> The culture of “we are awesome” has dominated most internal communications for the last couple of years, including in 2022. We all believed that we were awesome and would continue growing and winning.
This is the big thing that drives me nuts.
I don't know if it's a fragility of ego thing or what the cause may be, but it results in a corporate inability to critically self-evaluate at the highest levels. If you can't say where your weak areas are, you're not improving.
One of the experiences that untreated ADHD blessed me with was routinely failing classes. That repeated exposure to undeniable failure (and the consequences of it) really helped me accept that failure is the default. If you're not constantly fighting against failure, you're failing. You can't pretend that something didn't work out, or stop thinking about it because it hurts.
The self congratulatory back-patting (even if it's just "everything is fine, we're doing great") is treating success like an achievement. Success requires vigilance. Excellence is not an achievement, it's an activity.
We need more leaders that talk about the things we could be doing better, and doing so inspirationally, not derogatorily. It's ok that you're not the best at something. Very few are. That doesn't mean you can't or shouldn't do better.
Try internalizing that if you're not constantly struggling to do better, you're not living up to your potential.
Stripe had a few “official” principles that I really liked along these lines: “We haven’t won yet”, “macro-optimism but micro-pessimism”.
They’re no longer official principles though, and I’m not 100% sure how much they were actually acted upon while they were (at least during my tenure).
I like the book Crucial Conversations, which tells us to avoid the "fool's choice" and be 100% honest and 100% respectful at the same time. The fool's choice is when a fool thinks something like "I can either tell the truth and be fired, or keep my mouth shut". The book teaches that with some thought you can find a way to tell the truth without being fired, etc. This is advice for an individual, but not an entire organization.
For organizations, they could at least hire a consultant / speaker to do a presentation every year on how people can effectively give negative feedback. The speaker could say "you all see bad things happening at the company, things you aren't happy about but don't want to risk speaking about, here's how you can speak about those issues without any risk". Teach people things like, studies have shown that proposing a solution along with your complaint makes it more likely to be accepted, etc. For the price of a speaker or two, you could train your company to effectively deliver and act on negative feedback. Too many people don't know how to effectively express their problems.
If someone wants to start a consultants / speaking tour you can have this idea.
Part of me is imagining ‘tell the truth and not be fired’ to involve some kind of Yes Minister strategy like the Rhodesia solution.
But more realistically, most modern tech companies are going to want to not fire people for telling the truth or more generally speaking their minds, and individuals can often have a bigger impact than they would imagine. It doesn’t really make sense for a reasonably well run company to ignore such things from employees they clearly think are valuable.
That said, there are still exceptions, e.g. labour activism in the US is probably a good way to get fired (with a nice big severance), and if you work at Boeing and write some email like ‘this plane is designed by clowns and I won’t let my family fly in it’ (or perhaps even just reasonable concerns) that is also bad (because that email will show up in court if there’s an accident and you can’t say ‘we want to have a workplace where all engineers can raise concerns about the safety of our planes’ – better to just not do it over email, which is a bit of a silly incentive)
> most modern tech companies are going to want to not fire people for telling the truth
I agree. I gave that as an extreme example of "the fool's choice". More realistic examples include "I can tell the scrum master he talks to much in retrospectives and he will dislike me, or I can be quiet about it". Truth is you can probably find a good time and way to tell him that will not hurt his opinion of you.
As for raising safety concerns at Boeing (for example), maybe that's not a "fool's choice", but simply a choice. Are you going to do the right thing or not? Sometimes the "if I speak up, bad things will happen" mindset is the unfortunate truth, but not as often as many think.
Still make the complaint, I never said it was required. In fact, I heard of a company where management said not to complain unless you had a solution and it really bothered me; sometimes you don't know the solution, but the complaint still needs to be made.
You can still do something like offer to help or proposing a meeting as the "solution", or at least the start of a solution.
also, the complaint can be perfectly valid and important without having any solutions for it. many times employees don't have the knowledge needed to know what are the possible solutions.
but individually their solution is to go where their needs are met (as much as possible of course)
This is an interesting idea, I have I feeling I know the what they’re getting at, but if you have any examples of how they put that into practice I’d love to hear it.
Adding on to the other reply, the first place I heard of this general idea was from a survivor of a POW camp in Vietnam, who said that the people who thought they’d never get out didn’t fare well, but that the people that fared the worst were the ones who thought they’d be out by Christmas. Christmas came and went and they still were in the camp, and that really demoralized them. The move was to know that you’d eventually make it out, but be very pessimistic about when that would be.
HN is guilty of this constantly. Everyone who posts here is implicitly in the right and users unequivocally back that attitude, even when it realistically is a scenario of "maybe you were a shit employee and were fired for it and your employer isnt in the wrong?" or "your Show HN really isn't that impressive". We're not allowed to say anything critical of other HN users without being downvoted or reprimanded by dang.
So why is it any surprise that every startup company has precisely the same back-patting culture?
The context is somewhat different on an anonymous online forum such as HN. Giving feedback as a stranger can be fraught with insufficient information. Criticism can easily spiral into negative flamefests full of assumptions of the receiving party. Thus, mods try to dampen it from getting too negative and toxic.
> So why is it any surprise that every startup company has precisely the same back-patting culture?
They are different because presumably coworkers are people you at least personally know in passing, and are not anonymous usernames.
We should be gracious to strangers but more critical to those whom we do know.
My statement was certainly an oversimplified assessment.
> Valid, level-headed criticism
This is a good clarification to make, thank you. Ultimately this is what I'm longing for more of in the world. "shitting on" either yourself or someone else isn't helpful.
The problem with this stupid website is I (or no one else) couldn’t even properly reply to you due to censorship.
I intended to write a sample of what actually “shitting on you” would actually be, but I knew the autistic mods would ban me just the same as if I was actually doing so because they lack the prefrontal cortex material responsible for comprehension.
So engaging with you, or really in any valuable conversation on HN, is an exercise in bad faith, everyone must always wrap themselves in a thick layer of bullshit to appease the gods above or else face sanction.
> The problem with this stupid website is I (or no one else) couldn’t even properly reply to you due to censorship.
You know you're welcome to make your own community, right? You're not actually being censored, you're just in a venue that doesn't support communicating how you'd like.
> I knew the autistic mods would ban me just the same as if I was actually doing so because they lack the prefrontal cortex material responsible for comprehension
You've succeeded in your goal of posting a sample of what actually shitting on someone looks like. Hint: it doesn't look good on you.
> So engaging with you, or really in any valuable conversation on HN, is an exercise in bad faith, everyone must always wrap themselves in a thick layer of bullshit to appease the gods above or else face sanction.
Engaging with society requires wrapping everything in a think layer of bullshit. Being able to show some restraint is what keeps things civil, because there's a wide range of social norms. Get a therapist and learn how to cope with it.
Again, you could also find or create another venue. You're not entitled to a platform.
Alternatively I could tell you to fuck off, because absolutely nothing about your statement is factual or fair in even the slightest.
People like you love to say shit like “well just go make you own platform”
Cloudfare will ban you, AWS will ban you, the investors that are poor fronts for private equity will ban you, it’s controlled. You won’t be able to take payments in your little rebel SaaS because Visa will
Kneecap you.
You pretend that there’s some kind of free, open exchange of ideas where some free market determines what is popular and thus allowed for social discourse. Instead there’s the allowed discourse of the elite, which you freely participate in with glee, and worst of all you pretend you’re free.
So please keep simping like a good little serf. It does all of us good when we conform to what your institutional therapist thinks is “good” lol
There’s a big difference between the people in control of a company back-patting everyone when employees’ livelihoods are actually in danger, and back-patting an individual for sharing their personal projects and experiences in good faith even if they have a lot of room for improvement.
> "maybe you were a shit employee and were fired for it and your employer isnt in the wrong?" or "your Show HN really isn't that impressive". We're not allowed to say anything critical of other HN users without being downvoted or reprimanded by dang.
These things absolutely can be said on HN, if you list some points that make you think so. If OTOH your comment ist literally just that one sentence then I don't see why it shouldn't get downvoted and flagged. This is not the YouTube comment section.
> These things absolutely can be said on HN, if you list some points that make you think so.
Only if what you say doesn’t oppose the current zeitgeist of the thread. I’ve seen some of the most well thought out and level headed comments get flagged to death while some insult floats to the top.
HN cannot escape the group dynamics that are universal to all gatherings of human beings, this is likely to have been true throughout the history of this site, even if to different extents.
If their point is that they get mad because people would downvote "Your Show HN isn't really that impressive", then I guess so. I would certainly downvote that kind of comment, because it's pretty much by definition a jerky comment.
But I have seen tons of reactions to Show HNs that are "How is your product different from XYZ?" or "How will you address problem Foo?" Those comments actually bring something helpful to the discussion. I've also seen, in cases where the Show HN isn't something the community generally appreciates, get fair comments along the lines of "Your product just appears to make it easier to spam people. Why should we like this?"
Offering critical commentary without a point isn't something that adds to the value of the site.
I would not say that HN does this constantly or agree with much of what you write. In general I think written/upvoted comments tend to be biased towards being critical[1] and disagreeing with the comment/article being responded to.
In general, the guideline is for comments to be curious and “maybe you were a shit employee” or “your Show HN really isn’t that impressive” do not sound to me like they are curious. However I realise it is hard to describe in general comments that would surely contain specific things.
An alternative strategy to the former general comment might be to try to get curious about the details more. For example one might discover that the likely cause was a breakdown in communication leaving the employee unable to understand what was actually wanted and being fired for failing to read minds to meet expectations. However I think it can be hard to actually be curious here rather than applying some kind of smug-Socratic method[2] asking innocent-seeming questions where the answers lead to one’s unwritten hypothesis, though perhaps the answers can give an opportunity to update. I think it can be doubly hard to do these things in a kind way, especially when, like in the general examples, the topics are personal to one participant rather than a typical internet discussion where parties may pretend to be disinterested.
[1] There are two common meanings of ‘critical’. One is related to ‘critical thinking’ or critiquing: looking specifically and carefully at the faults or merits of something. The other meaning is similar to ‘disapproving’. Generally the former kind is accepted here and the latter is less accepted, though I think comments which are negative and not particularly thoughtful or curious often do better than I would hope. Further, the acceptance of the former kind of critical discourse may sometimes be hidden behind for comments that perhaps fit into the latter sense (when they don’t fit I would say it is because they are too mean to really deserve to be called critical).
[2] I think this roughly corresponds to what the guidelines call cross-examining.
Never really noticed posts about people getting fired and complaining. My impression is that the HN audience is generally pretty strict on work behavior.
"Oh, you slightly smiled when everyone else did not? Not appropriate, we are a serious and professional enterprise, you should be fired and restricted to ever work in this industry again."
That said, claiming the audience is or does something specific is probably always a large generalization.
"your Show HN really isn't that impressive"
On that I do agree. The criticism is often very direct. There is a certain aspiration that product or solution x must be either the best or it doesn't deserve to exist at all. On the other hand such criticism can still be valuable if it is still received as hinting to stuff that can improve.
I don't know if this was the meaning of the OP's message, but the way I read it tells me that he dislikes the "everything is fine" BS that some companies keep on doing, not the fact you still need to criticise constructively, which "your show hn isn't that impressive" clearly doesn't do.
Realistic, yes, but you don't have to be an ass, that's kind of how I interpret it.
>We all believed that we were awesome and would continue growing and winning.
Hilarious since Klarna has one of the worst customer service experiences I have ever witnessed.
Their real monetization strategy seems to be to get your mobile information. It is not necessary to micro-finance through them, just to do anything at all after that!
They actually have a website, which you might think would be an alternative way to manage your account, however it also requires your verified mobile device (not a phone number) to access.
Now, they never tell you any of this and none of the people that work there seem to know that this is policy and are shocked that you can't do things like check your balance, pay off your balance, basically anything you might want to do.
I worked for a company where the C-suite used the phrase "drinking our own champagne" instead of "eating our own dog food". To me, this just oozed insecurity about the product and the company.
IIRC there was an ad involving a dog food manufacturer feeding their own dogs the food they made. "Dogfooding" then became synonymous with using your own product.
I always thought it was intentionally derogatory in order to make the listener really think hard about what they’re outputting.
I.e. what you’re making is bad. It’s going to be bad. Force yourself to use it until you understand why it’s so bad, so that it’ll be as not bad as it can possibly be for the people you’re offering it to.
> In 2006, the editor of IEEE Software recounted that in the 1970s television advertisements for Alpo dog food, Lorne Greene pointed out that he fed Alpo to his own dogs. Another possible origin he remembers is from the president of Kal Kan Pet Food, who was said to eat a can of his dog food at shareholders' meetings.
I think this term started in the enterprise software space, and was probably coined because subconsciously, enterprise software sales and management people realized that their products were on par with dog food - ground up mystery stuff that is just barely edible except for animals that will practically eat anything. But package it up in nice marketing and sales efforts, and away we go!
This is coming from someone who spent WAY too much time in the Enterprise software space.
> experiences that untreated ADHD blessed me with was routinely failing classes. That repeated exposure to undeniable failure
Huh. Never thought of this. In a balanced culture, this offers no advantage. But in one still recovering from the self esteem days, when even games were encouraged not to produce any losers, I see how that awareness is competitive.
I used the word blessed somewhat tongue-in-cheek. I'm not sure I would call it an advantage, rather just a different set of experiences than a large majority of the tech world.
I suspect most standup comedians are in a similar boat, so to speak. You keep failing until you succeed. You can't keep your audiences recycling only the same old jokes over and over, you need to keep writing new ones, tuning them over and over at small gigs so that you've got enough material that works for the bigger shows.
More than just failing, though, I think the lesson is learning to tolerate failure, and learning from it so that you can try again.
> More than just failing, though, I think the lesson is learning to tolerate failure, and learning from it so that you can try again.
This is the real trick.
From my own personal experience: I went through a period of intolerance to failure -- "failure can't happen again". hypervigiliance[0] is just as problematic as negligence.
Accepting that failure will happen has allowed me to unwind quite a bit, aided in finding more empathy for others, and changed my focus to managing failure and risk. Somewahat oddly I'd come to that spot in regards to managing software in production earlier than I had been able to apply it to my own psyche.
In a way, accepting that failure happens is an optimization technique. It affords the room for curiosity and forgiveness that is required in practice to have the greatest reduction in incidents or impacts of failure over time.
It is going sound odd, but I mildly disagree. Long time ago I listened a lecture of a Harvard professor, which went something along the lines of and I am paraphrasing:
>> We did so well to get here and maybe we just have not failed enough.
This really stuck with me, because in my eyes failing and having to earn each 'win' is what gets job done. Yeah, there is always someone smarter, but there are few people, who can stick to something until it is solved. I am actually saying ADHD may have been a blessing in disguise since it forced you to work harder for things others take for granted.
And that is apart from being able to see things in ways majority of population does not.
I think a lot of this is that nobody has long term incentives and plenty of people believe "we are awesome" is truth.
As a developer, if I paper over problems and claim to have resolved them, people will love me, trust me, and give me bonus pay. If I bring up problems, people consider me a trouble maker.
And when the bill comes due, I will just jump to another company.
I really think this just comes from the fact that most startups are either:
1) from California
and/or 2) have founders that worked in California
and/or 3) raised money from VCs in California
I'm all on-board with it being better to be an optimist than a pessimist, and also on-board that destructive criticism doesn't really "serve" anyone.
But there's just this rampant over-optimism like nowhere I've experienced.
The culture of "we are awesome" to me - is culture of California.
I prefer California culture over doom and gloom and pessimism - but a little more reality, I think, is welcome.
The thing that rubbed off on me about California that I'm really grateful for is to always start with the positive. I'm definitely a happier person from getting absorbed into that culture.
But I think when you get to the point where you just completely ignore or don't speak about the negatives, it's not really helpful anymore. It's just delusion.
Wonder how similar Sweden is to the North American west coast, culturally speaking. It is the center of Scandinavia's tech scene, after all, and has birthed many companies.
A comment from when I knew theater and film people in SF: "In New York, they tell you when you suck. In Hollywood, they don't call you back when you suck. In San Francisco, they don't tell you that you suck. So you can suck forever."
(Yes, SF once had a film scene. Mostly because there was cheap warehouse space South of Market usable for production.)
Interesting point, but the example here is HQ'd in Ohio. I think some of what you talk about in California is true but you could say that about New York, or once upon a time Hong Kong. Places where ambitious people come to breed a certain mindset. California is a big state and very rural parts California arre like Idaho (I'm not talking exurbs).
I dealt with Klarna once, made a mistake. Gmail filtered out all their invoices & reminders, had to pay reasonable extra sum. No leniency, fine, but nothing special or awesome about them, they are just a regular credit company. No special tech or whatever, no special awesomeness, no special kindness.
Gmail filtering out invoices has been a big issue for my btw, Im forcing the government to send me invoice in print, even though they don't want to.
I worked at a place where the executives constantly sent out company wide congratulations emails, to each other.
The HR director wrote “why it is a great time to work at X part 1” and then we did some layoffs… and part 2 was sent out the next day without missing a beat.
That company eventually stumbled and failed largely because they wouldn’t cancel a product that was clearly deficient (a far superior product was available but wasn’t invented by the established engineering manager, so they killed that product instead ).
I think people in an organisation are constantly confronted with the problems and downsides. Engineers always know where the problems in the code and architecture are. Sales people and support always see the complaints from customers. CEOs see how high-valur prospects always find new issues to lower the negotiated prices and how features are delivered late. And so on.
My interpretation is that the overly positive view aims to drive the positive points forward and remind everybody about the positive things and how well things work on a macro view. If you stick small negatives in the message to cover "reality" this is what sticks.
I can't stand these motivational speech, but I also don't see a good speech for high level talks and not saying anything is bad as well and for some kind of people that seems to give them a push.
> The self congratulatory back-patting (even if it's just "everything is fine, we're doing great") is treating success like an achievement. Success requires vigilance. Excellence is not an achievement, it's an activity.
I used to wonder why friends of mine would get gifts for things like graduating elementary school or even high school. I asked my father for something because I was graduating highschool on the honour roll, and he told me completely stoned faced "i am not going to reward you for things that you are just simply expected to do". That sticks with me 20 years later and I apply that to everything I do in life, especially work.
If you aren't succeeding, you are failing - and I was expected and taught to succeed by default.
> If you aren't succeeding, you are failing - and I was expected and taught to succeed by default.
Nitpicking, but you were expected to succeed by default, and also taught to strive for success by default (and presumably also taught the tools and approach to maximize likelihood of success). People cannot be taught to "succeed by default", anymore than someone could be taught to "win the world series by default".
And then that unpacks the challenge of this particular world view (and points at why the 'self-esteem thing' is a thing), is that learning to strive for success, and learning the tools and methods to achieve success does not mean you will actually reach success (this would just be a variant of the just-world fallacy). The challenge is how do you create the motivating factors and structure for as many people as possible (hopefully everyone) in your society/culture to earnestly strive for success, but not crack apart when they encounter continued failures.
I've had my fair share of failures that's for sure. I'm do not expecting to actually succeed every single time, but I am putting in the best effort to at least try to succeed instead of just trying to coast along or shrug it off being like "meh, just wasn't in the cards". I also don't expect massive celebrations when I actually do succeed - success is what is expected. If I'm supposed to make the big sale, I don't get a party after I just move on to the next big sale. It's what is expected, not exceptional.
That's fair. And to be honest, I have a very similar mindset - so I'm super not judging.
Just making an observation that scaling this up to a population level is tricky. Easy to mangle up the nuances when trying to impart this to children. I suspect you need a relatively stable environment for this to really take hold as well. And finally, you do actually need to be able to feed the child some degree of external success to get them to actually buy into this.
Maybe I’m not articulating myself correctly because I certainly do not want to imply or say that there is no joy in my life. I guess the “joy” in my life is just intrinsic rather than extrinsic? I get immense satisfaction out of my work itself and “succeeding” in and of itself is motivating. I also find mentoring/helping others succeed to also be extremely rewarding. The greatest joy I get in life is seeing how my actions have improved the lives of others in some way.
I also feel very fulfilled from my personal relationships, family and lifestyle that my “success” affords me.
I feel sorry for you that your father never got you that gift for graduating high school. My father got me an HP calculator and it's still one of my treasured possessions. It has had no negative impact on my success.
My father has gotten me plenty of gifts, for a variety of reasons and sometimes for no reason at all. Don’t get me wrong, I love my dad very much and he is a very generous man :)
In Brazil, where I am from, the big achievement that warranted a celebration used to be graduating from university (I guess you call it college in the US). For many families the celebration was also the gift — those things don't come cheap.
But in the last 30 years or so, I have noticed that many now celebrate completing high school, completing primary school, or even completing kindergarten (!) — and not just something symbolic or small, but big events.
Maybe I'm just old and grumpy, but this rubs me off in the wrong way: I also believe that these "achievements" are things that you are simply expected to do. Congratulations and positive reinforcement are always welcome, but when there is an expectation of a reward then to me it crossed the line into something unhealthy.
In Canada (I don’t know about Brazil myself) it is very very difficult for children to “flunk out” of the public education system. The system is setup to push every line through as much as possible. So to me, the “participation trophy” culture which is similar to what you describe in Brazil is especially egregious to me.
It comes from a time when it was not so mundane. My grandfather on one side was the first in his family to truly read and write well enough to have a job involving it.
That is a big deal and far from a default.
Yes, now graduating high school is not an achievement, but it used to be quite one, especially for the average person.
Nothing matters as long as a company is growing. You don't have to improve or have the best tech or the best sales or do everything right or have the best culture. The only thing that matter for a company is to grow.
Ben Horowitz talks about this somewhere near the start of his book "The Hard Thing about Hard Things“. If I remember correctly, he said that it was very difficult for him as a CEO to load the problems he had onto his employees because handing the burden over felt bad. He was responsible for the burden. It makes some sense if you think about it like that. Later he did turn things around and share his worries and to his surprise the employees weren’t to worried and actually started to solve some of the problems.
> failure is the default. If you're not constantly fighting against failure, you're failing.
This. Any success, let alone wild success is highly unlikely. Just assume you’ll work on interesting problems and at some point you’ll realize either you or the problem will change in a way that makes disengaging the right answer.
No, it's not. Your focus will probably take a sharp turn to another thing, but because you're not entertained. Here... it's probably because ADHD doesn't mean you'll fail, even if untreated.
I think social media today makes you think you have many conditions, when in fact you just have normal behaviors. You don't need to have ADHD to get distracted, especially if your brain is trained to pay attention to a thing for 15 seconds max by said social media.
Try reading paper books, or focusing your eyes on a candle for 5 mins a day, your attention will improve.
Wow, that sounds so poorly handled. Not figuring out a way to tell everyone affected at (nearly) the same time is probably the worst sin.
Best layoff I ever went through was when my boss came to our team and said, "look, don't tell anyone, but we have a layoff coming in a few days. I have to let one of the three of you go. Do you want me to decide or do you want to decide amongst yourselves?". She knew we were good friends outside of work and would probably make a better choice than her.
I ended up volunteering because one other guy had just bought a house and had a baby and the other guy had debts to pay off and I didn't. Ended up working with both those guys again. One of them ended up leaving and getting a new job, then he pulled me in after 1.5 years of unemployment, and then we pulled the last guy in after he eventually got let go.
> Best layoff I ever went through was when my boss came to our team and said, "look, don't tell anyone, but we have a layoff coming in a few days. I have to let one of the three of you go. Do you want me to decide or do you want to decide amongst yourselves?"
Judging from your reaction, it sounds like yall had a great work environment, and that this was a good way to handle the layoff for your team. It sounds like it went smoothly, which is 100%, A+, great.
But HOOO BOY, that was a HIGH RISK move by your boss. I sincerely can't imagine the clusterf** that would've resulted from that at some of the places I've worked. Good GOD. This is an invitation for a lawsuit on a silver platter, holy guacamole.
Fwiw there is a more normalized practice that resembles this and is, afaik, not a massive hr risk: openly offering a voluntary severance with defined benefits.
Obviously it's not a great signal to those who don't take it about the health of the company, and you might lose a bunch of people you'd rather not, but I think allowing some level of self-selection is good when it's possible.
I find it rather rare that a relatively compentent dev couldn't get approximately equal compensation working for some other company. So if offered $X for volutary severance, where $X at least N months total compensation, most devs who can get a similar job in less than N months will leave. This leaves you with least capable people, which is (usually) not what's wanted when doing layoffs. (This is of course assuming that interview performance is correlated with work performance, which is not necessarily a great assumption to do)
I think you need to consider that we're in the context of a job market that has been hoovering up devs for the last 10 years. There are 30 year olds who graduated into a fairly good market who are now expeirenced developers who have never seen a really difficult job market. It's all fun and games if you're a fungible 20 something who can go off to be another cog in another machine. But if the market dries up - as is starting to happen with all the big names slowing, it's a very difficult situation to be in, and long term unemployment isn't just a financial burden, it can be a massive emotional burden as well. One thing that has always troubled me in my career is that I look around and I don't see many 50+ or 60+ year old engineers, and partly it's that our industry is still emerging and 60 year old engineers pre-dated the industry. But some of it could well be that at some point attrition pushes people permanently out of the industry.
I think there are two problems with this in practice:
1) In the end those people will leave anyways once it's obvious the ship is sinking, so I think you wind up with a double whammy of attrition.
2) Mass layoffs don't usually allow for a particularly good perspective on who is a high preformer because it's hard to vet decisions on that scale. Also this assumes that performance is the primary axis, and not cost or tenure. You will likely lose high performers along with low and medium in a top down layoff.
This way you probably lose the best people, the ones who is in high demand on the market (probably having several informal offers right now), and left with mediocre ones, who are too afraid to look for new jobs.
My primary interest in any work is the product, the team and the compensation. The later is negotiated beforehand, so if the team is not severely impacted (brilliant people who I happy to work with are staying) and there is no big changes in product (I still feel that I am doing something meaningful and useful for people) - there's no reason to leave.
Nobody in their right mind fires brilliant people. And brilliant people are the ones who are fun and delight to work with. It may sound harsh, but leaving some ballast weight behind may be even healthy for a team.
Brilliant people are expensive. Bleeding companies need to cut costs. Layoffs are usually a mix of poor performers, high cost talent, and tenure ordering. Sometimes entire departments full of brilliant people go because the department isn't profitable.
Again, you have in your mind a spherical cow of a layoff.
What would the grounds of the lawsuit be? I can think of reasons to not announce a layoff in advance, but I can't think of why what the boss did was illegal.
Person X argues they only volunteered because Y is pregnant. ‘If I had stayed, I would’ve been the subject of retaliation because I’d look like a bad person.’
In discovery, it’s found that person Z pinged a friend and said ‘yea, we totally couldn’t let C be laid off. What kind of person would fire a pregnant woman?!”
That’s pretty strong proof that membership in a protected class factored directly into a retention/compensation decision.
This is why managers are (/should be) trained to handle this with lawyers involved.
Wow, that sounds awful for me. Being a boss means making hard decision, he just dumped that on the three of you. Glad it worked out for you, but I can't imagine this working in most situations.
That is awesome for a cohesive, high functioning team. I worked at a company with some obvious (to everyone else) under performers, and as much as I wish they had not been a layoff, I would have been pissed if some of the nicer members of the team had volunteered to take the bullet.
That said, the standard layoff protocol only got rid of one of them, and the other only left after reacting badly to the slight uptick in performance feedback (suggesting his lack of self awareness)
She was a great leader. She recognized that our team was cohesive and could make a better decision than she could. She was one of the best managers I ever had.
The reports were all good friends, she knew that, and gave them the option for her to decide or them. She apparently didn't know the personal lives of the reports as well as they did themselves.
I guess it might be attributable to how much managers consider themselves to be, or actually are (subject to org limits), a part of the team, vs just managing it
Context and relationships matter. Apparently this manager had a relationship with her reports where that would work. It's obviously not going to work in nearly any other situation, but kudos to her for figuring out what would work in this situation.
Bottom line is that all of the reports involved were reasonably ok with the outcome--no one is ever happy about getting laid off--and that is far better than the situation in most layoffs.
There's a reason why recruiters at Spotify jokingly referred to Klarna as "our relocation agency". Klarna would relocate folks to Stockholm who'd then leave within 6 months to a year once they realised the shitshow they signed up for.
This was in 2015. They didn't value people back then or care to treat folks with the tiniest amount of decency. Seems not much has changed.
But generally when people feel like the best way to advance their career is to leave, then I don't think that joke works in Klarna's favour as much as they might think it does.
I tried to get a big-ticket item using Klarna. Had the money in the bank, just thought I'd give it a go. It failed multiple times without any sort of meaningful error message. Apparently each of those failed attempts hit my credit score. I told them to close my account multiple times through multiple channels (chat/email/etc.) and reverse any damage done to my credit score.
Till this day I get monthly balance/statement emails from them even though I have yet to use a single penny of their credit facility. Too bad they don't use all that marketing budget on competent customer experience/service.
Yup funny how big they growth becouse they pretty much dont add anything to consumer experience and they are well know issues like if you know social security number you can order stuff.
Oh all the things I wish they would use their marketing budget on. For instance they still can't correctly compute different VAT classes in their merchant reports.
After the third attempt I decided to chat with Klarna support. They saw the attempts and told me to stop trying as it would be damaging my credit score. What exactly is the truth? I don't know. Klarna is a black box to me.
My guess is you were accidentally using 'Klarna Financing' - that's not their main product and not what most people think of when you say 'Klarna' - it's a formal consumer-credit loan. It's like getting a car loan, rather than paying in instalments, as their main product is.
And yeah that'd be apocalyptic on your credit score - equivalent of being rejected for a car loan multiple times in a day!
It's not a big deal on credit scores at all actually. FICO-8 and the other common credit score algorithms all make the assumption that multiple credit checks in a short period of time just means the person is rate shopping, which is an extremely common thing. When I got a car last year I had ten hard lookups in a single day- this didn't do any more "damage" than a single lookup.
On top of that even hard lookups stop affecting scores pretty quickly. They really exist to prevent someone from taking out a bunch of loans without each other loan company knowing about it.
I do know that things like the Vantage score, used by credit karma and nerd wallet, put a higher weight on these checks. This is, in my opinion, purely to drive engagement to their website. FICO is what is actually used by lenders, and tends to be more stable (in my experience).
It was the 0% Klarna option (the only Klarna option) on the Google Store if that makes it any clearer. I stay away from this stuff generally so I can't tell the difference between these options when I'm trying to checkout.
Klarna generated $1.42 billion revenue in 2021, a 32 percent year-on-year increase. A majority of Klarna’s income comes from interchange, processing and merchant fees.
As Klarna has expanded its BNPL offering, its losses have increased. It reported a net loss of $730 million in 2021, a 337 percent increase on its 2020 loss.
I would say its surprising that this company is still in business at all with numbers like this.
I recently left an 8,000 person company that's been on a 2 decade loop of private money to publicly traded and back a couple times now. It occurred to me that in 25ish years (about 10 of which I worked there) that it might never have made any money - I can't remember a profitable year ever; we were always seeking growth above all else. I now work at a small SaaS company of around 50 people and it's only ever made money.
Every day I feel like I live the Homer Simpson quote, "I don't know how the economy works".
> I recently left an 8,000 person company that's been on a 2 decade loop of private money to publicly traded and back a couple times now. It occurred to me that in 25ish years (about 10 of which I worked there) that it might never have made any money
That is crazy if true. My fear is that there are a ton of tech companies like that, just chasing future profits or an acquisition, but not actually creating anything of value (at least in terms of profit).
I don't know. It just doesn't sit well with me knowing that a lot of products we build don't actually make any money. We're all just part of some weird system of money re-allocation and the software is just there as a signal that money should change hands.
I actually worked providing infrastructure to tech companies; from large enterprises to startups. I think I realized starting in the early to mid 10's that all the startups I was working with were just about taking VC money to provide the founders with hip, well paying jobs - the stated goal of the company was mostly immaterial and the "change the world" talk was virtue signaling to the rank and file so they don't feel so bad about their place in it. I wasn't all that thrilled but I've got to eat too and I'm not built for retail or labor, so what was I going to do?
Might be worth noting that I tend towards the depressed side already so my point of view might be a bit skewed. But when I watch Office Space or other works by Mike Judge, I realize I'm not exactly alone at least.
And keep in mind that this article is about a Buy Now, Pay Later (BNPL) type business - what about that is all that revolutionary? I'm sure the leadership wrapped it up as "empowering people to purchase goods they need today" or something else, but everyone knows they're selling people baubles like TVs with predatory lending, right?
Story time. I was looking to buy a 911 in the past. Found one at a dealership. The car was 3 years old, just off lease, in good condition, and with no accidents shown in Carfax.
I searched the VIN number in the state’s DMV car registration database. Well well. The car had an expired tag and had high thousands of dollars of unpaid taxes, fees and penalties against it. The owner had never bothered to pay any taxes and fees over the years. I would have to pay all those when doing the car transfer at DMV.
I was kind of pissed and disgusted. I then searched the VIN number on the web. Found the VIN in a post in a car forum for an attempt to sell the car. It had a phone number!
I searched the phone number. Got the name of the guy and his company. He was the founder and CEO of a startup.
DMV doesn't care who pays it. They won't process the title transfer of the car as long as there're unpaid taxes or fines. Imagine I've already paid the money to make the purchase, and later going to DMV to transfer the car title but find out I couldn't due to unpaid fines. What could I do? Either paid the outstanding fines or sued the owner to revert the sale. Headaches all around. I didn't go through with the purchase at the end.
I talked to another car dealer and asked him about it. He said this kind of car was usually sold to people in another states, where their DMV won't enforce California's taxes and fines.
The lesson here is be sure to check for a clear title on the car, including DMV fees and fines, before making a purchase.
Exactly. I've seen a lot of media coverage on Klarna (I'm Swedish), often with the angle "wow, innovation". The question I've too often wished journalist had asked is "Why?", what's the benefit of what you do? Except being more shiny.
Lot of waste in the tech sector. Sad how many skilled people work endlessly on more effective ways of pushing ads and loans, to make us desire and buy things we don't need with money we don't have.
Revolutionary is of course an extreme stretch, but they do add unique convenience to the checkout process.
No user account creation, no entering of address and credit card number. Just click purchase and confirm with BankID. I also like that they retain neatly organized purchase history across all vendors, including permanent storage of the product images.
I prefer klarna so much, that I occassionally simply go to another etailer if there is no Klarna checkout option in the first place I try to buy something.
The transaction is finished immediately. No need to de-select any "Pay later" options etc. No need to install their app on your phone.
No need to share your purchase history with some third party with an yet unknown (undetermined) monetization model.
Swish is owned by your bank, and you already trust them with your transaction history.
Buy Now Pay Later actually has a really good use case, it’s for people who may be wary of credit cards, interest, and or low credit scores. For example, many people who wouldn’t take out credit cards will use BNPL. Also, usury is prohibited in the major Abrahamic religions, so BNPL can also work for client avoiding interest loans.
So before I worked at the last job, I worked for a camera store back in the last days where those were still generally a thing (2004-2010 - it wasn't too bad of a job for a kid in school). We offered by now, pay later back then, and I don't think we invented it either. Of course it was basically just a credit card application, and there was no requirement to pay it off within a set amount of time, but if you didn't, then they'd hit you with all the interest that had quietly been accruing during their "introductory period" or whatever they called it. Which is to say that it was scummy and deceptive, but not much more so than other American business practices and certainly less than others, and hey they had to make money and eat too.
Perhaps Klarna really is better, but then again maybe that's why they're hemorrhaging money at such an impressive rate.
I know PayPal "Buy-in-4" has no interest or late fees in its terms. So in that regard, it really is a 0-interest loan, paid in 4 installments. I haven't looked into Klarna, but there's an NPR Planet Money podcast about these types of schemes. The profits are made up by the fact that demand increases compared to credit cards (many are ineligible for credit cards, or don't use them for whichever reason), and that the merchant is charged a higher rate by the BNPL company.
It's not crazy. If you grow the company, and if you have had stock compensation at any point in the past, it's in your interest to scale the company as much as possible. Profits don't go into your pockets, but the growth does.
If a company doesn't make money, cash flow and / or profits (preferably both), it is just under cutting the competition (if smart) or on its way into bancrupcy (if not so smart) or both.
I agree that many are just trying to undercut the competition. My pet theory is this is having an effect on consumers' expectations for tech-based products. Specifically, nobody thinks anything is worth paying for, or at least only want to pay a small price. That leads to only big companies being able to compete in markets since they can subsidize products for a long time.
Wikipedia-
"First CityWide Change Bank – Two ads promote a financial institution whose only service is providing change (e.g. "you come to us with 16 quarters, 8 dimes, and 4 nickels, we can give you a 5 dollar bill"). How does First CityWide make money doing this? As one service rep says it, "The answer is simple: Volume"."
They charge a commission now, but originally, they didn't. They pitched the system to stores as a way of freeing up cashier time wasted counting coins.
For the past decade money has been effectively free to borrow with interest rates at zero. All the companies that immediately went bankrupt, into layoffs, etc. when interest rates were raised this year were coasting on these financial fumes.
Powell wants to keep wages tethered to his preferred reality of 2% inflation versus the actual reality people live on. The real issue with inflation is it devalues the public hallucination; fiat money: https://www.wsj.com/articles/transcript-fed-chief-powells-po...
The reality is “people need to eat”, will trade as they must to do so. We don’t actually rely on government officials to do the work; we placate the die hards by speaking in the traditions. They’re yanking on the leash they have.
Big tech looking to axe senior talent and big pay days for cheaper Gen Z grads; a quiet wealth redistribution plan. Some of the rich senior tech people would move on to cheaper locales and perhaps build businesses.
We’re in the ML era and a lot of senior folks are from the “manually program a machine” era; that’s a way over valued skill set now; it’s everywhere.
Cheaper talent with the latest collegiate training not the old ways baked in, could offset the expense of moonshots, hoping to boost an ML-backed cloud economy post generic server backed cloud.
In a lot of ways internet businesses are like buying bonds. You pay some cost to acquire a customer and will get revenue from them over time. You can calculate a present value for that customer based on that future revenue. As long as that value is more than what you paid to acquire the customer you're making money.
And if your numbers are right then you, more or less, want to spend as much money as you can buying customers. So that's how companies with numbers like this continue to operate.
To put it simply, Klarna is spending a billion dollars to buy customers that will generate more than a billion dollars in revenue. The catch is that you have to pay now for later revenue. So your numbers look like crap until your existing customers far outnumber your new ones.
all businesses are risky. that's why we have capitalism and there are bunch of people who are willing to take the risk and rewarded for taking that risk
debt is a fantastic instrument that solves a production / consumption mismatch of both individuals and humanity.
A 55 year old is the most productive member of a society, but that is also the age where you start to consume very little.
Imagine if you had to 'save' to get your college education, your home, a laptop, or starting a business. There is a reason we don't ask babies to 'pay up' for milk or shelter.
Imagine if Larry Page or Sergey Brin had to work and save to start Google.
Imagine if government had to save trillions of dollars before investing in Carbon Capture and renewable energy generations.
Yes, all good things can be abused. But you can't prevent good things for 95% society because a 5% of the society abuses it
I do however think consumption debt, for goods such as clothes or the next iphone, is harmful.
They're not investments, like an education or a car.
It's a tax on people who don't have money in the bank to buy such things up front.
Usually such loan "services" are marketed in a way that hides the effective cost of the loan to the customer. Especially problematic for young people less experienced handling money.
> But you can't prevent good things for 95% society because a 5% of the society abuses it
Sounds like you thought I suggested prohibiting debt in general. That's a misunderstanding. It's definitely possible to prohibit predatory lending strategies.
I rather travel the world, eat great food, take tennis lessons, dance into the night when I'm in 20's and 30's where I get the most enjoyment rather than in my 60s where my body is not in good physical shape to do any of those things.
The fact that I travelled the world in my 20s may also enhance my own future productivity.
I would even further claim that not enough people go into debt. There are plenty of young people (70% or more) in developing countries who can get into travel, education, iPhone/Samsung, great food debt and their country (and the rest of the world) will benefit immensely from it in the long run.
You can't loan for consumption in your 20-30s, planning to pay it back in your 40s and 50s. Klarna does not even offer loans beyond 36 months, and month 1 to 36 you have 20% interest rate! If you skip a payment there are steep fees.
Klarna is for short term loans. Like, half a month.
Klarna is definitely not offering their service to poor people in developing nations. Even if they did, how would a 20% interest loan for an Iphone help anyone escape poverty?
They're much riskier bonds. The market can change, or competitors can try to win customers over, or anything else to throw out those lifetime value calculations.
> As Klarna has expanded its BNPL offering, its losses have increased. It reported a net loss of $730 million in 2021, a 337 percent increase on its 2020 loss
Yet the tone from the acticle is that employees appeared to think the company was successful?
At least in tech there are people who have had decade+ long careers where it was very feasible to never work for a company that actually made more money than it spent. I've been at multiple startups that had VCs pressure leadership not to make profit because that would hurt growth of some other KPI of interest (users, revenue etc).
In the last few year many of these people have seen these companies go public, and their imaginary Options/RSUs suddenly turn to liquid assets. Company hasn't started making profits, P/E is negative, but TC has gone up by 50%-200%. That certainly feels like success.
Looking back at my own career the companies that made the least profit (including negative) are the ones that have paid me the most.
I'm old enough to remember the pre-dotcom bust chats of "new economy" and "things are different now", and how all of the stuffy old finance people who thought businesses should make more than they spend where ultimately proven correct.
For many people, even in their late 30s, the ability for a company to actually make more than it spends has been an academic curiosity, hardly relevant to the success of a company.
Agreed, and the opposite is true: I started at a small public company which had stopped growing and become profitable. It was targeted for a hostile takeover by PE who thought it could grow more.
To their credit it did, and (to the extent your willing to believe unaudited financials) again became profitable.
I've worked at places where the slide decks were always full of exuberance. At one of them they were exuberant right up until the moment the staff found themselves locked out of the offices after being told that a liquidator was in charge.
The company I used to work for got acquired by a listed company. At the same time, I was doing finance module at the university. One assignment was to analyse a company's financial reports and come up with a conclusion. So I analysed the company I worked for and the outcome was that I need to get out. At the same time the company was sending communication as it's about to discover time travel and unicorn milk.
> At the same time, I was doing finance module at the university. One assignment was to analyse a company's financial reports and come up with a conclusion. So I analysed the company I worked for and the outcome was that I need to get out.
That's interesting. My OH is almost half way through her MBA and for one recent module, she chose to analyse her current employer's financial reports and come up with a conclusion. Her conclusion is also that she needs to get out.
I wonder how many tech employees can actually read a financial report, though?
> Her conclusion is also that she needs to get out.
It depends. I haven't been RIF'd before but would take a package if they were layoffs if I had the opportunity. I'd also use as much of unemployment as I could for as long as I could. Basically I'd be looking to maximize the amount of time I can go before I'd need another job.
Just because a company appears to be running out of cash doesn't necessarily mean you need to leave immediately if they do downsizing.
To my surprise hardly anybody outside, and even some inside, of finance can. Not that I'm an expert, but I understand a balance sheet, can interpret the expebse lines, understand a cash flow sheet and can read (after having been to a couole of audits) the SOX relevant audit statements of public US companies. And yes, those tell you an aweful lot about your employer. And yes, part of me came to the same conclusion as your OH and the OP.
Employees base company success on internal metrics and how they're being paid, few employees bother looking at publicly available numbers lest they "jinx" it.
(Or the ones that do see the writing on the wall and bail, or decide to ride it out as long as they can).
Since Uber seems to be a benchmark for VC start-ups (Uber for X) and Uber is still losing money in the tens or hundreds of millions per year, I am not surprised that employees think that Klarna is a success.
Up until a massive expansion push some years ago, Klarna used to be a profitable company. It expanded from 3200 employees in 2019 to the 7000 that are there now. They also started spending money on experiments that had not much to do with the core business.
For transaction processing, wouldn't a 1-3% margin be about the maximum achievable? That would translate to about 15 million dollars in potential profit against a 730 million loss.
I think Klarna can charge slightly higher fees to merchants (it looks like they charge up to 6%) as sales increase with buy now pay later. Also they probably think they can make money off of servicing the debt (late fees, interest on balances).
Per https://www.klarna.com/international/regulatory-news/klarna-... their volume was $80B last year, 1.4B was their cut (1-3%) aka revenue, and the profit would depend on bunch of things such as their marketing/sales spend, wages, debt servicing, etc and most likely has been negative.
Edit: not "most likely" - apparently they lost to the tune of $700M
From the outside, I find it difficult to judge as management might have been focused on top line growth (given investors preferences in recent years). A (possibly) changed focus could now mean a very different profit profile will develop.
A classic argument is future sales are equivalent enough to be an asset. So as long as your balance sheet including future sales is growing faster than your income sheet is shrinking, its "OK".
There's a lot of assuming spherical cows going on. If the bean counters like the result when the average customer is milked for six years until having to replace them, that's great, unless customer service is so awful the average customer is gone in six months, or a competitor comes along in two years and wipes you out, market changes evaporate the revenue stream in five years, etc.
BTW this is the housing bubble in a nutshell. Lets say you buy a shack for half a mil at 6% for 30 years which from memory is almost exactly $3K/month. Not because you would, but because these are engineering estimates with very round numbers that are easy to memorize. Anyway, you'll spend 30 years in a row with a negative income statement of losing $36K per year on that shack. Actually you'll lose a ton more money due to maint, taxes, insurance, PMI, remodeling, appliances, whatever else. But who cares about the income statement, because if the total losses over 30 years are a bit over a million, if on the balance sheet the asset goes up to five million because interest rates only go down and real estate only goes up (until it doesn't, LOL) over the same time frame you can cash out for four million net gain? Of course if the shack only goes up to a million because its not in a bubble area like Arizona or whatever, you've not quite broken even, or god forbid if it only goes up to 3/4 of a mil you've lost quite a large life changing sum of money.
It's kinda fascinating really. We had a client that had only ever lost money. Their idea was pretty good, they had what I'd call a working prototype and paying customers. Our CEO happened to know one of the investors, and chatted with him about the investment and the numbers we did on a whiteboard. Even if they grew their business with 10 times the number of customers, and each customer ramped up their usage 10 times it would take 10 - 12 years to make back the money that had already been spend. That was assuming no new investments and zero cost in those 10 to 12 years. The idea that this may not have been the best investment in history was more or less brushed, as the stock price would surely rise.
Even if the already-invested money can’t be recouped, marginal additional investment could theoretically be with favorable (LIFO) terms offered typically offered to later investment.
So sure, acknowledge a bad $300 million bet, but then throw your next $50 million at the same bet if it looks like the best place to put a marginal $50 million.
I don’t always think investors are doing this rationally - sunk cost fallacy / gamblers paradox / greater fool theory / FOMO all play a part, but also recognize that lots of these super large investments are led by a small team using lots of other peoples money so there are ways for the decision-makers to come out closer to breakeven if much of the pot is lost.
Also with potential IPO’s and sky high rate of valuation growth over the past decade, the “greater fool theory” isn’t necessarily an irrational motivation to invest.
It depends on the exit strategy. The technology will sometimes be scooped up by a big fish and take the key employees with it. When folk invest VC cash then they are sprinkling it amongst many projects that will have most typically fail. A Couple making it will give them the VC investment reward.
> Klarna made a major mistake in not letting the majority of employees know if they were safe from layoffs or not, for a whole night.
I worked for a company that didn't let people know if they where safe, for a week. A friend worked for a company that didn't let people know for 3 months. It's beyond stupid, people becomes nervous and starts looking elsewhere and it's always the best people who leave first.
That being said: Why does Klarna have 7500 people employed? I feel bad for the people who will be losing/have lost their job, but they also won't be the last in tech. Klarna have done what Google, Twitter and other have done, hired people they didn't need, so now productivity per employee is too low.
15 years ago I worked for a company that used Klara for payment, right when they started to expand beyond Sweden. The experience was interesting to say the least. They where completely naive about fraud. They didn't understand the markets they where trying to expand to. If everything else failed, payback the customers and let the retailers deal with any loses.
While I'm sure they improved, based last my experience with them in 2016, I don't see how they could be ready to enter the US market.
> I worked for a company that didn't let people know if they where safe, for a week. A friend worked for a company that didn't let people know for 3 months.
Finland has in some respects even more stringent employment laws than Sweden. If a company is laying off people, it needs to "negotiate" with employee representatives for a set amount of time. For small companies or small layoffs, the time is two weeks, but if there are at least 30 employees and the layoff affects at least 10 of them, the negotiation time is six weeks. Companies typically say at the outset which employee groups are affected but delay the decisions about individual employees to the end. I don't know if this is by law, but I suppose that saying sooner would be an opening for a union to claim that the negotiations were not done in good faith, and possibly sue the company.
Having been a potentially affected employee on two occasions and an employee representative on one of them, let me say that waiting six weeks for the decision is not fun for anyone.
I've worked for (non-tech) companies that didn't let employees know they were safe for months - and they did it almost every.single.year... and always just before Christmas, like they planned to hurt people as much as possible. Utterly despicable.
Thinking about it, I guess they hoped to make people jump ship before they were pushed, but it destroyed any semblance of a good relationship between employees and management/HR.
When referring to productivity, what do you mean in this case? For Google, their profit per employee is still very high (about $300k [0]). Of the top 10 biggest employers in that list, they are 3rd-highest-earning per capita.
For the last 7 years I noticed a strange trend in tech. The skill of management was not getting the people you needed, but instead turning down people you didn't.
Whenever ive been a manager for the last 7 years its the same. One day you get a ping for “can you onboard X”. It doesn't matter if you had work for one more person or not, thus projects are created for them to do something.
I worked at Klarna between 2011-2013 as a software engineer and later as a team manager. I was laid off in a very similar fashion at the same time a bunch of others also got the same surprising news.
When it happened to us there was no announcement from the CEO. Sebastian had actually just gone on parental leave and one of the co-founders, Niklas Adalberth had taken the reigns.
At the time, my suspicion was that it was because Niklas Adalberth was getting rid of people he didn’t like and that the main reason my firing in the way it was done.
I was invited to an external meeting room at 17:00 in the Stockholm office with my boss and my boss’s boss, where they proceeded to tell me “we think we need someone else in your position”.
My boss looked helpless and sat quietly the whole time. My boss’s boss did all the talking and seemed just like someone following orders.
Reading this now it’s sad to see how nothing has changed at Klarna and makes me think that even if Niklas did had something to do with my firing that it couldn’t have happened without Sebastian’s knowledge and approval.
My experience of Sebastian was that he was a talented product guy, but unfortunately seems to leave a lot to be desired as CEO.
Should be noted that employment in Sweden is as far from “at will” as you can get. There is basically no legal difference between a union worker at a paper mill and a software developer at a startup (once it reaches a certain size). The law basically says that the last one in must be first out, and sidestepping this order requires negotiating severance with unions (yes also for white collar tech workers). So if you need to reduce headcount by 10% it’s going to be cheap if you fire the 10% most recent hires. If you want yo choose the 10% to cull it’s going to be expensive. The compensations in the article don’t look very generous at all.
It seems like the article is saying that the fact that there isn't a union is actually a big help in the ability to do this kind of lay-off.
> Swedish companies must negotiate with unions before layoffs. However, this was not the case at Klarna, nor is it the case at most Swedish tech companies. Klarna does not have a collective bargaining agreement (called “kollektivavtal” in Swedish) in place. This means that Klarna as an employer is not forced to negotiate layoffs with a union. Instead, Klarna is entitled to negotiate directly with each affected employee, which they are doing.
Klarna is also pretty big (7500 employees according to the article) so I imagine it doesn't have to do with the company size.
I never heard this before. I thought unions were always involved, regardless of kollektivavtal or not. Would like to hear from a Swedish expert on this.
Yes, if unions exist at the company (which they did at Klarna), a company is required by law to negotiate with ALL employee organisations present at the company. This is one of the reasons large companies adopt kollektivavtal, it allows them to only have to negotiate with one union for employment changes.
> If the employer is not bound by any collective agreement at all, the employer is obliged to negotiate in accordance with § 11 with all relevant employee organizations in matters relating to dismissal due to a lack of work [...]
In Sweden the Unions actually makes it easier for both the workers and the company. This is a big surprise for most foreign leaders coming in unprepared for swedish culture :-)
I'm no expert but how I under stand it is the company can offer x months of pay if you leave by your self. This does not need to be negotiated with the union. If this makes enough people leave, there will be no negotiation. If however they want more to leave they have to negotiate with the Union that the workers are connected to, it does not matter if the company have a contract with them or not.
Also, they have to give six months notice to the unemployment agency if they plan to fire more than 100 people.
I was actually surprised to read that the Swedish CEO "took a dab at unions". Sure, relationships with unions can be complicated, but I've never heard an employer talk negatively about them here (maybe I'm just sheltered?). I am used to seeing union reps come to the office a few times a year for Q&As and feedback sessions, and taking about union membership was normal in internal channels. Never heard of anyone in leadership batting an eye (heck, they were likely also union members). Being hostile to unions seems like a normal thing for some other parts of the world, but seeing a Swedish employer talk like this about union membership here immediately leaves a bad taste in my mouth about the company. It's a red flag.
Unfortunately it can take a while for employees who have relocated to Sweden to consider joining a union. It took me about a year or two after moving here to realize it was a thing, and such a normal thing at that. I can imagine that Unionen et al would have gotten more than a few phone calls from Klarna employees asking for advice during/after this whole thing.
> I was actually surprised to read that the Swedish CEO "took a dab at unions"
My impression is that he wants to be like the cool kids on the other side of the Atlantic. Meanwhile the Engineering union and Bankers guild are suing Klarna for the way the layoffs are being done. Maybe they are pissed. Dunno.
>Being hostile to unions seems like a normal thing for some other parts of the world, but seeing a Swedish employer talk like this about union membership here immediately leaves a bad taste in my mouth about the company. It's a red flag.
is the reason for this:
>I was actually surprised to read that the Swedish CEO "took a dab at unions". Sure, relationships with unions can be complicated, but I've never heard an employer talk negatively about them here (maybe I'm just sheltered?).
Could you please clarify your point? I presented the first two sentences you quoted as an elaboration on why the Swedish CEO taking a dab at unions was surprising to me, so yes it is indeed a reason. I have a feeling that's not what you meant though?
My point is that that negative opinion is the reason why they don't speak their mind honestly.
No point speaking honestly in an environment where they can be punished for doing so, either socially, or legally, particularly when speaking provides them no benefits.
At least in Finland the tech unions are mostly toothless. They might help you with a lawyer if it is certain that employer screwed up. And any actions taken are very light, in lines of we recommend you not to work overtime... And maybe day or two of walking out... And then finally capitulate for minimal pay increase...
Swedish unions aren't perfect for sure, but so far I've only had positive experiences myself. I've luckily never had an actual conflict at work to bring my union in over though, so the extent of my experience has been calling them for general advice and getting an extra week of vacation as part of a collective agreement. I've also heard a few stories of coworkers bringing in union reps when they felt they were being pushed out on unfair terms and negotiating much better severance packages.
From my experience, it's not very common in tech companies in Sweden. They often lack collective agreements and in the last company I worked at I never heard anyone talk about it or say they were a member.
The only companies I've worked for in Sweden have been tech companies, and union membership was very common. At EA we had a collective agreement, along with some other larger games companies here iirc. Many people are members but don't mention it unless it gets specifically brought up since it's such a non-event.
Edit: Was curious to find some numbers about this. I don't read Swedish fluently yet so having to use Google Translate, but one report I found from 2020 says that "Information and communication" (which I suspect IT/software engineering might fall into) has 69% membership [0]. It seems to say white collar workers actually have a higher membership rate than others at >70% overall; will look some more and add any other numbers I can find.
The gaming industry is notorious for not having collective agreements (as per the article, only 1% of the companies has it). So I'm not sure your experience is representative.
Having a collective agreement is not a prerequisite for being a union member. It is common to be part of a union even if the company does not have a collective agreement (such as the games company I worked for after EA; no collective agreement, but still plenty of union members).
Re item “The pay cut of 2020 which became permanent”: the Day Job I had in 2008 used that year’s onset of the Great Recession to stop annual raises and *never* brought them back — at least, not while I was still there, which was until early 2015.
No other opportunities to speak of; inertia; I was in my mid-50s at the time (59 by the time the final cut came for me) and didn't think a massive recession was a good time to look. Take your pick. :-)
[Plus, I really liked the company. Had been there longer than in any other job, and it was where I wanted to be when retirement came. Wasn't to be, however.]
Buy now pay later schemes are usually really terrible ideas. Companies like Klarna and Afterpay should be avoided at all costs. Often the loan repayment schedules are intentionally confusing and predatory.
The Venn diagram of C-levels who are willing to work at a company with an inherently predatory business model, and those who will lay people off and screw them over is basically a circle.
It is impossible for someone who leads a company like that to be a good person. Why would anyone be surprised at them being heartless to their employees?
> The CEO said employees at Klarna are superstars, and superstars don’t want unions negotiating for them.
Actual superstars are happy to take advantage of what the Screen Actor's Guild does for them, just as the crew working on their shows are also happy to have their union, the writers are happy to have their union, and so on.
> Garden leave is when an employer requests that an employee, upon submitting their notice, need not return to the office. This is a type of absence where an employee is asked not to work during their notice period, in anticipation of their departure, while still being kept on the payroll.
Since this is presented as a voluntary separation agreement for the Swedish staff -- does anyone have information about what happened to those who went, "thanks but no thanks"? I assume they have to be let go in LIFO order, which ought to give them more time to get their affairs in order.
Adjacent to the topic of this article but I really love Gergely's reporting. It's great that he is shining a light at how poorly these companies are handling layoffs. Hopeful that this will change our industry for the better.
I mean the warning signs of the overvaluation and hype around Klarna was there ever since a private early investor unloaded their shares on to retail via an online investment [0] [1] platform at $45B, last year December. [2]
Those 6,000+ retail investors who FOMOed and bought in are now down more than 80% of their investment due to the down-rounds, with the private early investor escaping and banking $8 million. So it is no surprise that the layoffs had to happen especially with the recent rate hikes which are accelerating the costs at Klarna.
Seems like a poorly executed layoff. I’ve seen a few of those in my previous job. Things like an SVP of Product congratulating the machine learning team for an awesome alpha demo and asking when we would be ready to ship this to customers. The answer he got was that it would never get to customers because he laid off the whole team the day before.
I heard some horror stories from some managers that have since left.
They were not told that there would be any layoffs, and when their employees came and asked them what it was all about there was no support from the top so they had to just tell everyone "I don't know". What an awful position to put people in.
The article is a very good write up of what happened. I'm going to talk about what the current internal situation is and how people are feeling based on what I'm seeing.
Since the layoffs there has been a noticeable shift in atmosphere. Previously quite a few people would regularly come to the offices, now not so much. Some still do come but significantly less. Performance has gone from people often going beyond what was expected to "I'll do enough to keep my job". A colleague who was previously very keen working for Klarna and would often work a good 11 hours+ is now "disenchanted" and doesn't quite know what to do with themself.
Job satisfaction and overall happiness has rapidly declined and is still going down. Some departments do internal anonymous surveys where people outright get asked if they are happy at work. From the ones I saw, every single one had a drop of at least 20%, some significantly more. Participation rate of those surveys has also declined. Most people I spoke to outright said they're not participating anymore because they're on the way out.
A good 50% of the people I asked, outright said they are looking for a new job. I expect some are not sharing because they want to keep it a secret. I'm expecting my team to loose about 40% of its members within the next 5 months. As far as I know, there is only replacement hiring, no active hiring.
One of my very talented colleagues that I have been working with for 3 years got laid off. During a chat with our direct supervisor I asked them if they could tell me the reason. Trying to reassure me, they said I had nothing to worry about and that my colleague wasn't fired for poor performance but other internal reason. I knew this colleagues salary so I also know they weren't let go because of their high salary. Since then my team has an open position that is hiring for this exact role. Make of that what you will.
As you might have read from the article, communication was absolutely horrendous. One of the key things I'd like to mention is that Klarna always promoted open and frequent communication. Only this was never practiced by the C-Level. This was incredible apparent during the layoffs. Many people had questions but C-Level was dead silent and let HR people "manage" the fallout. My colleague had their meeting at the start of the working day on Tuesday (layoffs were announced the day before). My supervisor got told of the layoff 15 minutes before my colleagues meeting. Informing my supervisor was done through a 3 sentence slack message.
2 weeks after the announcement, quite a few pregnant women came forward that they also received an offer. Additionally, a lot of people on long term sick leave were contacted. Since the layoff decisions weren't made centrally, I doubt these groups we're specifically targeted but Klarna is, in comparison to the average Swedish company, quite international. I know of at least one case from a decision maker (not C-Level) that a woman was laid off because she was 8-months pregnant and due to go on her maternity leave. I'm not going to speculate on what, if any, legal actions are following from this.
One of my ex-colleagues simply quit one day - no emails, no notice...nothing.
Another one of my ex-colleagues told me he was doing two jobs, but only working 8 hours in total per day, if that.
Then COVID layoffs happened. In the first case, the company simply turned off the logins - it was their way of laying people off (one laid off guy had been with the company for 15 years, another one had health issues and needed the insurance). In the second guy's case, they told him one Friday afternoon that it was his last day. We were in different teams at the time, but neither of us had any work, despite asking our respective managers for work daily. He got frustrated with having no work and took another job. Also, it took them three more months to give us the last two paychecks (for two months).
Both times, I thought my colleagues were nuts and were unethical - doing second job, not giving notice etc just felt ugly. Now I feel different. If employers treat employees like crap, why should any employee show any loyalty? When my colleague was laid off, he didn't care, as he was already had another job. I on the other hand, spent the next month looking for one.
In every contract job I worked, the first thing they say is "you can (and should) work more than 40 hours if we need you to, but you can only bill us for 40 hours".
If this is the treatment in a sophisticated, (relatively) high paid industry like software, I wonder how people are treated in service industries, retail etc. No wonder so many workers are striking and trying to unionize... Maybe it is time for software developers to unionize too
> the company simply turned off the logins - it was their way of laying people off
In a lot of countries this is illegal, you need to prove a cause for firing anyone. One of the reasons klarnas firings in Sweden have been controversial and complicated is that they specifically tried to sidestep that by "firing people" by getting them to resign and accept a deal. They would not be able to just outright fire people without negotiating the terms, and those terms are usually based on a LIFO queue.
> One of my ex-colleagues simply quit one day - no emails, no notice...nothing.
Some people don't want to leave with fanfare, but notice is basically required in sweden (again, using sweden as a comparison since the thread is about klarna).
> Another one of my ex-colleagues told me he was doing two jobs, but only working 8 hours in total per day, if that.
If they were dishonest about that then that does not look great IMO. If they weren't and both companies were fine with it then it seems OK.
If they were dishonest about that then that does not look great IMO. If they weren't and both companies were fine with it then it seems OK.
He was billing the companies 8 hours a day, each. Is this unethical? Sure. But he had no work for weeks and weeks, despite asking his manager daily about it. He was on FaceBook first, then Netflix, finally got himself a second job. Until they laid him off, with 2 hours notice on a Friday afternoon.
This is what happens when employers treat their employees like crap. I have zero sympathy for most employers these days.
In Europe (I work in the UK) it's usual to require that both sides commit to the employment on a rolling basis. My contracts have for over a decade now required roughly 90 days, but it's common to see 30 days in most jobs.
That means if I want to leave I need to give 90 days notice and if they don't want me any more I get 90 days notice of that or I get 90 days pay immediately.
As I understand it Garden Leave is not uncommon in the US... for executive level jobs. The guy cleaning the hallways is lucky if they remember to tell him not to come in tomorrow rather than just locking the doors and not paying him any more.
I admit that I was barely aware of this apparently largish company? I'd heard the name Klarna before, but knew nothing of it.
And yet, I found myself reading this in a riveted fashion. Why is that? Is it just the macabre nature of humans to slow down when passing accidents? My anxiety about how the little guys world can suddenly be turned upside down? I'm honestly intrigued why I couldn't quit reading this.
> Klarna’s “Super App” was an area getting lots of investment in 2021. This investment was a step away from the core offering of the handling of payments. The vision of this app was to create an experience where people could do all their shopping within a Klarna super-app.
However, this super app never launched as planned. Internally, confusion arose when it emerged the super app would use scraped data from customers who were already partners of Klarna. The super app efforts are still progressing slower than originally planned, and some employees think the company is spending too much on this area for too little return.
Trying to come up with something out of nothing it seems
I might be just an ignorant user in Europe, but this super-app thing could scare me out of Klarna and let me find an alternative, I got uncomfortable with the app when they required unnecessary data for a payment.
A technique I learned from possibly the worst project/product manager ever was to have loads of meetings. And over schedule them. And show up late. It makes everything so slow, and you have to have more people so that somehow, in between meetings a line of code could be written.
Lots of experimental things that had nothing to do with its core business such as Blockchain currency. Klarna massively expanded in the last 3 years. In 2019 there were about 3200.
The problem with a secret sauce is the market needs more than sauce.
So even if they could proactively leverage their synergies using mobile apps or whatever their secret sauce was, activities like, I donno, collections maybe, still scales up linear with size like legacy companies.
My understanding was that, at least in Scandinavia, their debt collection was a separate company. I may have gotten that wrong, but we had a few customers who paid us using Klarna. When Klarna didn't get their money after some period of time they'd normally let some 3rd. party handle debt collection. In some cases they just reverse the charges and leave us to eat the lose arguing that: The customer claim to have never received the item, or straight up let us know that they weren't about to lose money on this transaction, reverse the charge on us, the retailer, and leave debt collection to us.
This is the death spiral all large organisations go into, they hire more people so that they can do more things, but then they spend increasing amounts of time in meetings or trying to work out how some other team’s system works, so productivity goes down, so more people are hired to counteract that.
I feel for the people who were layed off, esp. ones who just left their previous jobs and/or relocated. One thing as an employer I would never do (if it were my call) was to lay off somebody who just recently joined/relocated [unless there are already performance problems]. That's just a shitty thing to do, at a human level.
Putting that aside (since all tech companies will lay off new joiners), I don't think this story points to any (cultural) problems at Klarna.
Layoffs are always tough and people will be unhappy. Based on the timelines presented in the article, everybody knew within 1-2 days whether they are affected or not, and affected people got a good severance package. By "good" I mean more than Klarna had to pay based on the law, based on the article.
It's important to remember that 99% of working people in the world would not get this deal in a layoff.
I think we (tech workers) need to stop expecting to always be treated as unicorn snowflakes (esp. in the current market conditions).
I’ve been through several tech layoffs. I can’t think of any case where new joiners were targeted. It was always some combination of performance and cost (either personal pay or an entire group being less profitable).
I don’t understand why companies do these scale up things. Hoard your cash and wait it out a stint before making major moves. Don’t hire fast hire smart.
If you are in a money problem environment maybe start with transparency and freezing of things like hiring? There just seems to be 100 better ways to approach this
It is unfortunate that people lost their jobs, but is anyone else not upset that a "buy now, pay later" company is struggling? They are exacerbating consumer's reliance on credit and causing some reckless spending, I personally believe they do more harm than good.
I have heard this line a few times for HR recently and it makes me cringe every time. Putting everyone in the same shitty boat is never fair. Takes me back to George Orwell’s Animal Farm every time!
Well, that's some seriously incompetent management. Thing is, when these reports get out and later I'm assessing tech to potentially use I go back in my head "Oh yeah Klarna - incompetence. Moving on."
I have never understood why health ensurance is handled by the employer in the US, why don't people buy private health insurance instead? It feels insane to put yourself in that kind of dependency on your employer.
Around the Great Depression, in an effort to get control of inflation, the 1942 Stabilization Act was passed. Because employers could no longer attract new employees by offering higher pay, they started offering other things like health insurance. Since it was payed directly by the employer it wasn't taxable income and didn't fall under control of the Stabilization Act, and since then it just stuck.
Note: 1942 is the middle of ww2, not the great depression. The war effort dramatically reduced labor availability. (back of the napkin math says roughly 12% of the US population served in the military, disregarding the massive labor pool required to support the military industrial complex)
If EMPLOYER pays you 10k and you want to buy a plan for 5k, you first have to pay taxes on the 10k, lets say 20%, so you have 8k - 5k = 3k left over.
OR
The employer can just buy the 5k plan for you tax free, and pay you 5k instead. This means you have 4k left over after tax! This is because healthcare plans are not taxed if provided by the employer.
Employers also often get better pricing on insurance for their employees because the pool is less risky overall. Those buying health insurance on the private market are more likely to have health problems and need it. Lots of healthy, young employees with limited health problems at tech companies.
When McCain ran for President against Obama in 2008, there was talk about making employer provided health insurance taxable as a way to even this playing field. The idea was more employees would refuse employer coverage and buy their own for cheaper.
Private health insurance can be extremely expensive, especially if you have a chronic illness, or are over age 40. I buy my own as a freelancer; the monthly premiums for even a basic plan are extortionate. There are government subsidies for lower income people, but many tech freelancers earn too much to qualify.
It started that way because it got around WWII-era wage caps and it remains advantageous because it gets paid for with pre-tax dollars. (Which isn't, I know, carved in stone. But that's the way it is atm.)
Employers cover a majority of the cost of insurance. In Boston, I pay maybe $70 every 2 weeks for health insurance, but on the private market I'd be paying 5-10x as much for worse coverage.
A law called ERISA makes this unlikely. Companies must offer benefits like health insurance and retirement savings plans on the same terms to similarly situated employees.
I've never heard of that, it would cost you more than it would cost the employer since you first have to pay taxes on your income, and employers can often get better rates.
Private insurance can be thousands of dollars a month, so before Obamacare it was a pretty niche thing. It still kind of is, because for professional jobs the expectation is a massively subsidized health plan. Voluntarily paying an extra $1500/month for the independence of not relying on your employer is not a choice most people would make.
It is indeed a stupid system. Private insurance is very expensive compared to the premium you usually pay when you're covered by your employer's plan. Employers can negotiate better prices because they bring a pool of insured to the insurance carrier. An individual doesn't have the same leverage.
The same author has been reporting diligently on Pollen, and has said he will do a write-up on the collapse there. I will be very interested to read that.
Klarna is another one of these businesses like affirm which should not exist. Propped up using VC money, it will all come crumbling down. What a disaster. Shopify also got caught up in this mess by investing in all this. A lot of Shopify's revenue came when Klarna went public instead of product and merchant revenue. Everything burning down.
Why do startups(tech companies) need so many employees? My first thought is that because of the rapid growth startups are plugging inefficient holes with more brains.
These articles are a good reminder that everyone is expendable at a company. Plan accordingly and remember that income is way more important than net worth.
Almost reads like a detective story as if not only mass layoffs, but poorly managed ones are unique to Klarna.
Feels like the author has not really understood how incredibly common mass layffs as a tool for keeping profit margins really are.
Layoffs sucks no doubt but I cant say I feel as "outraged" as the author seems to intend.
My current employer cut 10% of the workforce about 3 years ago (1800 ppl).My preevious one did that twice (about 3500 people in total). Another former employer would cut 2-3% every other month or so. Then go on a hiring spree, and then cut again.
Laying off 5% every year Microsoft style because of a crazy in house performance review system, now thats a news worthy evil story.
This is just standard bad management vs profit margin not really interesting.
Yea Sweden, it happened to you too. Welcome to the club.
This is the big thing that drives me nuts.
I don't know if it's a fragility of ego thing or what the cause may be, but it results in a corporate inability to critically self-evaluate at the highest levels. If you can't say where your weak areas are, you're not improving.
One of the experiences that untreated ADHD blessed me with was routinely failing classes. That repeated exposure to undeniable failure (and the consequences of it) really helped me accept that failure is the default. If you're not constantly fighting against failure, you're failing. You can't pretend that something didn't work out, or stop thinking about it because it hurts.
The self congratulatory back-patting (even if it's just "everything is fine, we're doing great") is treating success like an achievement. Success requires vigilance. Excellence is not an achievement, it's an activity.
We need more leaders that talk about the things we could be doing better, and doing so inspirationally, not derogatorily. It's ok that you're not the best at something. Very few are. That doesn't mean you can't or shouldn't do better.
Try internalizing that if you're not constantly struggling to do better, you're not living up to your potential.