Dan Luu
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Big company layoff stories
🕑 Added 2022-11-06 05:40:42 +0000 UTCEarlier this week, a story about Stripe layoffs was on the front page of HN. Multiple Stripe engineers commented to say that it appeared that, in general, managers were not consulted about who would get laid off:
One engineer said:
> I work for Stripe and got laid off this morning. Sucks because my manager was only told this morning, and didn't have a chance to talk about how well I was doing or take any part in the decision making. We'll at least I'll get a break. I worked nights and weekends all of October.
Another responded to this with:
> I believe that this is the case for all employees laid off by Stripe, including myself.
It's too early to tell what the impact of these layoffs will be on Stripe, but of course there have been cases of "incorrect" layoff choices. And not just for ICs, either — I'm told that a widely beloved skip-level manager who was considered effective was let go.
Although big companies don't always handle layoffs like this, it's fairly common. Below are a few other examples:
At Etsy, where sometime before the layoffs, I'm told that the head of HR said that attrition was unhealthily low (at around 5%), I've heard that they decided to do layoffs and turned out the entire process in around 24 hours. I've heard conflicting timeframes on this one, so 24 hours might not be right, but it seems that it was pretty quick. Of course there wasn't time to consult many people and a large swath of the company was let go, often without consulting anyone who understood the performance of a particular employee.
Besides the obvious impact of causing a lot of problems when critical engineers were let go, the way the layoffs were handled caused a huge amount of attrition, so much so that the company ended up below its headcount target and immediately went on a hiring spree to fill roles. If you understand anything at all about how employees respond to people getting laid off at random, it will not come as a surprised to you that the company suffered from quite a lot of attrition and most of the people who were considered the most effective employees left after the layoffs, but this was quite a surprise to HR and company leadership.
Once when Intel wanted to do a major layoff, they decided to do it automatically based on some dimension of compensation from the last round of performance reviews (if I'm remembering this correctly, I think it was based on equity awards, but I might be mixing things up and it might've been based on bonuses or salary increase or something else). Apparently the theory was that when the rubber really hits the road, the company hands out compensation and managers fight about compensation more seriously than abstract ratings, so it would be better to use compensation than FOCAL (Intel employee performance) ratings. But, since managers have limited budgets and employees have different preferences, a manager might give one high performing employee a lot of cash and another a lot of stock. Quite a few managers were unpleasantly surprised to find that the employees they'd given relatively little stock to in the previous cycle got canned.
In some cases, this resulted in the standard song and dance where the company tries to hire back people it just laid off, a story I've heard from quite a few places and that's happening at Twitter right now, per https://twitter.com/CaseyNewton/status/1589075543420325888 (BTW, since a lot of viral stories about Twitter are untrue, I'll note that I confirmed this with folks and folks at Twitter are scrambling to make a list of people to hire back).
Speaking of Twitter, another messy layoff was Twitter's big purge many years ago. At the time, the company was in such chaos and events were moving so much more quickly than leadership was able to handle that between the time leadership drew up the layoff list and the time the layoff hit, that some teams were accidentally laid off down to two, one, or sometimes even zero people.
On Twitter's current layoffs, as with Stripe, it's too early to tell what the impact is really going to be. The stories I've heard so far are pretty wild, more so than ones I've heard for any other layoff, e.g., https://twitter.com/altluu/status/1587690365540511749 is quite unusual, even by big company layoff standards. Other people I've talked to who've worked at places that are in total chaos (companies going through their final days before collapse, finance companies where people were worried the company could become insolvent at any moment in 2008, etc.) also report that things are wilder than they've ever seen.
