Jokes aside, how do you end up having more than 500 excess people than what you need? What is management exactly doing during the time they went from 1 excess person to 500? Did they just hope the "macroeconomic headwinds" would become tailwinds? Didn't they at some point see that they have more people than valuable work, and maybe we should deal with that problem instead of hiring another team to place even more bets?
Actually, I know why. It's because they have too much money and when you have too much cash, you start splurging without thinking and then one day the chickens come home to roost.
Honestly, I would not hire a single manager from these big companies because they operate in an environment where they're playing with monopoly money and don't know what reality is. There's something to be said about spending within your limits and not splurging on the next shiny object. Way back when it was called cost control and operating within a budget. All that management theory seems to have been lost in the age of cash injections and valuations based on everything except retained earnings.
> Actually, I know why. It's because they have too much money and when you have too much cash, you start splurging without thinking and then one day the chickens come home to roost.
This is an incredibly uncharitable and shallow take, on the level of that comment many years ago that said something along the lines of "what's so interesting about Dropbox? It's just rsync, I could build it in a weekend".
We don't operate in a perfectly legible world, especially more so when it comes to people. It's all bets and risks and whatnot.
If you or anyone has the power to create perfectly aligned and efficient organization, I'm waiting here to see you build large multi-trillion dollar companies. Let me know how it goes.
My understanding is DropBox was trying to transition from sync and share to being a multi-product document-centric company (look at acquisitions like HelloSign).
One possibility is they staffed up a bunch of projects on bets that ultimately didn’t turn into viable products, and are now pulling the plug.
More like the cloud sync functions out of the box on Google, Microsoft and Apple products caught up in features and already got good enough for the customer base of these to not bother paying extra for Dropbox no matter how much better they would have been. See Evernote.
It's difficult to go against Apple, Google and Microsoft when they're vertically integrated and can squeeze you on all sides offering an OS, email, browser, cloud sync, document editing, etc with seamless integration between them, while you're just a cloud sync service on their OS. You don't have any moat, while they do. There's no way you can compete with them from that position unless the government were to break up their vertical integration for anti-competitive practices.
I think that is why Dropbox has been trying to diversify their offerings. They know as well as the rest of us do that cloud storage that's only cloud storage and not much else will have serious trouble competing with cloud storage that you also need to have to work conveniently with Google Docs, or Office 365, or whatever.
But, as parent poster pointed out, taking on that new work requires hiring people to do it. But that's expensive, and those new products need to start generating revenue quickly in order to cover the increased payroll costs.
>For me, Dropbox's moat and USP is that they make all of their money from file storage, giving me some confidence that they'll ensure it keeps working.
To me that's now become a red flag with these companies. Not speaking of Dropbox in particular but all these start-ups from the past that offered a free new innovative product/service for Android/iOS went to shit soon after Appel and Google copied and integrate similar functionality into the OS out of the box, leading to investor money drying up and the company suddenly paywalling and gouging existing users to make money to survive. Look at Evernote, LastPasss, Cerberus, etc. but also Amazon, Netflix, etc, enshitification galore.
Google and Apple are less likely to do that since they already make more money than God and tend not to want to fuck up their reputation just to squeeze a few more bucks from their users.
That's why I don't trust these small app companies anymore, since they'll get squeezed out by Apple, Microsoft and Google, and enshitification will ensure. The app is good in the beginning for a few years when VC money is abundant and their goal is user growth at any cost, but after that suddenly once you're locked in, you get paywalled, as the company tries to squeeze more money from you so VCs can get their money back. Rinse and repeat. So no thanks, I got burned a few times already.
The problem is that it’s unclear consumers actually ever wanted Dropbox to become any more than a sync and share company, or to deal with the resultant complexity that that will bring to what has been a beautifully simple product. But they had to do that to justify Sky-high valuations.
I think what people forget about layoffs is that all those "excess" employees who have been there didn't sit around doing nothing during the time they were there.
Those 20% of Dropbox staff wrote a bunch of code, made a bunch of sales, and did a lot of other tasks that will have an impact even after they don't work there anymore.
Even though they are being laid off, their contributions still have a positive impact on the company. Even the government treats it this way from a taxation basis: software that is written by engineers is treated as a depreciating asset that is amortized over 5 years.
In other words, if I write some code that consumes $100 worth of my labor, that engineering work is considered by the IRS to be an asset to the company with book value from now until 5 years from now. If I'm laid off, the company still has that $100 asset on their books, which depreciates over 5 years.
It's perfectly normal for a business to plan out their future based on uncertainty and risks. If they only hired people they knew 100% they would need forever, they'd miss out on a lot of opportunities.
Extending this logic far out enough and we could say ridiculous things like "How could IBM be so irresponsible to hire hundreds of thousands of engineers to make business mainframes when their marketshare will dwindle to a sliver in 40 years?"
The truth is that businesses need the employees that they need at a point in time, and that number is constantly changing.
> The truth is that businesses need the employees that they need at a point in time, and that number is constantly changing.
Another truth is that we've collectivly decided that all people must be working in order to "earn" their right to exist. So anytime there is a large layoff like this, there are a lot of new stories about people relocating, making major changes to their lives, some for the better, some for the worse, and some for the absolutely devastaing.
One must not forget that these 'human resources' are more than just a number.
I'm all for better protections for workers, and I think that the US should make companies give employees more notice, or alternatively make unemployment benefits a program that is more automatic, a full 100% of salary instead of being capped, and biased more toward the employee. I.e., I think a company should have to prove to a judge that an employee was fired with cause or quit voluntarily before the employee loses their benefits.
I totally agree with the idea that the benefits of at-will no-notice termination employment are lopsided in favor of the company, but the flip side of that arrangement is that it's very easy to get a new job in the US compared to many other places. It's easy to be hired on a short conversation and a handshake in an at-will environment.
Depends. If those employees truly are excess and they haven't been doing much for the past couple years, they might be just producing tech debt. Cancelled projects and migrations have negative value. I doubt this entire 20% was made redundant overnight, which means they haven't been valuable for some time.
> This is an incredibly uncharitable and shallow take,
So is yours.
> We don't operate in a perfectly legible world, especially more so when it comes to people. It's all bets and risks and whatnot.
What bet was dropbox taking by overexpanding their workforce by 20%?
> If you or anyone has the power to create perfectly aligned and efficient organization, I'm waiting here to see you build large multi-trillion dollar companies. Let me know how it goes.
This is an interesting statement. Dropbox is a single digit $billions company, not trillions.
> What bet was dropbox taking by overexpanding their workforce by 20%?
When asking this question, I think it's good to remind ourselves how much we don't know. We don't know if they overstaffed in a push to expand their business that didn't work out, we don't know if the had an older operating model that went from "efficient" to "inefficient" as scale and market dynamics changed. We don't know if advances in productivity to tools, or changes to major client accounts, impacted their staffing needs. Determining whether one is "overstaffed" is a multi-factorial determination that can be false one month and true the next.
Set aside whether it's uncharitable to just assume management oversight or idiocy - it's hubristic. Having said that, it doesn't mean the assumption is wrong, it could be exactly right! But it might not be.
The OP made strong statements with weak backing. Their statements were also placing blame. Your profile says you're an SRE--can you imagine a post mortem with that kind of attitude?
> Honestly, I would not hire a single manager from these big companies because they operate in an environment where they're playing with monopoly money and don't know what reality is.
In part, to unpack why part of this glib take is missing the complexity, "don't know what reality is", is that finding reality is slow and costly.
Perhaps your team provides a platform which is used internally by several other teams building various products. It supports a bunch of use cases, but it's hard to evaluate the actual ROI of the platform you provide, both because no one knows how much better/worse those products would have been without your platform. Would they have taken months longer to implement? Would they have not been possible without spinning up a team like yours?
Further, some of those products actually are used by paying customers, and others are still in development. Of the products used by paying customers, it's unclear which they would actually pay to use vs which they use because it's available in their subscription basket (e.g. is Dropbox Paper making money or is it just that some Dropbox customers use it but would pay the same sync subscription if Paper was killed?). Of the products that are not yet in customers hands, how should you value them? If your small team supports multiple in-development products, that must be worth something even if they're not revenue-producing yet.
Similarly, suppose you're a manager who runs a team building a product which has dependencies on multiple platform/infra teams -- do you really have visibility into the real costs that your team's requests create? Can you really know the ROI of your team, to guide choices about various investments?
This kind of ambiguity means that even when leadership wants to see which teams are really contributing value and how much, it's quite difficult to see. Teams may optimistically estimate their own value because they cannot see all of the costs to which they contribute, or because they cannot see which revenue-affiliated use is actually valuable.
Open the "More" menu in your Dropbox interface and I think you may be surprised at how many different products they have.
I am sure they're not trying to be a Microsoft of Google, but they're trying to make a niche in document handling, file sending, password management, a lot of those little things that are something of a pain for many businesses.
I think if you compare what Dropbox is offering at $15/user/month to Microsoft 365, there are a bunch of things that Microsoft isn't really covering or isn't covering as well (and vice versa, to be fair). For example, the ability to take e-signatures, document watermarking, facilitating out-of-organization file transfers, etc.
I also think they compete quite well with Amazon Drive, considering that Amazon Drive was discontinued.
My point is that this is probably the case for most users; the "more" doesn't mean anything because it's some functionality created by underemployed product managers rather than things that customers actually need/want to pay for. If you have to point out "hey, look here under this 'more' menu", then it's not part of the primary value proposition for the product and not why someone would pick that product. Sure, it might be that it is useful for some subset of users, but that you need to wave people down to show them that value means that it's probably not that valuable.
The amount of businesses whose target audience is “most users” is very small. You might get lucky and be a Microsoft or Apple but almost every other business has a very specific type of customer that they want.
The other thing is that the most popular features aren’t necessarily the most profitable ones.
Dropbox doesn’t make money on the millions of people with free accounts, and they are selling commodity storage for their paid users at thin margins. But a product that can solve business pain in a unique way can command better margins, which is why they are getting into other businesses like document signing rather than just sticking to selling bulk cloud storage.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
This question always gets posted to HN, and is always the top comment whenever an article talks about how many people Company XYZ has. It seems like a lot of people just have never worked for a company that's growing (in terms of both profit and the amount of _stuff_ they are trying to do). Companies' need for people grows quadratically in proportion to the amount they are trying to do, not linearly. If it takes a staff of 20 to deal with 2 "units of work", it's going to take many more than 40 to deal with 4 units, more like 80. For 10 units of work, we're talking a staff of 500. You need all of these people to manage all of the growing internal network of complexity and yes bureaucracy that forms whenever you need to get people to work together. For every N people you hire, you'll need a manager to manage them, and for every N of those managers, you'll need a second level manager, and so on. You also start needing to actually deal with legal and regulatory compliance (rather than the yolo approach most startups take), you need to deal with HR and payroll for all these new people, you need to deal with power-of-2-scaling training and internal documentation needs. And all of those people you hire to do these things need their own managers and on and on and on.
I've never seen a company successfully scale what they are trying to do without needing a ton of people. Maybe every company I've ever worked at is just inefficient but I don't believe it.
> This question always gets posted to HN, and is always the top comment whenever an article talks about how many people Company XYZ has.
Perhaps because there hasn't been a good answer yet.
> For every N people you hire, you'll need a manager to manage them, and for every N of those managers, you'll need a second level manager, and so on.
But clearly that's not absolutely necessary, because already we know that two uncoordinated companies can make 4 units with 20 staff each. If the second level manager isn't providing enough value in terms of eliminating duplicated work then they shouldn't be hired.
Of course diminishing returns are going to set in, and bureaucratic inefficiency is a law of nature, but I see your answer as more shallow a dismissal than the question deserves.
And not to mention acquisitions come with their engineers, sales staff, support and management crew.
The leadership should have been rebalancing yearly and quarterly in small chunks so they’re not in a position like this. It’s also a strategic play, while they come out with their major AI move next. That’s my guess. Gotta satisfy that board somehow
Dropbox is public and has actual profits. I think your comment is not accurate.
Instead I think the company has plateaued in growth and thus they need to cut back spending otherwise they will have falling profits and no growth - which is worse than just no growth.
If you don’t have growth you have to treat this as a PE firm would. You cut spending to a minimum while ensuring you keep your customers, thus maximizing profit to assets ratio. A lot of companies do not have growth but are great money machines. It may be that this is the mature stage for Dropbox.
A P/E on its own is not good or bad. If the company’s earnings are in decline you would expect a low P/E, and if they were growing aggressively then you would expect a high P/E. It is only when there is a mismatch when the ratio becomes interesting. I am not saying it isn’t interesting in this case but the comment you are replying to does not tell any information that would lead to the conclusion it is “quite good.”
Yeah if there is no growth but a lot of earnings the stock should probably start to pay dividends no? Otherwise what is it doing with all that cash it is generating?
> Didn't they at some point see that they have more people than valuable work
Product roadmap probably had some ambitious ideas that got scrapped when earlier steps proved to not be marginal revenue generators.
Jobs said it best: Dropbox is a feature not a product. All their efforts to make it a product (let alone a platform!) have worked against usability and alienated a lot of users. I am hopeful these layoffs signify a return to sanity in a company that seems to be leading the charge in racking up unforced errors.
They were (I think) first to market with fast, cheap cloud storage but at this point there's just too much competition and not enough differentiation. I have only the vaguest awareness of them trying to build some value adds to make Dropbox more of a collaboration tool, but I've never seen it get any adoption. I'm guessing those are the LOBs getting cut with this announcement.
I switched to OneDrive when it started getting bundled in free with Office 365. I also tried iCloud when it came in the Apple One subscription. Both are total shit compared to Dropbox. The sharing in iCloud is nothing short of laughable and OneDrive is just buggy Microsoft garbage (on my Mac - might be better on Windows). I am planning to move back to Dropbox which says something - I’d rather pay than use competitors’ products that come to me for “free”.
That said, I’d rather the company stick to its fundamentals with no further feature creep and focus on lower subscription cost rather than features to justify higher costs.
In my experience a lot of hiring in those big or publicly traded companies is to "build the structure to get promoted".
When you're big, investors and banks and auditors don't like flat structures with a lot of individual contributors. A vertical structure is a must to go public. The rest is people playing the game they're forced into.
> When you're big, investors and banks and auditors don't like flat structures with a lot of individual contributors. A vertical structure is a must to go public. The rest is people playing the game they're forced into.
Might be the first time I've heard this hot take out. What makes you think banks care what the org structure is for a public company? Banks don't care for size as long as the company is fiscally prudent and can prove it. They do check silly metrics sometimes like revenue per employee, but they really don't give a damn how your company is structured. By that metric, 2012 frat club Facebook wouldn't have been touched - yet they had like 10 investment banks frontrunning their book. In fact, I'd say 2012 Facebook IPO was the trigger for a lot of banks not caring about such silly things.
As a counterpoint to your argument, there are 200-500 employee biotechs not generating meaningful revenue that are trading publicly (and which went public without a SPAC play). The decision on who gets to go public falls on the exchange, not on the banks - they simply sell your stock to their investor list, and a flat structure with fewer than needed employees is actually a great selling point for a bank.
>In my experience a lot of hiring in those big or publicly traded companies is to "build the structure to get promoted".
This comment should be at the top. Not just at the top of the thread, but at the top of HN homepage.
It's how during the pandemic many companies just suddenly doubled their headcount without any extra output in products or quality, and now we're seeing somewhat of a correction to that with all the layoffs.
It's how you see people in tech hubs climb to the top of some large companies despite never having worked longer than a year at any company. Nothing against job hopping but I ask myself what skills and value people like that actually bring, who have 10x 1-year of experience, as they're never in a place long enough get to see the end results of their work and decisions, if they're good or bad, they barely pass the onboarding stage.
It's also how many of these large orgs end up failing long term. Look at Intel now, or german auto makers, as the goal of each worker there becomes gaming the system to getting yourself a promotion at the cost of the org as a whole, instead of adding value to get a promotion, since the org is very bad at setting the right goals and incentives for the workers. Google and the like who have a monopoly with an impossible moat or an infinite money cheat can resist this enshitification much much longer than the rest of the companies.
I'm not even mad, in the end most people are just playing the game, they don't get to write the rules of the game, and the ones who do are out of touch with reality so they can't be mad when people try to game it for their personal advantage.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
There never is an excess amount of workers (sure, there probably are 4-5 exceptions). What happens is that they need those employees, but instead are going to demand that the employees that are left pick up the slack. Which they will because they need a roof over their head.
Those companies are merely cutting costs, they don't actually have any excess employee.
It's not black and white like this. There is such a thing as having to many employees and such a thing as having too little. I think realistically, most of the time, it's a mix.
People are hired to deliver what's on product and/or engineering roadmaps. If the roadmaps are less ambitious, it becomes pretty easy to justify headcount reductions.
It's also less labor intensive to focus on a few core areas, making smaller incremental improvements than doing that PLUS launching big ambitious greenfield projects.
Also, remember how people used to say "Startup X is a bad idea because <established tech company> could just clone you in 6 months"? Well, those ideas are now back on the menu for entrepreneurs because bigger tech firms are now running too lean for quixotic defensive plays like that.
It has been even more than 500 excess employees. 300 were laid off in January 2021, and another 500 in April 2023. The percentages imply that headcount bounced around from 2800 down to 2500, up to 3100, down to 2500, up to 2600, and now down to 2100.
These same macroeconomic headwinds have existed for some time now, and the fundamentals of Dropbox’s core business commoditization haven’t changed for the better.
The problem is we live in a society now where everyone has a public platform to promote themselves (linkedin etc) and there are a lot of ruthlessly ambitious narcisists who put self promotion and resume building ahead of everything else.
So they muscle into a team lead or manager position and grow the team, because it looks good to post on linked in "hey I'm growing my team" and it doesn't matter if the team needs another person.
And who cares if the company is then stuck with surplus employees, not the person who hired them because they have moved on and up at another company.
I have a offtopic but related question. Why are our taxes still calculated in stepwise bracket manner. Why not a smooth curve? We have the mathematical and technical knowhow to implement it. Coming back to the Dropbox layoffs, why was this decision a drastic stepwise reduction. Not a smooth curve over a period of say 1 year.
>understanding the output of knowledge workers is a famously difficult task
That's why large companies don't look at individual worker output (performance reviews are mostly performative and subjective) and just look at stock prices and profits.
If "line goes up", it means workers as a whole must be doing a good job , even if individually many might not be good at their jobs, but as long as line goes up, nobody cares to look too deep into the hows and whys.
If line stops going up, then they start laying them off more or less randomly or forcing RTO, or such things regardless of individual performance.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
If you bet on growth/new features but your current and future customer base are going out of business or downsizing and you have to switch to more of a survival strategy.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
It's actually a pretty simple risk/reward equation.
The risk of understaffing a company is greater than the risk of overstaffing a company.
If you overstaff a company, the solution is quick and easy. If you understaff a company, the solution is extremely painful and takes a very long time to fix.
E.g. it takes 1 day to fire someone, but 9 months to hire/onboard someone. So to ensure the staffing isn't a bottleneck for growth, the obvious answer is to err on the side of overstaffing.
TLDR: You need to hire and onboard people before you actually need them. If hiring and onboarding someone takes 9 months, you need to guess how many resources you'll need a year from now, and hope that your estimation is accurate. (And obviously a lot of companies over-estimated how many people they would need, hence lay offs)
If you're running a SaaS that isn't customer-interaction heavy, you can usually get away with dropping about 80% of your technical staff (if, of course, you pick the correct 20%, which is not easy).
Having worked in several startups through the early growth stage, it's just surprising how much you don't get more done with, say, a 500 employee company than a 50 employee company.
There is a ton of room to grow less and maintain more, and it's a real struggle for a business to decide its product is done with major growth and the associated need for a large staff.
Staffing your business (or even team) with the right number of people to accomplish a job is a real challenge that the majority of managers don't engage with, instead simply trying to grow their little kingdom to the largest size they can, both for intrinsic power reasons, and also to foster greater jobs for themselves later on.
If I see a manager put "led a team of 40" on their resume, in the interview, I ask "did you need 40 people? Did you need more, did you need less, and how would you have found out?" and the number of times this completely catches them off guard is staggering. It's like... did you choose that number for a reason? Or was that just the most you could fit in your budget?
And sure many hands make light work, but there's an inflection point where the sheer weight of your organization becomes a liability, where getting anything done or changed requires the involvement of so many people that most just don't bother unless it's an emergency. That's how you get corporate rot, and that's how you get all the massive companies we rag on here about all the time who have been making like, 5 products since before most of us were born that everyone fucking hates but everyone uses because everyone else does.
I'd like to emphasize further the but. The speed of tasks scales with the inverse log of the organization size.
In other words, as you get bigger, every project gets slower, regardless of how many people you have working on it. A project that would take a week in a tiny organization might take a month in a medium organzation and 2 quarters in a large organization. Sometimes there are good reasons for this, sometimes not.
In a large orginaization, launching a new feature requires interaction with lot of other existing teams which slows speed down. Auth, permissions, metrics, etc. The new feature must seamlessly interact and integrate with existing systems.
Yeah but usually these people are top candidates and occupy the other engineering manager positions, and you, managing a super productive team of 5 or 10 instead, don't even get into a single interview there. And that applies to every single company I have applied to.
> how do you end up having more than 500 excess people than what you need
The Law of Multiplication of Subordinates:
> we must picture a civil servant called A who finds himself overworked. Whether this overwork is real or imaginary is immaterial; but we should observe, in passing, that A’s sensation (or illusion) might easily result from his own decreasing energy—a normal symptom of middle-age. For this real or imagined overwork there are, broadly speaking, three possible remedies
> (1) He may resign.
> (2) He may ask to halve the work with a colleague called B.
> (3) He may demand the assistance of two subordinates, to be called C and D.
> There is probably no instance in civil service history of A choosing any but the third alternative. By resignation he would lose his pension rights. By having B appointed, on his own level in the hierarchy, he would merely bring in a rival for promotion to W’s vacancy when W (at long last) retires. So A would rather have C and D, junior men, below him. They will add to his consequence; and, by dividing the work into two categories, as between C and D, he will have the merit of being the only man who comprehends them both.
There is a tendency for managers at big tech companies to want to hire regardless of need and "build an empire", so they can then say on LinkedIn that they managed n number of people. Then they will move to another big tech company, rinse and repeat. At these companies, the more people you manage is translated by higher ups to responsibility and salary. There isn't much reward to keep a team small, focused, and efficient.
Conversely, I also know folks where everyone is redlining in the org because they cut deep and folks who can leave are able to leave for equivalent or better roles. The market isn't great, but it isn't 1999-2000 or 2007-2009 either.
If you want another job, make it a job to find it, and you will eventually find it.
> Actually, I know why. It's because they have too much money and when you have too much cash, you start splurging without thinking and then one day the chickens come home to roost.
But that view might oversimplify things from a business perspective, especially beyond the case of Dropbox.
When a company has ample cash reserves, a common strategy is to leverage the opportunity cost. This can mean growing the team or investing in ventures with both planned and unplanned outcomes. Take Microsoft or Google, for instance: both have a long history of projects and acquisitions that might be considered failures, but these bets were possible because they had the resources to try, even if some failed to pay off. This approach acknowledges that some investments will succeed, while others are simply part of exploring new growth avenues.
As a former engineering manager this is obvious, in my opinion. Companies don't really like laying people off and PIPs are long and require work. If someone is underperforming, hiring a new person is easier. Alternatively, instead of retraining someone, hiring a new person is easier, and you just keep the old guys around doing whatever. Plus, once in a while they might actually offer something (they typically are very knowledgeable about past decisions)
Given how much money there is in these industries this strategy works for a long time.
The alternative is a harsher work environment that is common in other fields. Despite the popular belief on this forum, tech work has some of the most genteel management of all industries.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
Often with this sort of thing, the company is essentially sacrificing future revenue to cut current costs; projects get delayed or cut, but, hey, the balance sheet looks better for a bit!
The other reason it happens (and here the cuts would mostly be operational and sales) is if the company just isn't getting as many customers as it had expected.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
What you need can change over time. As I remember, Dropbox acquired a bunch of companies of the years, so maybe some of them originated from there. They also had many new products and tried to move into new directions, which probably also brought many new people.
Maybe not. But typically natural attrition rates would let a hiring freeze take care of most of this. Layoffs are kind of normal current day, but a 20% layoff is not.
The common argument against relying on natural turnover rate is that the most competent workers are also those who are the most likely to leave because it is easier for them to find a new/better job. So if a company just freezes hiring instead of doing layoffs it will experience a reduction in the competence of their workers.
I don't know if this is empirically true or not, I haven't seen any statistics. But I don't see any obvious logical errors in this reasoning.
I suppose it is the following:
1. Maybe they didn't over-hire but instead the economic conditions changed.
2. Maybe instead of gradually letting go of people it is best to wait and then strike once and hard.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
Because circumstances change and evaluation of projections and optimal employment numbers under them change, and it's never optimal to hire enough people to actually assess that with minute-to-minute updates.
> There's something to be said about spending within your limits and not splurging on the next shiny object.
There is something to be said for hiring and cutting slowly rather than rapidly in response to changing circumstances, and that is that, under the material incentives in a competitive capitalist economy, it is a poor strategy for a corporation.
> Way back when it was called cost control and operating within a budget.
Guess what happens quickly when you are good at operating within a budget and the projections on which the budget is based changed and so the budget changes going forward?
how about you estimate a software project to within 20% accuracy? I've never seen it happen once for anything beyond the most trivial thing. have some humility buddy
As a recent example, when you have "the great resignation" of 2021 turn into (in my view) "the great hiring" of 2021 followed by the Silicon Valley Bank collapse of 2023, it's obvious that hiring managers just follow what is trendy.
Obviously past results do not guarantee future, but what the masses follow is generally a recipe to disaster. I think that's why we're seeing the return/visibility of stacked ranking. Management theorists see one successful company trive or a former successful company fall, and then everyone follows suite because they're "data driven," not driven by first principles
Huh? It's obvious to almost everyone that Dropbox is in a tough position in that it's largely failed to expand its offering beyond the very original product and value prop, which is also being eroded by the other major players.
So they attempted to use DB's position to leap-frog into new product categories, which require big spend on R&D and related teams, as well as new heads for supportive teams (sales, marketing, support, etc).
It's not working, so they are pulling back and re-trenching.
That all seems pretty transparently NOT a "having too much money" problem.
> Didn't they at some point see that they have more people than valuable work, and maybe we should deal with that problem instead of hiring another team to place even more bets?
Well, part of the overhire spree was to prevent other companies from hiring the talent.
> What is management exactly doing during the time they went from 1 excess person to 500?
It is usually not the case that these people are standing around and doing nothing. It is more that they are working on initiatives and projects which the company is discontinuing now.
When the company has a lot of money investors expect them to spend some of it in finding new directions and opportunities. It's not all just spent on keeping the lights on, and the servers humming.
If they don't do this people in 3 years will be asking "What has Dropbox been doing all these years?"
If they are doing it right you are just amazed by the steady trickle of new features and services, and improvements which keep the company relevant in the years to come.
Also, factors like quality, maintainability, performance, etc are open ended and hard to measure. So teams tend to just keep improving them. Some amount is critical, some is important, some is nice to have and some is just excess.
Sometimes I think that tech world has been after "growth" for too long. Instead accepting that at some point companies are reasonably mature. After which they can do more incremental development with lot less head count growth.
That’s such a naive take. For the past 5 years at least these layoffs are not about particular projects being discontinued or even improving the bottom line. This is about how people are expendable and their priority is investors.
> Jokes aside, how do you end up having more than 500 excess people than what you need?
Twitter fired 80% of their staff; and they've been releasing features faster than when they had 4x more people. I suppose work can expand to occupy whatever available headcount - nobody cares whether it's useful work or not.
> Actually, I know why. It's because they have too much money
Money was almost literally free for like a decade. I'm so glad that era is over, and I hope it never returns, but the period of adjustment as businesses discover that they have to actually have a business model again does suck a bit.
Forgive my ignorance, but why would very low interest rates ("almost free" money) be a bad thing we want to avoid?
Isn't it for best if society keeps interest gathering, rent seeking, behavior to a minimum and instead encourages that more of the available capital is put to good use?
Because having a functional business model is what defines whether the use of capital is good or not. Bad outcomes from low interest rates are all these layoffs from overstaffing, all the wasted human-years on blockchain & NFT garbage during 2021, VCs blowing money on obvious failures like Juicero, etc. These are not good uses of capital, and if they had to have a real business plan to get capital in the first place, it would not have been wasted.
I suppose it depends on what the alternative was for that capital. Sitting in an index fund wasn't really doing anything useful for society, but providing high paying tech jobs to dropbox employees was probably very useful to society. Especially when you consider all of the downstream impacts of those employees spending.
Similarly, I would ask if society gets more good out of transferring the wealth to crypto-bro's or from it sitting in relatively low yield investment vehicles? I would wager that the crypto bro's buying lambo's acted as a better economic stimulus than non-productive interest gathering.
Now if the choice had been between investing in "good" businesses vs "bad" businesses I would agree, but I don't think it was.
> I would ask if society gets more good out of transferring the wealth to crypto-bro's or from it sitting in relatively low yield investment vehicles?
I think rewarding people for dumping useful labor into a black hole is bad, yeah. If we're just handing it out, we could've split all that money to everyone equally and reaped much better rewards as a society (useful social services; more family stability; less poverty) than giving a few gambling addicts overpriced cars in return for nothing.
It feels like you're only thinking about it at a personal level.
From a higher level perspective, we didn't give them those cars, they bought them. And buying them provided tangible benefits to the people who made them and the companies that serviced them, etc. The money was freed from the dragon hoards of the unproductive and actually SPENT on something. Spending is useful. Hoarding isn't.
Could it have been better spent? Sure, but spending it at all is better than leaving it to rot collecting a few points interest without actually producing anything of value.
Jokes aside, how do you end up having more than 500 excess people than what you need? What is management exactly doing during the time they went from 1 excess person to 500? Did they just hope the "macroeconomic headwinds" would become tailwinds? Didn't they at some point see that they have more people than valuable work, and maybe we should deal with that problem instead of hiring another team to place even more bets?
Actually, I know why. It's because they have too much money and when you have too much cash, you start splurging without thinking and then one day the chickens come home to roost.
Honestly, I would not hire a single manager from these big companies because they operate in an environment where they're playing with monopoly money and don't know what reality is. There's something to be said about spending within your limits and not splurging on the next shiny object. Way back when it was called cost control and operating within a budget. All that management theory seems to have been lost in the age of cash injections and valuations based on everything except retained earnings.