't created any meaningful value in a year. We've shipped nonstop but the things were tasked to work on just don't work out or even if they are well received simply don't add up to our salaries.
Eventually you simply can't keep increasing. In a panic to keep up the in short term, companies are cutting their lifelines. This is just leading to failure.
So it's certainly possible that cutting costs - even when profitable - can increase short-term and long-term profitability.
I swear these CEOs are like soccer players running around the pitch, just waiting for Mister Macroeconomic Environment to run near them so they can dive, clutching their calves, crying "impacted! impacted!"
Well, everyone ion the business knows what's going on with twitch and the streaming-market at the moment. So no reason really to explain further I guess?
> So, they are growing, but not growing faster than some [arbitrary] goal?
Actually, in the last months they were shrinking. Partly because viewership around this time of the year is always shrinking for reasons, but this time even more, because pandemia inflated the market, and now as it's ending, the inflation also disappears. Overall, there is still growth compared to the time before the pandemia, but nobody really knows how it will hold until the end of the year. Additionally, the gaming-markted is being a wild mix at the moment, and most attempts of twitch to diversify their content have failed. So they are a bit clueless at the moment I guess how the ship will move and grow.
Do you revisit your personal budget only once you run out of money, or once your income changes?
To use your analogy, a layoff while revenue is growing is like continuing to get raises at work, but when this years raise isn’t as high as you expected, you start pawning off possessions for the cash. If times were dire, perhaps it makes sense. If you are still making money, it seems more prudent to tamp down on new purchases than to try and take back old ones.
Up there with anti-whiteboard-interview screeds, the critique-the-tone-of-a-layoff-post comment is a mainstay of the hacker news comment thread: as tiresome as it is uninteresting.
It is very common to see new CEOs at this time to “make things more contemporary” and with that is the redundancy of roles and even people who may not adapt to the new culture.
Much of the business speak here is trying to say “we’re reducing our workforce to make room for new roles and new people who will match our new strategic direction”. Every company is confused internally and need strong leadership to get through it.
Literally all ordinary rules of business go out the window and people are firing from the hip right now. Pun intended.
> I can understand layoffs when your business is running at a loss
How do you know Twitch isn't?
> This is what I don't get
No, there's more.
They wrote that they're profiting, in the initial post, just not as much as they'd like to. Profit isn't loss.
What about that paragraph makes you think things are gangbusters but they have to lay people off?
> So, they are growing, but not growing faster than some [arbitrary] goal?
Actually the absence of a direction in this sentence is specifically vague language that allows the implication of, but not statement of “negative growth”.
"We got drunk on cheap money"
I must be living under a rock because, outside big tech self-inflicted wounds, I don't know what they are talking about. Is it Ukraine? SVB? Chinese housing market?
When interest rates are low, money flows more freely. When interests rates are up, it's harder to lend/borrow, money flows less freely, and the economy cinches up as a whole. This is a major simplification to a very complex system, but it happens because e.g. as someone with money, you'd rather just put it into a government bond that will for sure pay you 4%, rather than chasing speculative investments. When that same bond is only paying out 1%, you might be more inclined to put your money in a start up and see what happens.
Net income is hard to judge — yes it’s down but not only is Amazon famous for reinvesting all profits and claiming $0 of net earnings, but they’ve also been writing off a lot of one time charges for severances related to these layoffs.
So admirable. How this could be characterized as "going down with his ship" is absolutely wild to me
Firstly Twitch due to historic reason is less likely to have any personal bloat.
Secondly running a streaming platform isn't cheap (media live cross decoding, high data transfer, more requirements for the data transfer due to less buffering, still moderation and copyright detection, some licenses with big copyright holders etc.) and from why I have heard twitch isn't doing that well (through not terrible).
Thirdly there was a influx of live streaming usage during COVID which now likely is receding.
Fourthly it relies a lot on people not just subscribing but "gifting" money (bits, subs) to streamers for little return besides bragging rights, a thanks maybe some emotes and feeling good because of the gift. In a economy which feels more unstable people are less likely to want to spend money this way, or can't even if they want to.
I would guess Twitch has more reasons for cost cutting then Amazone, but at the same time I would guess in different to Amazone Twitch is more likely to be negatively affected by the layoffs.
But let's ignore that, and say they'll keep making that 2.8 billion. Did they hire 1000 new employees between 2021 and 2022? Because if so, that probably means they're making less profit even with an additional 200 million $ in revenue. Assuming the fully loaded cost per employee is ~200K/year, which according to Levels is on the low end (their L4s make 209K, L5s and up make much more)
Couple that with investors now clamouring for returns, and from the business side you can see why reducing their cash out-flows is at least appealing.
It's not selling anything to any consumer or business. If anything, people are watching more Twitch.
So we likely won't go to a oversupply situation.
But as under-supply decreases and in turn saleries should fall.
But then salaries had been in some contexts so high that most startups couldn't afford paying it, so just by accepting this salaries without them falling the average would fall.
So I don't expect the salaries for mid to high qualified IT workers to fall too much outside of SV, and especially outside of the US. Like it still will be a pretty well paying job, just not necessary through the moon high salaries.
Through it might get a bit harder for low qualified IT workers, much harder if they are unlucky wrt. current AI development.
