The same forces that enable high tech salaries, also make layoffs more likely.
- The market for talent is competitive. So companies bid up to the absolute max they can
- The market for managers is also competitive. Creating dynamics that lead to larger teams and raises for team members
- Companies allow things like remote work, which is a perk, but also has a lot of abuse in terms of how much work gets done
The end result is that if companies are spending their max, if there's a shock to the market/system etc they have to cut. You'd see this less if there was more padding/ less competitive pressure/lower salaries.
I think that's fine and the system is working as intended. People should be freed up to move to other roles where they can be productive. Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
The issue is not that you're getting fired. The issue is that healthcare is attached to employment, that makes zero sense. There should also be some reasonable government provided safety net so people can reskill/learn and move to other fields.
A somewhat sensible take, but the issue isn’t just healthcare. A lot of your life is based off of long-term, fixed cost cash flow. E.g. you can’t pay less on your mortgage just because you got fired. Even with savings, getting laid off is highly disruptive, and, if done as part of a broader downturn in the market, you may never recover the required cash flow to enable your lifestyle.
Exactly, I feel a lot of my coworkers fell under this trap: if you need cashflow for mortgage on your 4m mansion in (affluent neighborhood), you can't really afford it.
> bit weird how people feel so differently when they get fired
That doesn't seem the least bit weird to me. If I choose to leave a job (or relationship), I could quite sensibly feel differently if that same job (or relationship) chooses to leave me.
> Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
Really? You think its weird that someone leaving impacts that person more than their manager, team, or company?
A manager doesn't care that you leave because he still gets to bring home a salary, all they have to do is hire another person and maybe cut back on scope for a little while. When someone is layed off or fired they have to go find a new job, their income streams dry up, and are forced to rely on savings. People often have long term financial commitments they cannot back out of, and not knowing how you'll make rent, if you can afford your child's school fees, or even maybe having to cut back on how much you eat, _is stressful_ and emotionally taxing.
Are you fucking kidding me? "Which is a bit weird" I'll tell you what's weird: management who doesn't understand that their employees rely on them more than they rely on the employee.
Of course its fine when someone chooses to leave their job, they've made contingencies and planned around it. Whether it's through savings, another job, or the lottery, people have at least some idea of their plan when they leave a job.
Very generous severance packages and companies/laders should be commended for this. If it's a one-and-done big cut with generous packages to save the company, then good on them.
Somehow overhiring and maintaining said headcount long enough to need to do a 20% cut is probably less commendable, but not exactly an outlier there in the current climate.
I've always wondered about all these standalone "point solution" companies and how durable the model is. In the current climate of reduce M&A, and cost consciousness there is no one to sell to. And as the big platforms - AWS, Azure, GCP continue to grow.. it strikes me that more big companies would rather have a one-stop shop full of 80% solutions than pay for 100 different SaaS.
Severence is only so they can dodge regulatory scrutiny. They are not doing it out of the goodness of their hearts and was a line-item in the burden category for those employees when they were hired.
What regulatory scrutiny do you mean? They don't need to provide severance, as far as California law seems concerned. I'm not a Californian, but an Internet search shows they're an at-will state. So it seems like everything is on the (legal) level.
There's really no pleasing some people. Companies make cuts and don't give generous packages, they're evil. They give a package and it's just so they can dodge scrutiny.
Remember how there used to be a blog (or maybe it was a Tumblr, I forget) that documented every "Our incredible journey" post that inevitably announced the start-up's closure?
I think we need another one for "An update from <company>", as this has seemingly become the standard subject to use when you're announcing layoffs or data breaches. I saw an identical headline earlier today from Sony announcing a studio closure:
Something weird I noticed about Dropbox:
I cancelled my paid account two years ago. I had 5 terabytes of storage being used (mostly shitty concert vids and food pics).
Everyday they email me telling me I’m over my limit. They always “threaten” to delete the data but it’s been two years since I cancelled.
My Qs are: why are they hoarding my data for so long? Why would they want to do this? How cheap is storage for them to want to do this? How likely is it that they have sold my data to train various LLMs with?
If they delete your stuff, you almost certainly won’t resume your subscription. The cost of storage may be lower than the benefit from re-subscriptions, and possibly the cost of actually implementing and maintaining an automated deletion process in compliance with all jurisdictions.
You can just delete your data dude. No one is forcing you to keep it there. They’re generally not going to do something destructive because of unpaid bills. It’s nice of them
But why do I have to log into Dropbox to do this? I haven't logged into the site in 2 years and don't plan on it. I just find it odd that they keep threatening to delete my data but from where I'm standing it looks like they will keep my data indefinitely.
I'm not forcing them to do anything. I terminated my service and they're still keeping my data. Seems like shitty consumer rights that they'll just keep the data regardless of what I do.
That's what I'm trying to figure out, if others have similar stories.
Sure the license agreement would not legally permit that.
I wonder what kind of legal recourse you would have. There's obviously copyright infringement, but I think state laws like CCPA include remedies for violations.
I'm always a bit confused by profitable companies with (presumably) large reserves laying off lots of people. I get that they want to remain profitable. But sure 500ish people could be put to some use? A new product, a new market, a spinoff. Whatever? Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?
It always seemed common sense to me that once a piece of software became stable and profitable you would need a much smaller engineering staff than when it was being built. The opposite seems to happens and orgs 10X their engineer headcount once they start making money.
It makes sense to keep some high performers and a few redundancies to stabilize/modernize it and make small improvements, but it feels like tech got really bloated with these massive corps who were trying to burn as much as they could to keep all the VC money flowing. Take like Uber having a team that built and maintained a chat app just for internal use, and every single big org having a bunch of teams responsible for various "some_dumb_name" that is the "custom X for 'Y'" where smaller teams just use the OS solutions to those problems.
> once a piece of software became stable and profitable you would need a much smaller engineering staff than when it was being built
This is not generally the case, except in monopoly situations.
Your software product generally has a competitor, and they're busy trying to make theirs better than yours -- whether with more features, better integrations, whatever it is.
So your staff size generally stays about the same in order to build more features desired by customers to prevent customers from switching to your competitor and you go out of business. And certain features, by themselves, can be more complex than the entire v1 of a product. And/or involve massive refactoring, etc.
The companies that get to reduce their team size are often because they're in a monopoly position, and then customers suffer because the software gets stagnant and the features they need don't get built. That's capitalism failing.
Also, something like an internal chat app isn't always a bad decision. If your company is above a certain size headcount, it can literally be cheaper to build small tools than to license them. Especially when you can more deeply customize and integrate them, which you often simply can't with off-the-shelf software.
> I'm always a bit confused by profitable companies with (presumably) large reserves laying off lots of people.
According to their financial statement, Dropbox has more liabilities than assets. So yes, they have a large cash reserve, but with an even larger debt offsetting it its hard to argue they are in a good overall financial position.
Five or 10 years ago, they were doing a lot of this. Dropbox Paper ("a collaborative online workspace that allows you to create, share, and edit documents and notes with your team") for one. It's still active but it never took off. I was just notified that there is some sort of migration taking place which is probably related to the RIF.
The company could put them to some use, or they could get capital and launch their own ventures. It's equivalent from a market perspective, except the one you suggest requires unnecessary coercion (forcing the employees to work on something they may not have signed up for).
At the end of the day, the american market place is distinguished in that venture capital, especially in tech, is very accessible. Being laid off seems to be a bonus in the hunt for VC money.
It's the same reason companies return dividends. Sure, they could use the money for R&D and launching a new product, or they could send the money to investors so that they can scour the marketplace for a new technology of their own choosing for investment. The first one unnecessarily takes investor money for a project they may not have signed up for, whereas the former maximizes their freedom to invest in what they find interesting
Remember Better, the mortgage company? They were briefly notable for laying off 900 people on a Zoom call. However, no-one asked why a re-envisioned mortgage application/process was failing in the best possible market. My opinion is Dropbox most valuable commodity is the millions of Windows PCs with a system level scheduled task that is vulnerable to "hijacking"... basically they are a data stream.
It was not failing in the best possible market. Better was a successful lender for mortgage refinancing. Better struggled to establish itself within the purchase market which has far more complex relationships.
Those employees were costing more than the value they were creating.
If the marginal product of labor is lower than the marginal cost of labor, the company should reduce headcount. If higher, the company should increase headcount.
Arguably the value they were creating was influenced by the direction and application that labor was directed at. Redirecting that available labor at something more valuable would fix that as well wouldn't it?
Every new product or market usually also needs additional investments, maybe even new workers with relevant domain knowledge. And Dropbox did try new products and markets, but what if it's not working out? Should they continue until money runs out?
And some interesting part of this announcement is the mentioning of the grown overcomplex management. This kinda smells of some shrinking for health-benefits. For some reason or another, they grew into a wrong direction, and maybe now remove the unhealthy parts to be able to operate better.
> But sure 500ish people could be put to some use? A new product, a new market, a spinoff. Whatever? Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?
I think a lot of the low hanging fruit in tech has been eaten up, bought up and consolidated, or actually was recognized as much more difficult and expensive than they actually thought. The leadership talent and vision in a lot of these companies is also painfully lacking. In short, to answer your last question: probably not. And I think they're terrified that Wall Street is going to notice.
I agree with both comments. ~500 can surely build some amazing tech, smaller teams have done more. I personally do think there's still a lot of relatively low-hanging fruit left, especially with the boom of possibilities due to AI, or simply what one can do with modern CPU/GPU performance, new browser APIs, modern tech factors, etc.
I also do agree and think leadership talent and vision in a lot tech companies is painfully lacking. This are the companies that could burn some money and use their wedge in the market to build some really cool things, but they wont. I guess to some degree, ironically, the money they're making might be part of the problem.
But which people: the sales/marketing, the developers that actually make the product, across the board? At some point, development gets to a stable and solid product, so revenue increases come from staffing up sales/marketing. So does that mean you can reduce the devs to try and increase new users or that you've overstaffed the sales/marketing? Maybe there's just too damn many middle managers? Will the cutting be a surgical blade or a broad axe?
Often they target the lowest performers for such layoff. Of course they rarely succeed in doing that, but the idea is that these people should have been let go anyway but weren’t for various reasons.
> Often they target the lowest performers for such layoff.
In my experience, this is often an after-the-fact rationalization by people who "survive" layoffs to explain them, and a convenient justification by leadership for layoffs. If you've ever been in the room when layoffs are planned or discussed, the actual process is way more focused on blunt cost, personality of the people involved or on the chopping block, and is often practically a tossup considering "performance" is not really a clear or meaningful metric (actually, more often it's arbitrary for most companies --- they will find the metric they need to justify laying off someone). This phenomenon is greater the bigger the company and the more abstracted managers and leadership are from their lower level employees.
Why not? Some companies do try this. It rarely succeeds though. The reason is that re-education en-masse, restructuring of the chain of command, re-allocation of resources are hard. Most businesses at some point enter the phase where the inertia is the strongest driving force: they only need to apply a tiny fraction of initial force to keep the lights on. At this point, trying to restructure is bound to be very hard.
Maybe, if the company can foresee and realistically assess the problems it's about to face, it may gradually prepare for the transition. I've seen this happen at my friend's job at Dell storage division: some storage product failed, they tried to reshuffle the teams to start working on something else, with some code reuse from the previous one. It still didn't go well, and a lot of people were still let go (because the initial effort of developing a new product cannot really accommodate an army of various kinds of extra personal that's necessary for mature product). They sort-of survived, but with a huge loss.
I'm a libertarian in most things but I still don't like layoffs from profitable companies.
Like it's probably not good for our society that people have to up end their life every few years and probably move to find a new job.
Both my parents stayed in the same
job for their careers and it meant they could stay in the same place, have kids, build ties to the community, etc. Seems important if you want to not die out as a society.
> Like it's probably not good for our society that people have to up end their life every few years and probably move to find a new job.
The thing is, Dropbox is done (as in feature complete). Like when the construction of a building completes, many people are "laid off" because they aren’t needed anymore. Yeah, you need to keep some people around for things like maintaining the building, but not to the scale of the original workforce required to build it.
It is "good" that the excess labour is freed up to go work on the next "building". What may not be good is that the workers didn't think to associate with each other like construction workers do. Construction, being a much more mature industry, typically keeps a clear separation between the workers and the building so that then construction is done the entire excess group of people can be lifted on to the next project instead of all going their separate ways.
Software will undoubtedly go that way eventually. But it is, in the grand scheme of things, still early days for it as an industry. We haven't yet learned the lessons that older industries have.
> Both my parents stayed in the same job for their careers
My father was the same, BUT.. this is an INCREDIBLY risky thing to do career-wise in the modern era. Given how much tech advances and that we actually face international competition that a lot of our boomer parents didn't during their career, I don't see really any going back either.
Some of the worst layoff situations I've seen were guys who worked in the same company for 25 years.. long enough that their knowledge & skills was too company-specific, but not long enough to retire. Just because someone seems indispensable doesn't mean they are safe.
Having to drain savings for 1-2 years jobless after a layoff in the last 10 years of your career and reset at a probably lower salary can set back your retirement 10 years.
Fully agreed - yet, we as a society consistently and systematically trade (or let "others" trade) much more critical aspects of life, such as quality of air, water, food etc. for short-term profits, even though that very often has no clear/direct positive impact on any other comparably valuable aspects of our lives.
So it's no wonder that "some people losing their jobs and needing to move for a new one" is irrelevant, when the only goal is profit maximisation, even though we don't even understand what for.
The uncomfortable truth is that pretty much any business can cut staff by 20% without impacting overall performance. Provided that you manage to weed out the tail end of the performance bell curve that is.
Most of the time, reducing staff is a healthy move for the business and the impacted employees. The company will not only save cost, but strengthen its culture of high performance. And under-achieving employees are often fundamentally unhappy in their role. While the short term impact of being made redundant can cause some distress, these people can still use the occasion to reset their careers.
Dropbox my one critique is can you please make it affordable again. I just can't justify the cost as there are cheaper services out there. I don't care about PDF signing etc. I fear OneDrive/Google Drive are eating you lunch because it's a hard sell to be competitive against them price wise.
I left Dropbox when they added (and preemptively enabled) a checkbox that shared your data with them for AI training. I refuse to do business with a company that will just unilaterally invade my privacy like that. They can make it as cheap as they want, I'll never go back.
Selling data is always the last play for all businesses that have data.
Either you never give it to them in a way that can be sold (e.g. fully encrypted), or you expect them to sell it when the leaders need to increase cash flow.
Exactly!!!
I stopped being a customer when they lost touch with their customer base. They decided to become something else, adjust plans however they thought, introduced useless featured and all these while riding the money train.
I feel sorry for those being laid off, it’s not immediately/directly their fault. It’s the management and the product responsible that should take the blame.
It's a product that I was willing to pay for (until I required native E2E encryption). _iCloud Drive_ is a feature, mostly — aside from the fact that you still have to pay for it to be useful, so kind of still a product.
Steve Jobs was wrong about many things, and this was one of them.
A feature of what? Surely Jobs didn't expect a feature of Windows, OSX, Android, Linux, and ChromeOS to all seamlessly interact with one another.
I don't doubt that Jobs might have seen Dropbox as a feature that Apple could have implemented across the Apple ecosystem, but that's a pretty limited view of where the value of Dropbox lies.
I'm responding to the person who quoted Steve Jobs by saying Dropbox isn't a product, it's a feature. 17 years is a really long time on the web, and Dropbox has not only been a product, but a successful publicly traded company for most of that time, during which so many other "real" products have risen and fallen. The fact that you subscribe to Google One doesn't tell me anything, except that Google created a product to compete with Dropbox, which is also a product.
Funny how Hacker News spent the past 15 years laughing at anyone questioning the viability of Dropbox as a business, but then after two years in a down market half the site is begging them to be cheap again.
What's the matter? You like the sound of that crusty, slow Linux NAS that this site has derided for years?
As CEO, it's his responsibility to make/approve the decision to do the layoffs, or not. The buck stops with him. That's all that it means. It doesn't mean he's liable for any hardships.
> but acting like petulant child and lashing out at CEO won't do much.
I don't think anyone is attacking the CEO with the expectation that he's got his iPad in-hand, reading every comment through his tears. What we are saying is that corporate doublespeak is unbelievably fucking grating when it doesn't correlate whatsoever with tangible change at the company. This kind of repeat behavior is what makes people (justifiably) laugh when CEOs walk out onstage.
Like when Tim Cook steps out on and insults us all perennially with his "best iPhone yet" comment. Like, duh, of-fucking-course it is! Why don't you tell me something I don't know, show me some form of change in your posture or the way you provide your products and services to me. Don't just advertise to me - convince me that you're not steering the company in a direction that sucks for everyone but the CEO.
> Tim Cook steps out on and insults us all perennially with his "best iPhone yet" comment
I loved this sentence and the sentiment behind it. Nowadays whenever I get the urge to upgrade my old iPhone 13, I go and rewatch old recordings from 2021 of Tim Cook gushing about how the phone I already have is such a huge leap forward for humanity and why everything that came before it is garbage.
Applying this to CEOs and layoffs, every time you join a new job and start to drink the company kool-aid about how you're part of this wonderful family, go and reread that CEO talking about how he took personal responsibility for throwing hundreds of his "family" out on the street right before the holidays.
These words mean nothing really. I expect the next CEO to not use meaningless phrases. How does "taking responsibility" works in his case? What does it even mean other than PR fluff?
why would you expect the next CEO to not use weasel words? it's like they all go to the same "mom school". they all go to the same tailor to make teflon suits so nothing sticks to them, and they all learn the same "rain in spain falls on the plain" dreck.
No, responsibility is not a word. Responsibility is an action.
If I'm on-call, I'm responsible to carry my laptop with me and be available immediately to fix critical issues. I don't just say "I take responsibility of being on-call", and the leave my laptop at home, get drunk and fall asleep in a bar for the weekend. That's called being irresponsible.
I see. But that's still like doing your job. I do my job for being on-call by having my laptop with me and phone on, etc. If do my job badly I get fired.
So this CEO is saying, "if I do my job poorly I understand I could get fired."
But, did he/she do their job poorly? That's the thing I can't figure out quite yet. It seems it was bad for the laid off people, but maybe not for Dropbox?
Actually they don't. Well run companies have cash reserves and expect to have periods of ups and downs. They don't pray to the alter of the next quarterly report.
They should make whole those affected, as best as possible. The CEO, who is the responsible party by their own declaration, should distribute their personal wealth to those affected until all parties have approximately the same amount of wealth.
A 20% layoff means either the market changed very very quickly or something went terribly wrong in the company strategy. Here it's the second scenario and I'd expect the CEO to be on shaky grounds after such bad results.
There needs to be more explanation on where the CEO screwed up that badly and the consequences for the management.
At the very very least, they should be explaining how Dropbox is suddenly a 20% smaller company, because either that means the market has contracted by 20%, or Dropbox has shit the bed as a competitive entity in said market.
Both options should directly imply that the CEO should earn less. Either you're running a smaller, simpler company, or you sucked at your job.
How about describing what exactly taking full responsibility means for them in that particular situation?
Saying e.g. what is the impact on the situation for those responsible might be nice - no bonuses for next year? A plan in place so that this doesn't happen again? Stepping down as a CEO?
I mean, if I take responsibility for e.g. wrong tax filing, I pay the fine penalty, and/or go to jail.
Saying "I take responsibility" some kind of failure while having no consequences for said failure is not taking responsibility.
I dunno. It may take 1-2 months to prepare for Leetcode style interviews, and this can be pretty mentally exhausting. Every time you fail to solve a leetcode question, it feeds your imposter syndrome, which is probably even worse due to getting fired.
With all due respect, that sounds like a personal shortcoming to me. One can (and should) not take interviews personally. One also can (and should) be able to acquit oneself well at an interview even without prep time.
> One also can (and should) be able to acquit oneself well at an interview even without prep time.
I don't agree. If you don't prepare at all for an interview, it shows. Aside from leetcode, it's also important to research the company.
My point is mainly that I might be upset if I were in that group that's laid off today. I don't want to prep leetcode for several weeks. It feels like a waste of time.
Wow, that's horrible. And you might even have to stay at a 4 star instead of a 5 star resort in Bali when you take a vacation during your severance, job market is tough.
Even worse, you might have to miss one contribution to your FATfire investment account to deal with the extra risk. Compounded, that missed contribution might mean you'll have to retire at 46 instead of 45.
How dare these companies treat these people this way. They took the massive risk of working for an already-successful company at $250K/yr with a $200K stock package, and now fat cat Drew Houston dares to leave them with just an abnormally large severance after they are no longer needed.
I don't think your tone aligns with the community guidelines[1]. Please consider not being snarky and sarcastic but actually responding to the merit of what people say here.
Really? 16 weeks of salary, or 4 months of pay. In my country, you get 3 months of pay as standard when you're fired from your job. Doesn't seem that great to me to be honest.
US salaries are quite a lot more; lifestyle creep is a thing but at least for developers they get paid a lot more than the average worker in the US than say in the Europe. Factoring that, 4 months is amazing.
> But are you not expected to work those 3 months?
When you are leaving on your own term yes.
When you are laid off you are technically still an employee for those 3 months but nowadays many companies will just tell you to not show up for security reason.
Personally, I'd consider this nothing to write home about. It's OK. Not great, not terrible.
If we're laying off 20% of the company, I'd expect the package to be somewhere in the 6-12 months range. To me, that would seem more fair, considering they are completely restructuring the whole company.
I'd rather take having a tech industry at all and the 2-4X bigger US salaries (and 30% lower average taxes) than having my fellow citizens shoulder the burden of giving me 6-12 months of daycare.
In the US luckily the job market is still quite dynamic (and extremely tight by historical standards) so only in an extreme scenario would someone with Dropbox on their resume need 12 months to find another job.
They might have to take a pay cut from a 99th percentile salary to a 96th percentile salary though. Rough, I know.
In big tech in the US, 4 months is usually enough to find another similar job in the industry. Also in the US for mass layoffs at big firms, the minimum is effectively 2 months because you are required by law to give 2 months notice to workers about such layoffs, 2 months severance is a way to not have to give such notice.
This is a bullshit package because of the healthcare.
I was laid off from a different company with access to 18 months of COBRA. Dropbox is offering a third of that. Lots of job searches take longer than 6 months, so the employees are going to be left high and dry right when they need it the most.
For the non-Americans, my COBRA expenses are about USD$2,000/month for me and my partner. I’m paying as much for healthcare as I am for rent. Even so, it’s still financially better to take COBRA than pay out of pocket for my prescriptions.
I wonder if they meant paid COBRA of 6 months, bc 18 months is like the minimum to offer continuing coverage. COBRA coverage is a Federal Law for large employers.
"Q11: How long does COBRA coverage last?
COBRA requires that continuation coverage extend from the date of the qualifying event for a limited period of 18 or 36 months. The length of time depends on the type of qualifying event that gave rise to the COBRA rights. A plan, however, may provide longer periods of coverage beyond the maximum period required by law."
All West Coast states have free healthcare (medicaid) available if your income is below a certain threshold. And there is no time limit on that. It won’t help with rent, but at least these folks won’t be completely without healthcare access.
There's pretty much no way they'd qualify for Medicaid if they were a dev at Dropbox. The income limit for Medi-Cal is $20,783 for a single adult, $28,208 for a household of two adults. Chances are they were past that income limit the first few months of the year. You don't just immediately qualify after making $140k annualized for the first 10 months and then hit $0 one day.
Plus, they're getting 16 weeks of salary. At $140k/yr, that's $2,692/wk. Lets say their severance starts next week. There's 8 weeks left in the year. So they'll get 8 weeks of pay in 2025. $2,692 * 8 = $21,538. So no, they won't qualify for Medicaid at all in 2025 if they make that much as a single person.
The linked article is specific to executives and kind of confirms what most are complaining about here.
> a 10-year study of over 2,600 leaders showed almost half (45%) suffered at least one major career blow-up — like getting fired, messing up a major deal, or blowing an acquisition. Despite that, 78% of these executives eventually made it to the CEO role.
An executive can make a series of awful decisions and still advance in their career.
Gotta prevent panic in stockholders is the main priority of a CEO in publicly traded companies. They only concern themselves with the well being of their employees as much as how it affects the stock price.
TBH it feels like Dropbox has a pretty fair earnings multiple at the moment (~4X). Have we reached a point where tech companies have been around long enough that they can / should enter a sort of maintenance mode? It feels like there is a company version of the Peter Principle. Why do they (Dropbox specifically) need to continue to "innovate"? Wouldn't it be better for all parties if they just focused on maintaining the best possible version of their core offering at the lowest cost? Maybe Dash (or whatever) will work but most likely it won't, and investing in that initiative puts their whole business at risk.
There exists such a mode: it's called dividend distribution. But currently DBX and many other tech companies aren't paying any dividends to stock holders. So if it's not growing and not paying dividends, what is the company doing?
Alternately we have entered a phase where layoffs have metastasized as a thing to do so much that executives are being asked about it. "We've noticed you haven't done any layoffs yet, can you explain that?"
> "As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change."
As with other CEOs who say such things in similar situations - does this "responsibility" amount to anything? Like loss of salary or options or seniority. Or is this just empty words?
I appreciate that this action is probably necessary to safeguard the business but, as someone who has been at the sharp end of a number of redundancies, I wish leaders would be honest:
"We tried stuff but it didn't work. I was and am in charge, and I'm staying. We're making you redundant because we need the money more than we need you."
Obviously no leader would say such a thing. But the people affected (and thas not just those being made redundant) deserve honesty, not platitudes.
"I earn the big money because I make decisions and I take risks (with others lives, but let's not talk about that). My decisions haven't worked; my risks haven't paid off. I'm however letting you take the hit, because I'm too important for that kind of shit. I've more decisions to make, and risks to take. My family is fine; my pay is fine. It's just you who are affected.". -- Your CEO, who still makes more money that you do (or don't), no matter what.
(Your comment was dead but I vouched for it because I want to explain why youve failed to appreciate an important distinction.)
tldr: the redundancy is not the announcement
I think people (and I include myself) do understand that companies need to adjust their workforce. I think that decision is not wholly moral in nature. But it does have a moral component - and Dropbox seems to appreciate that somewhat in the assistance they're providing the people who are leaving.
But what isn't moral is an individual announcing publicly that they take responsibility for acts that cause trauma to others (however constrained that decision was) while in reality that responsibility-taking involves no consequences at all the individual. None.
In the large train station in the city where I live, the automated voice announcements "apologise" for train cancellations. I'd argue that this is as empty and insulting as this CEO's email - because no responsibility has in fact been taken. The CEOs words and the announcement software are as morally empty as eachother.
If you look at its earnings they have appeared to plateau and there isn’t a major offering planned that will change this.
I am reminded of Slack which has a similar history of rapid growth followed by a very competitive market and then significant slowing. Maybe Salesforce could acquire Dropbox and bundle it into their offerings or some other similar company?
Slack shot their own selves in the foot iirc. They were miles ahead of any competitor, employees loved it, and then they just started gouging all their whale customers in contract negotiations, to the point that they started looking elsewhere...
If this isn't the full picture, let me know. I was at multiple companies trying to move away from Slack as the cost was not justifiable
Teams and Google Chat. They're both incredibly bad compared to Slack. But if your org is on 365 or Workspace, you're already paying for them. Big orgs don't love double-paying, quality be damned.
MS Teams was a large contributor as well to the downfall of Slack. It automates decently with the stuff most companies already have (AD, O365, and most importantly all that compliance bullshit), and nowadays it can even do landline telephony, providing enterprises with a way to reduce their exposure to Cisco crap on top of it.
In the end, Microsoft is IMHO once again abusing its stronghold on the market. Just the enterprise-compliance-integration stuff is more than enough to cause any medium or large company to move off of Slack or its competitors (e.g. Mattermost).
Company isn’t doing so great and future doesn’t look so great and people cost a lot of money so they are letting folks go who aren’t as valuable. This makes sense.
It wasnt needless, they didnt want to miss out. They are not sure what they didnt want to miss out on, but they knew for sure that they didnt want to be the only one not doing it.
Kind of surprising to me, because I think I've tried every large competitor in the space, and have found there to be a gulf between the Dropbox UX and everyone else. I'm more than willing to pay their premium price. I was hoping Proton Drive would compete, but I felt like I was beta testing an inferior product.
Anecdotal: I know a lot of people who use Dropbox, I don't know even one person who pays it. They pay for iCloud, probably cause it makes the iPhone experience even more convenient, but not Dropbox. I also don't pay for it.
The premium experience does have a heavy price tag attached to it since they repeatedly increased the pricing. In the UK, the first plan is now £7.99 / month.
This eventually led me away from Dropbox and I am now an iCloud user - the convenience and cheap prices eventually convinced me, even though I wish a Linux client existed.
Anecdotally, having been in client services, I saw Dropbox use plummet on both the client and agency side once the pandemic hit. People switched from syncing files to working directly on the same document in the cloud (e.g. Microsoft Word -> Google Docs, Keynote -> Google Slides, Sketch -> Figma)
In 2024, I wouldn't invest in any company that's based on "Files"
For context, Drew Houston's total compensation for the year in 2023 was $1.5M:
> According to our data, Dropbox, Inc. ... paid its CEO total annual compensation worth US$1.5m over the year to December 2023. That's a notable increase of 34% on last year
Even if Drew took minimum wage, that would save ~15 jobs assuming $100K all-in comp (which seems low to me for a tech salary). 500 employees is more like $50M/year, and probably more.
Of course, Drew Houston's net worth is ~$2B and he could technically loan Dropbox Inc money personally to save the jobs, my guess is a lot of his net worth is actually Dropbox stock that he would have to liquidate and would affect the stock price materially. He would also need to follow insider trading laws too and can't just up and sell vast amounts of stock on a whim. Most executives are on pre-approved schedules to sell any stock to avoid triggering insider trading.
The severance package Dropbox is offering is pretty good - 16 weeks of pay + an additional week for each year of tenure, impacted employees get their Q4 equity vest & prorated bonuses, everyone keeps company devices, an offer for extra time + help for people on visas, and job placement help for everyone.
Dropbox is a public company that is profitable, but not really growing through their flagship product. No growth is more or less bad on Wall Street. They also haven't really had a major hit since their initial file-sharing product and missed some shots they probably should have hit (mainly vs. Notion with Dropbox Paper, Mailbox acquisition, etc). With many systems moving away from "files" and to "cloud objects" like Figma, Notion, etc, their workhorse product might be going away over time too. They need the time and focus to find that next S-growth curve.
Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship.
> Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship.
Layoffs are the trolley problem but you get to pick how many people are lying down on each side of the track and if you want yourself to be one of them.
That said, if one reaches the conclusion that under their leadership they were forced to downsize by 20% (either due to over hiring, failure to reach revenue/growth targets, whatever) that should make that person one of the people on proverbial tracks. Compensation has little to do with it.
>that should make that person one of the people on proverbial track
That's a satisfying thing to say, but as practical advice it's absolutely terrible.
Often that person's leadership wasn't the problem, but even when it was, that doesn't necessarily mean that the company will be better-off without them. And that's the question -- what will make the company most likely to be the most successful going forward? Even if the current trouble is because of some of that leader's mistakes, the answer is often to keep that leader. Sometimes it isn't.
> Often that person's leadership wasn't the problem, but even when it was, that doesn't necessarily mean that the company will be better-off without them
How convenient (for them)! When the company is doing well, they get millions in bonuses because their irreplaceable leadership skills - which make them 2000x more valuable than the least paid worker - were instrumental to the organization's success.
When the chips are down, it wasn't their fault per se, and the company still would be allegedly worse off without them, so laying-off waves of those who don't have decision-making power is the correct remedy, until the good times roll again, and senior leadership is ready to claim responsibility.
It must be nice to claim "macro-economic headwinds" as justification for poor performance and poor planning, but still get paid bonuses for the never-mentioned "macro-economic tailwinds"
> must be nice to claim "macro-economic headwinds" as justification for poor performance and poor planning, but still get paid bonuses for the never-mentioned "macro-economic tailwinds"
What would you do if you owned a business? Fire leadership every time they make a wrong call? Or ban them from admitting they made a wrong call?
> Often that person's leadership wasn't the problem
Then what is the problem? Ultimately you’re paid the big bucks for being held responsible. Why isn’t it never something like the CEO doesn’t get any stocks that year. I’m not saying he needs to leave the company but maybe he should take a substantial hit to his pay. He has enough money to put food on the table for many years, unlike the people who are let go where it’s mostly a mixed bag.
No, I dont think there should be a penalty by default.
The objective of a company isnt and shouldn't be to run a charity. Some amount of layoffs are desirable just as a matter of housekeeping. Layoffs can be a hard part of doing a good job.
I think there are extreme examples and tactics where layoffs cross a moral line but not a legal line. for example, I think the humane thing to do is freeze hiring before layoffs so you dont relocate someone only to let them go.
That said, there are already a lot of business incentives to avoid turbulence in headcount. It is slow and expensive to hire people and let them go.
to play devils advocate, there are different levels one can look at that. From the level of the companies and owners, the goal is to make money.
From the perspective of society there are tons of answers. A common answer is that companies provide goods and services that give consumers more value than they cost, thereby enriching the lives of consumers.
It seems like some people, especially those who take issue with layoffs, tend to think the social purpose of companies is to give jobs/money to workers. This leads to a lot of frustration for those people because the entire economic system is set up such that jobs are an optional byproduct of making goods, not the other way around.
And who sets the standards? Their CEO-buddies on the boards. None of them would dare rock the boat.
One of the failure modes of 401ks and investment funds are large investment pools that don't vote at AGMs, leaving boards largely dominated by CxOs, to their own devices.
The ones out of job can join a different company, america’s unemployment rate especially in the tech sector tends to be low.
Them doing layoffs doesnt mean the people become destitute.
It is better to layoff people who are not adding value to a company, so that those newly unemployed folks can join a different company and build great products and add more value to the economy.
Ofcourse this only applies to US tech sector where hiring is tight. Especially when coming out of top tier companies like dropbox on your resume.
I don’t think its that dramatic, folks who tend to hold similar ideologies like you state, tend to not even bat a single eye, when average americans who lack the privilege of a tech worker lose their job to automation (with tech) or outsourcing or due to overburdened climate regulations and redtape leading to fewer factory jobs in America.
This is not the titanic, those people will move on to places where they’ll have a chance for promotion.
It aint me in front of the boot, random internet stranger, its emotional folks like you who end up getting taken advantage of by communist / socialist / comrade like ideologies, and drown entire societies with you.
I’ve lived previously under a communist government for 30+ years, they often spoke like you, brought our lives nothing but misery though.
You could have argued against my original comment, but instead you had to drop down to boots.
I guess boots are what you see in your life in front of your face.
Good day
Held responsible for what? The what part is written in contract for execs, movie stars, sport persons. I have not seen in any category people not getting paid per their contract for poor performance.
> Often that person's leadership wasn't the problem
What's the basis for this claim? I would rather think often it was the problem. Not absolutely every time, but most times. After all, the C-suite makes the decisions. I can not believe management decisions do not influence the course of a business.
Sure, it's possible that outside circumstances were such that no decision could avoid a bad outcome. But that's a rather unlikely possibility. Most of the time, outcomes depend on decisions. Otherwise businesses would be some headless automatons. And if that was the case, we should not pay execs much at all.
It's an obvious cheat: when times are good - it's all because of the leaders, when times are bad, it's all because of the environment. This is what they claim, but it is not the truth. Again, what's the basis for this claim? Any proof, studies, anything?
Generally leaders are not going to fire each other.
So sometimes a doomed strategy will be pursued far longer than you'd expect, barring some board or activist intervention.
Some of it is self interest, some of it is hubris.. but also one can easily blame a bad run on some broader economic situation, specific competitor actions, or right strategy with wrong team (so fire the team) .. this works for a while until it doesn't.
Seriously, that severance is awesome. Of all the tech workers struggling, the ones from companies big enough to throw 4+ mo severance packages are not the ones I am worried about. Any smaller company your severance is a pat on the back.
Yes, as soon as you have a regular paycheck you should start building an emergency fund. This should be taught to everyone in high school (or earlier) but we don't do it, among many other "life skills" that we do not teach because they aren't on the state standardized tests.
Yep, this is what I do. Individual responsibility is an unpopular idea these days but the way I look at it, I am the one who is ultimately in charge of my family's wellbeing. That is far too important to entrust to a corporation's generosity or the whims of lawmakers.
And it leads directly into the US being richer than all but tiny petro-states and growing faster than all of its peers. Fair enough if that's not what you want but there are tradeoffs.
Lets see how much it remains left if US keeps offshoring all the stuff, followed by imposing import bans after those countries become good enough to start taking over economy sectors.
The average tech worker really should not have to go into any debt for even a year long hiatus from their typically well paying job. All that is required is living like a typical American and saving your salary. I honestly don't see how anyone can claim tech workers are not compensated for the volatility inherent in the industry.
Early-in-career folks are more vulnerable. Even before major family/life costs start to play a role, it can be difficult to save enough for a safety net after moving to an apartment (even w/ roommates) from college & managing student debt, etc. I remember it took me a couple of years of stability to not feel at risk.
Yea, that's fair. I'm just being critical of the 'facade' (said with less ire than it sounds). The size is no surprise, in or out. I'll be mildly merciful - not all his doing
That’s actually a pretty low salary but I just looked up their revenue numbers and it’s not looking that hot. They are also hemorrhaging cash this year. His salary and the performance of the company were probably a good foreshadowing of the layoffs
> His salary and the performance of the company were probably a good foreshadowing of the layoffs
As is standard. My recommendation to anyone that works in a corporate environment is that if you want to know whether the company will be at risk of layoffs in the future, become good friends with someone in sales. When the sales leads and activity start to drop (or growth rate starts to slow), you can usually be assured that layoffs will eventually follow. In my experience the sales folks were always the first to clean up their resumes and start the job hunt because they knew what was coming.
I still hate the fact that people can borrow money against a stock. Stock should be sold, period. That is how the market sets a price for stock, through the volume of it being sold and bought. By allowing people to borrow against a stock, let's them get the money for the stock while still holding it. That artificially increases the stock price and value.
> Drew Houston's total compensation for the year in 2023 was $1.5M
That is insanely low for the CEO of a public company of Dropbox's size. But I suspect he owned a lot of shares in the company so when it went public, so he doesn't need salary, it is just a rounding error in terms of his wealth.
I always wonder what gives these people the drive to continue. Maybe I’m lazy and lacking vision but if I were worth 2B, I don’t think I would go to the office every day just to get accused of mismanagement when I have to lay people off. I would take my yacht to the Caribbean and slack off.
People enjoy having a purpose and a mission in life. Leading a team of people that you put together, in order to improve a project you started, and knowing that doing so will improve both your lives and theirs, is incredibly fulfilling. Even if the day-to-day is full of hardships. In fact, working to overcome hardship is one of the primary source of meaning in life.
Kids are another example. They're expensive, they're annoying, they ruin your health, they take up your free time, they consume all your resources, and they're inherently needy, selfish, and largely incapable of being grateful. Yet raising kids can be profoundly rewarding and fulfilling, in part because of the hardships, and in part because you're contributing to something bigger than just yourself, which is another crucial ingredient of meaning.
Sitting around on a yacht doing nothing is not so different than moving into your parents' basement and doing nothing, save with better scenery. It's the kind of thing you crave when you're burned out, overworked, and jaded, the same way we crave sleep when we're tired and food when we're hungry. It's a reaction to a state of being. But we only desire sleep until rested and we tire of eating once we're sated.
If you ever get to your tropical yacht vacation you may find that, in much the same way, what you thought was a permanent desire was only a temporary one.
Dreaming of winning the lottery and Going On Permanent Yacht Vacation is precisely the difference between being a worn out low-level worker and being a high-level executive who has all their needs met (or at least has the resources to have them met). With the latter you can have enough resources for you next ten generations and still go to work and optimize shareholder profits while thinking to yourself that you are serving a higher purpose.
Type A people who become CEOs don't dream of sitting around on yachts.
Some might be driven by money, but at a certain level it probably switches to a sense of responsibility, but also, it's intoxicating to be at the top where you don't really have to work in the same way, but get to direct what happens. People enjoy power. People enjoy the secrets of what happens at the top. People enjoy the recognition (within their peer group). etc...
People who have mission and vision of the future are entrepreneurs because they want to solve problems and help other people not because they want to become rich and sail with yacht.
Listen to Snapchat's founder and CEO Evan Spiegel[0] why he didn't sell to Facebook for $3 billion. He even didn't sell to Google which offered 10x more ($30bn) for Snapchat.
To clarify, I actually kind of get it for businesses that actually have a important mission (using my definition of important of course). If you’re working on curing cancer, I would understand that a CEO doesn’t want to leave even if he’s set for life. I just don’t see entertainment and service businesses like Snapchat or Dropbox as actually meaningful endeavors. To me they are nice to have and something I would work at for money, but I wouldn’t feel like I’m making the world a better place. Maybe that’s exactly the thing I was misunderstanding about those CEOs, they truly think their work is needed and important for the world.
I don't have billions and I don't manage people (I've been voluntold to manage 1 person a few times, and I'd rather that not happen again), but I have enough that I don't need to work for economic reasons.
I'm working part time anyway, because it keeps me busy and interacting with people outside my home, and it gives me access to interesting real world problems that I can't really access as an individual person on the interwebs. Having other people depend on me to get things done provides motivation to keep moving on things that I can't seem to manage on my personal projects.
If I liked the kind of organizational management work a CEO does and I was good at it, I'd probably get roped into being a CEO.
One hardly needs $2B to slack off on a boat in the Caribbean… many people do so on surprisingly nice ~30 foot sailboats you can buy with a few months work at minimum wage, and wild seafood is free
I see a lot of people that say “If I won the lottery I’d….” and then describe something they could definitely do without winning the lottery… which makes me think they still would not actually do so if they won
Sure there is- opportunity cost, the real dangers and skills required to operate a vessel at sea, etc. You can pay a professional crew to do everything for you, but then you'll probably feel pretty useless, and be looked down upon by the people you meet along your journey that do it themselves.
The sea doesn't care how rich you are, and being a helpless dependent is boring and infantilizing no matter how big your boat - and you don't develop skills without taking risks.
Ultimately, I don't think people are often that conscious of their real goals and motivations. It's easy to say you have no choices in life because of financial and time constraints, but I don't think those are the real reasons most people choose to do or not do things.
I can understand wanting to continue doing something. What I don't understand is why instead of putting their time and now considerable wealth into more philanthropic pursuits, they decide to continue increasing their wealth, often at the expense of other, less fortunate people.
Ultimately he mentions that being CEO is a rare opportunity to play a more infinite game and practice the craft of getting really good at something that doesn't have an end
Yeah I figure a long shot deep tech project would be better suited to a billionaire. Little to no accountability for the first decade or so, and loads of glory if it somehow works out.
I have a slightly different version of this. There are some other replies here to the effect of "people like to have a purpose in life". But surely "helping people share files" or whatever the Dropbox "mission" is can't be that inspiring, right? I mean, the point of starting a company like that is to make those billions. Maybe to do it successfully you need to delude yourself into thinking that mission is really important, I don't know.
But for me, if I had that kind of business success I'd cash out and go do something that feels actually important. Go get a PhD and take a crack at curing some obscure disease, or setting up a Dyson swarm around the sun, or making a great work of art, or thinking about how to improve elementary education a la Khan Academy; something like that. Then you get to have a real purpose and work toward something that most people don't just by virtue of the fact that it doesn't pay well enough, and you still get to spend plenty of time on your yacht!
The instinct to acquire resources does not have a limit. When homo sapiens evolved, such a limit would not have been a useful adaptation. There were no billionaires then.
Also it's nice to boss people around, probably for the same reason.
You and lots of people say would do something or other. I submit that it's different when you're actually in that position, as opposed to imagining it. Lots of us imagine we're going to go to the gym for years, and give up after a month or two.
Some people do exactly that but it's rare that someone will simultaneously have the drive to do something that will generate them billions of dollars and also be willing or able to just stop working at that point.
Also remember once you have that much money a lot of things become basically free, both figuratively ($100,000 to a billionaire is nothing) and literally (comped rooms, gifts, etc for basically every event and your company(ies) end up footing the bill for most of your expenses).
There's plenty of people who make $5-50 million in a windfall and are never heard from again.
True, it’s probably that this drive is what allowed them to be billionaires in the first place.
Just to rant a bit more: the Wordpress situation makes this point even more crazy to me. Mullenweg has about 400m and instead of retiring and enjoying life, he’s arguing with anonymous users on Hacker News. No offense against hacker news but defending my life decisions on HN isn’t exactly the first thing I would do if I could do everything I ever wanted. Like, go buy a plane and take flying lessons, or go scuba diving? Nah, I’d rather justify myself on the internet.
I expect a lot of people with that kind of money can't enjoy life as it disconnects them from everyone else. Your friends can't afford to do those things with you, so you either end up buying friends – with all the disillusionment that goes with that – or you turn away from people and get your fix trolling computers instead.
I got from the other comments that he got the 2B by owning part of the now very valuable company, not by working for a salary. Assuming he picked a good enough successor that didn’t completely ruin Dropbox, he should still have pretty much the same net worth without any work, no?
It’s not “ridiculously low.” Before the layoff they were 2700 people. That’s like a VP2 at most large tech companies and 1.5M total comp is spot on for that level.
Nope, MBAs have to learn exponential growth is impossible to accomplish forever.
Companies should be managed to be profitable, while paying employees and business expenses.
Anything other is a pipe dream that eventually blows up, but since only employees suffer while the MBA guys go to become CEO of yet another adventure, who cares. /s
The myth of exponential growth is not that companies can't grow exponentially forever (since that's the case for most companies) but rather that the valuation of these companies depends on exponential growth (it does not). Most public companies in the United states do not experience the exponential growth many tech startups do, but do perfectly well for themselves, their customers, and their employees.
No one is pushing for exponential growth. If a company wants to stop, declare a dividend, and be done with it, and let investors choose a new rodeo.
Except that isn't what happens, instead every year a new goal that has to be X % higher is set, and when expectations are not met, the employees are the ones landing on the street for stupid values of X%.
The one signing off on X% might even get a bonus for doing that, and enjoy some Bahamas vacations.
In tech sure, but in the market, many companies simply return dividends. Lots of mining stocks, retailers, commodity producers, etc don't experience exponential growth
I have an MBA and am not a CEO. I'm probably better at developing software than you, too.
But, I do get a chuckle out of what you believe is a "diss," when you're actually stating that MBA holders will not only do better in life, but they'll also control your fate.
Public company CEO pay is almost always paid by shareholders not by the company itself.
It's so misleading that these "CEO compensation is 100x employee pay" stats always get kicked around like it is an apples to apples comparison. It's not.
CEO's get paid in stock which they need to redeem from shareholders. Employees get paid with cash which them redeem from the company's checking account. They are different sources of money.
It's so annoying that this keeps getting repeated, on and on and on. It's totally disingenuous.
The company's checking account also belongs to the shareholders, albeit indirectly.
The remarkable thing is how readily shareholders will accept narratives which give the CEO very large amounts of compensation. The notorious $50bn is a high mark: https://www.forbes.com/sites/antoniopequenoiv/2024/06/13/tes... - but that is very much taking value away from shareholders and handing it to the CEO in huge amounts.
Can pretty quickly see that the CEO comp # in question is not the stock. Houston sold many times more than $1.5m in stock in 2023. The $1.5m is likely direct cash and services.
Yes, but we can all agree that stock/$ is pretty fungible and can be exchanged for goods and services in pretty much the same way. So effectively, it is apples to apples.
It's not any industry anywhere. Any layoff thread on HN is people saying what they wish things were but framing it as "this is how everyone else does it this one company is being greedy" when it's not the case 99% of the time.
When I was laid off in 2023, my mom and aunt told me to go on Medicaid. I thought it was a bit ridiculous since I had already made well above the poverty line, and was planning on still pulling in a substantial amount in the same year despite the lay off (I was laid off in January). I was going to pay several thousand a month for COBRA, and I thought my mom and aunt were crazy, since they are the sort to claim everyone's using welfare (my aunt retired early and is on medicaid, since her income is zero, so I guess she has some evidence to support her claim).
Anyway, so I did look into it mainly for the 'I told you so' aspect, to 'prove' to her that the social safety net did not exist as she imagined it.
However, to my surprise, it did, and within an hour of filling in the form online, I got free medicaid for my kids, and highly subsidized marketplace plans for my wife and I. In my state, medicaid eligibility is based on expected income / week. According to the man on the line from the state, even if I did end up making more, since my expected income was $0 (being unemployed), I still qualified! My wife's premium / month was like $100 (she was pregnant so qualified for more).
I did tell several colleagues about this, but they didn't believe me and forked over thousands of dollars.
In my state, medicaid is superior to my old PPO plan. For one, there is no co-pay and my daughter ended up needing major orthopedic intervention (severed finger) and we paid $0 out of a total cost of $150k. Although you're assigned a doctor, it's still essentially a PPO plan (you can see whomever you want whenever you wanted, so we stuck with our old doctors).
So, please avail yourself of the very safety net you pay for. COBRA is basically always a bad deal. There is almost certainly a subsidized plan out there for you. There's a pervasive myth that the social safety net doesn't exist in the USA and I almost lost $10k (or more with my daughter's incident) because I didn't do the obvious. I also learned that should I ever want to leave my job to start a business, I honestly really don't need to worry about health insurance.
> COBRA is the single largest expense for departing employees.
Life pro tip: Do not use COBRA!!!!! It is almost always much, much cheaper to find an ACA compliant healthcare plan on your state's health insurance market. For one thing the plans will often be cheaper (though with fewer features). For another ACA plans qualify for tax credits, etc and COBRA doesn't.
When I got laid off I made one of the worst financial mistakes of my life keeping my employer's high-deductible plan via COBRA. I stupidly figured it had to somehow still work out to be cheaper than shopping for private insurance. Boy was I wrong! Between the "high deductible" part and the fact the plan wasn't able to qualify for tax credits I overpaid my medical expenses by about $10,000 over the course of a year. Had I gone with even a "bronze" level ACA compliant plan that would have been cash in my pocket that would have helped out a lot while I was looking for work.
The big reason was my medication was like $800/mo. And on my employer's plan once I hit my $3500 deductible it went to $0/mo. This wasn't a problem when my former employer picked up most of the insurance premium for my high deductible plan but with COBRA you are paying the entire premium! And for my use case, medication was my top medical expense so I was paying a hefty premium for a fancy health plan that didn't actually cover my expenses.
A "regular deductible" ACA plan would have made much more sense in my unemployed scenario as the premium was not only lower but the medication was generic and would have only been like a $23 copay!
Always, always bust out Excel and compare the full cost of healthcare on different plans. Compute the total cost of your medications, how & when you'll hit things like your deductible, what tax credits & deductions apply, etc. What made rational financial sense while employed might not make sense when unemployed or buying your own health plan. But you have to find out for yourself. Rarely does it make sense to continue paying your employers health plan via COBRA. After loosing your job you have like a 30 day window to switch plans before you will be locked into your COBRA plan for the remainder of the year -- do not dilly dally around, figure it out now!
Forget ACA compliant health plans. When I was laid off, since my income / week was $0 (Oregon), we just got medicaid for my kids, and pregnant wife, and I paid an extremely modest amount for a solid plan. There is no reason to use COBRA. It's a relic and probably should be done away with.
Please look at your individual situation and don't take this suggestion blindly. If you've already contributed significantly to your deductible or out-of-pocket maximum it can definitely make sense to continue with COBRA.
Also you can game the COBRA enrollment window. You have 60 days from your loss of coverage to elect COBRA and once you elect COBRA you have another 45 days to submit payment. You can elect on the 59th/60th day and then pay 45 days later if you ended up needing the coverage. If you don't need the coverage don't pay.
Please check though, because my kids qualified for medicaid despite my six-figure income. The state of Oregon qualifies by week, so even if you made $10 million / year, if your expected income in the week is $0, you qualify for that week (yes, I literally asked them this question, and he said yes, that is how it works). According to our DHS, there is no upper limit on yearly income that would mandate a clawback of benefits received[1] . And in Oregon at least, OHP is accepted everywhere, and is usually better than the platinum plans (no payments taken from users, ever)
[1] As another example, I asked if I didn't work Jan - Nov, and then made $10 million in December, would my kids qualify for mediacid Jan - Nov, and he said yes.
Arguably from what I've seen it is TOO random or non-performance based.
Some combination of personal dislike and unfamiliarity.
The people making the cuts are not line managers and are sometimes given very short amount of time to make their cut list. So "oh I know that person" stays vs "I have no idea what they do / they asked me a pointed question in a meeting once" goes.
I've been laid off twice, neither time has been performance based.
once i was on a team of 2 ICs and a Manager - only the manager stayed - the company is now about to fold. Other time i was let go as part of the entire US arm
Yes, most layoffs I've seen in my career are of the "mass layoff" variety, and these are generally far from being performance based.
There's just too many people, the decision making is too quick, at too high a level.. and more driven by cost / future strategy (so which teams to cut deeper).
This often does happen along with layoffs when a company is in real trouble. A problem of silicon valley culture is that you basically can't fire anyone for underperformance, so you need to have these sorts of layoffs as a prophylactic measure to cull the heard. So that means you get a cycle of "overhiring" followed by "layoffs" and that is working exactly as intended.
California is at will, you can fire anyone for anything or even nothing. I'm yet to see poor performing executives take themselves out before they take out the people that actually create value. You don't need to have layoffs, you need better leaders, and they're the last ones to get culled, usually running off with bonuses for under-performance and lousy work.
This is a joke, right?
If a company is underperforming, then the underperformers are the first to go.
Market economies require efficiency. Capital flows in the direction of success.
Impeding this flow with regulation is a great way to create a malfunctioning economy.
What you are referring to is called rightsizing and it's taught in business schools, but almost never implemented well. I would guess it's because it takes to long to figure out who's weak and who's not and they are in a hurry to cut costs.
When layoffs are random, it engenders a profound sense of betrayal among those who have diligently gone the extra mile. It severs ties and creates a chilling effect, dampening the morale of those who remain.
Employees, acutely aware that their efforts might be disregarded in the next round of cuts, become increasingly disincentivized to exceed expectations. The result is a workforce more focused on survival than excellence, fostering an environment where mediocrity thrives.
Request: Any tech-recruiters on here who can validate this? I spent a single month in June job hunting (mid-level SWE, DE roles) and it was terrible. Hundreds of applicants per position. It felt like being a fresh-grad again. But that's just my anecdata
We’ve heard from many of you that our organizational structure has become overly complex, with excess layers of management slowing us down.
So we're making more significant cuts in areas where we're over-invested or underperforming while designing a flatter, more efficient team structure overall.
So a lot of middle management getting let go then?
i wish they would focus on what the users wants instead of making their client more and more invasive, and when I complain about it just explaining that they have a lot of privacy controls and I shouldn’t worry about their invasive client.
i would love to use dropbox over icloud, but I just want a drive that works and a way to turn off all their weird features.
I don’t know how but over time all the “new fangled” tech companies have the same approach to hiring. They just keep growing headcount as its own workstream. Google started it I think, their HR just interviews and grabs the talent without a need. Matching employees to a role that already got hired to a company is just insane. That is the reason why I never interview with anyone that wants to do a generic hire. These HR folks are purely assessed on how many they hire and so they keep hiring.
This just makes me respect the old school processes that apple and nvidia follow that much more. They are the best run companies in tech
Meanwhile the S&P500 is up _23%_ this year, so all of this talk of "difficult economic times", "headwinds" and all the rest, is bullshit, plain and simple.
What the tech mass layoffs have shown is that it's good for the share price and good for increasing profits (not that there wasn't decent profits before, but you know the one thing that's better than profits? more profits!)
Every large company has to divert money away from labor so they can spend $B on the AI arms race (Dropbox is now "AI powered" of course).
It's like how in the US we lament how the government can't afford to take proper care of its citizens (you know, basic things like universal healthcare, education, etc.) while spending $750B a year on the military.
It was never perfect by a long stretch, but the past 10 years I've progressively gone from disillusionment to disgust with the tech industry in a broad sense. They're no different than the oil and railroad tycoons of the late 19th century, just with better window dressing.
Larry Page and Sergey Brin control over 51% of all votes at Google. Similarly, Zuckerberg controls over 60% of the votes at Facebook.
I took a look at https://www.opensecrets.org/ and surprise surprise, Google and Facebook were major election fund contributors to Silicon Valley representatives, like Ro Khanna. This tells me who really holds power.
It's like how in the US we lament how the government can't afford to take proper care of its citizens (you know, basic things like universal healthcare, education, etc.) while spending $750B a year on the military.
It's not the government can't afford, it's that we aren't willing to allocate. The US is an incredibly wealthy country after all. We can unlock even more wealth if there's political will to fix how we do urban planning.
Also, we have military commitments around the world that underpins the global order. Decades of underinvestment in our defense industrial base and unneeded military adventures had led us to be woefully underprepared for our current security environment.
That last paragraph could have been taken directly out of the defense contractor lobbyist handbook. Congratulations.
Seriously -- we don't have military commitments to "underpin the global order". We have military commitments to "protect our political and economic interests" -- and who do those benefit? The American people? Nah, not really. But the American people are the ones footing the bill for it, choosing to reduce our own quality of life in order to exert power over other nations (and invade them at will).
Seriously -- we don't have military commitments to "underpin the global order". We have military commitments to "protect our political and economic interests" -- and who do those benefit? The American people? Nah, not really. But the American people are the ones footing the bill for it, choosing to reduce our own quality of life in order to exert power over other nations (and invade them at will).
Of course, it's our political and economic interests. We're a hegemony. This is not controversial. Unless you want China and Russia, the other two nations on the permanent security council, deciding what goes. That would be not for the benefit of the American people, but for their benefit.
Beside, it's not like there's a lack of spending in healthcare. Our healthcare spending is very high. According to wikipedia, it's something like nearly 18% of GDP.[1]
Universal healthcare will probably reduce how much money we spend on healthcare and making it affordable for everyone while improving health outcome.
It's a false dichotomy between military spending and our domestic needs, and the government is always in charge. You should read about the last supper and the peace dividend. The government downsized spending after the cold war and now we have a less robust defense industrial base. Some form of downsizing is inevitable especially if we want to reap the peace dividend but it's clear that we had gone too far in the way we downsized.
You are welcome to start a business that competes with Apple/Alphabet/Microsoft/Amazon, and see if you can survive without raising prices or making bets that may not succeed and cause you to fire people.
Makes sense and was only a matter of time considering it has essentially no revenue growth to date this year and Non-GAAP margins in the low-to-mid 30's %. With near-0% revenue growth, investors will expect a SaaS company to post 40%+ margins.
That's quite unlikely. If Dropbox could save a decent amount of their engineering effort using LLMs with 20% less people, then they could also increase their engineering effort by a decent amount using LLMs and keeping the same workforce. Assuming the team aren't completely useless, being able to go faster would be significantly more valuable than any cost saving made here.
Incredibly disappointing, but not surprising. Dropbox is no longer in its growth phase, and needs to settle into maintenance mode - enjoying a steady stream of revenue while continuously optimizing expenses, with a bit set aside for R&D to try and find the next big growth opportunity. Severance packages look really good, with the caveat that these figures really should be _the default_ in Corporate America at this point, like our EU peers.
I just wish the language in the announcement reflected this reality. Instead, it feels like a lot of desperation measures from current tech companies: overly optimistic to the point of naively dismissing or ignoring reality, and believing that if we just keep building then we’ll continue to grow forever.
Dropbox was where I first encountered the infantilization of the workplace, with animated emojis all over your biannual performance review. It was a shock, having come from a real company run by adults. Now everyone thinks this is normal, at least at companies that use Slack where 40% of the traffic is animated emojis.
I've never been a big fan of any such language, regardless of layoff context. Do enough people prefer it that it's actually a net win for business by way of improved morale or whatever? I wonder if it's been seriously studied.
Then again, I'm also of the mind that email addresses (or whatever other contact methods) ought to belong to functional areas/positions rather than to people (other than for person-specific topics such as time off, personal development, etc.) so turnover doesn't lead to questions of where to send questions/requests. I assume this is an unusually inhumane outlook!
I agree it's actually a well crafted layoff announcement. I wouldn't even faulting for using Dropboxers. If layoffs have to happen there are much worse ways of announcing and implementing them than this. Still very unpleasant if you're affected... (been there...)
It's clear they are preparing for an acquisition. They are profitable with great gross margins and cash in the bank. With 20% workforce reduction they are going to be very attractive to the salesforce of the world.
This is a stack ranking layoff. They will fill the roles with new roles to teams they believe are more vital to achieving company goals. Pretty much every tech company has operated this way the last couple years. They’ve fired 10-20% and have replaced all those heads pretty much across the board.
and then after the first full clock cycle, middle managers are hiring people to fire them, to keep their core dev team intact so that it can solve problems that take longer than 90 days
Dropbox makes over 600 M per quarter and about $2.53B per year. They dont need to do layoffs. This is a choice to desctroy jobs to temporarily enrich shareholders to the detriment of the company itself. Classic short-term decision making. https://stockanalysis.com/stocks/dbx/revenue/
How is it to the detriment of the company?
I've been a dropbox subscriber I think since they launched. Over the years they've added some nice features here and there, but I feel like at this point they could scale all the way back to server admins and sustaining engineering and be perfectly fine. This is another case of I can't imaging what all of those people actually DO day to day.
Financially, perhaps not, but maybe the product is now done? I mean, what more can you really add to the service at this point? There is still work to do with maintenance, support, etc. but that doesn't require the same level of employment as when you are still building.
Kind of crazy that Dropbox has 2600 employees no? What do they all do? Isn't Dropbox finished?
I guess there's a very small number maintaining the core Dropbox stuff and most of them are working on speculative projects to increase revenue (e.g. this Dash thing they mentioned)?
No, the HN consensus is they are massive geniuses for moving out of AWS. Nobody here ever accounts for the extra datacenter, hardware platform, hardware ops, infrastructure ops, etc.
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.
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.
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.
> 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.
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.
> 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.
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.
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.
> 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.
> 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?
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.
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.
> 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)
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.
> 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.
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
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.
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?
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?
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
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.
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.
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.
> 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.
> 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.
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.
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.
> 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?
Unpopular opinion, but I don't understand this type of comment. It sounds like people want executives to get some kind of punishment or pain as a consequence of laying people off.
But what would that even look like? A fine? That would probably make no practical difference, and would discourage them from making changes that need to be made. Fire them? Then you would probably get a worse decision maker in the driver seat going forward, who also didn't learn from experience of going through layoffs.
Layoffs are awful. They affect lives and families deeply. But all businesses don't go up and to the right forever. Reductions are a necessary part of running competitive companies.
> Iwata ran the Kyoto, Japan-based video game company [Nintendo] from 2002 until his death in 2015. To avoid layoffs, Iwata took a 50% pay cut to help pay for employee salaries, saying a fully-staffed Nintendo would have a better chance of rebounding. [0]
By taking that pay cut, how many employees could Nintendo keep that would otherwise have been fired? 5? 20? Certainly not in the hundreds or thousands. This just seems like virtue signalling.
Edit: to expand on my point re virtue signalling: the article states the CEO took a salary cut, not total compensation (and it doesn’t elaborate on the value of the cut). Salary is a small fraction of CEO total compensation - the bulk of which is stock based, and even in the event that stock grants were also cut, the CEO surely already had significant stock. Cutting a relatively small component of compensation in order to boost the stock price which disproportionately adds to the CEO’s personal wealth seems like virtue signalling to me. If the CEO said “shareholders be damned, morale and culture are all that matters in the long run, no layoffs etc etc” that would seem more meaningful.
Optics matter. When a CEO approves mass layoffs, and ALSO approves a 60% salary increase, I can only conclude that the CEO is nothing but self-interested. Rewarding yourself for firing a statistically significant percentage of your company SHOULD indicate failure, not success.
I feel like this would be the few times where virtue signaling is probably a benefit. It can make all the people in the company feel like the leader is on their side, and maybe make the employees less resentful and be more productive.
In 2021, the average S&P 500 CEO made 324 times what their company's average worker made [0]. The widest gap was at Amazon, with Bezos making over six thousand times as much as the average worker at his company. The report is from a few years ago, since then the gap has increased further. So yes, many companies could trivially retain hundreds if not thousands of workers simply by cutting the CEO's pay.
Taking a massive pay cut isn't "virtue", it's a direct and measurable sacrifice. Just because you don't agree with the position or outcome doesn't make it "virtue", I'd wish people stop using that word for things they disagree with.
5 or 20 workers (and their families) who don't get jerked around for stuff way outside their control is an absolute win.
Right now, there is no actual downside for executives. Just less upside. Did they earn XX Million this year or XXX Million. Some tangible downside would be nice.
I mean, heck, why aren't they fired? And really, it's more then middle management where that'd make a huge difference. If bad performance led to actual shakeups in the entrenched middle management, we might actually see business practices change rather than continue on through the established fiefdoms and petty corporate politics.
If the CEO taking a paycut materially reduces the size of what would otherwise be a large layoff on the basis if reduced cost savings, the CEO was way overpaid to start with. (And it probably doesn't change the number of people the firm can usefully employ under changed conditions, even if it provides cost savings, because the latter is based on whether employing them makes more money than it costs, to which external cost savings are probably mostly irrelevant.)
It should be added that layoffs are not commonplace in Japan. What you'll see instead are bonus cuts and salary reductions (at most 20 percent). To do US style layoffs you would need to show that the affected department was directly involved in a line of business the company has abandoned. If this isn't the case the employees stand a good chance of successfully suing the company in court. And then there's the reputational damage which would be considerable in a country where lifetime employment is valued.
In other words this kind of behavior wouldn't be viewed as all that surprising locally.
Mass layoffs -- unless the company is actually tanking and on its last leg, which isn't the case with any of the tech companies who have been doing this recently -- cause the share price to rise. CEO pay, or at least bonuses, are often tied to the share price.
To put salt in the wound, my understanding is the research on elective layoffs (ones that aren't forced by circumstances) indicates the outcomes are mixed at best, leaning negative.
So all this crap is just cargo-culting our current management paradigm, and/or execs cooperating to suppress wages and weaken labor, which had gotten a bit too uppity after Covid (that's one thing waves of layoffs like this do accomplish).
Probably: just leave out the full-of-shit sentence...
There's an Indonesian joke based on the word "responsibility" which is "tanggung jawab". "Tanggung" in this context means to carry the consequences, and "jawab" is to answer. One can say to a friend "We have to share this responsibility. I'll do the answering, and you'll do the carrying of the consequences."
I think a start would be to stop saying the phrase “I take full responsibility for this decision” if you aren’t also publicly taking a pay cut.
There’s no need for a CEO to bring themselves and their feelings into the conversation. It’s this weird attempt at empathy that fails, because the CEO isn’t making any sacrifices.
Just say that there are layoffs. Most rational people who have been in any business for more than a few years recognize them as an unfortunate part of the business cycle.
Agreed. But just say that. No need to pretend taking responsibility, which is defined as facing consequences when things go bad.
“As CEO, I’m truly sorry to those impacted. But I strongly believe that this change is what is needed now to make sure Dropbox can thrive in the future.”
Simple: they sure love to talk a big game about responsibilities and taking responsibilities. Until it's time to actually do it. For the good of the company of course (if the company is in such dire straits, as the most highly paid employee - and probably not the hardest working one - why don't you take a big pay cut? For the good of the company of course).
> It sounds like people want executives to get some kind of punishment or pain as a consequence of laying people off.
No - as a consequence of poorly planning cost controls. It's not that the people don't need to be laid off for the health of the company, but that the executives who made the bad decisions don't get the boot along with them, in favor of more cautious or frugal leaders.
Yeah I'm not sure people with compensation well into the millions get to go "haha, sorry, still figuring this out!"
Cool, can we pay you intern wages then?
[EDIT] To make this a bit more substantive: I think this is a sign both that we need to stop with this whole professional-managerial-class horse-shit, promote people who know how to do the actual work of the business, and reduce exec wages because the job's simply not all that damn special and the comp shouldn't be so high that only godlike-perfect performance could possibly justify it, because in truth nobody's that good at it.
Step one of this would be reducing M&A activity (hellooooo antitrust enforcement) and reigning in the power of finance, since letting Wall Street suits put their HBS frat brothers in charge of everything is at the heart of why this stuff's how it is.
Preach! The job is straightforward - lot of these decisions they make are very clearly articulated by LLMs. We need more businesses, more competition, not bigger businesses.
I think it's an outlet for general frustration with the justification for high executive compensation (and returns on capital, for that matter) often being "they have much more responsibility and risk" when the actual downside is typically nonexistent, and even if there are consequences, the outcome is something like "LOL still richer than any ten of you combined will ever be", i.e. the "risk" is all fake.
Perhaps you've misinterpreted that statement? It is the board that takes on greater risk with executives as compared to other employees. The executives are given the keys to the kingdom, which means only an exceedingly small group of trusted individuals can be considered for the job. By the transitive properties of supply and demand, when supply is limited, price goes up.
The thing is, high executives have become a self-perpetuating class entrenched in corporate boards, this is the reason CEOs comoensation keeps skyrocketing, not supply and demand. And this entrenchment obviously also stifles accountability.
How does this self-perpetuating entrenchment not become a factor in what establishes the supply and demand, instead managing to exist as something off to the side?
Why do people understand this phrase "taking responsibility" as some kind of admitting of fault? Maybe I'm missing something, but it seems neutral and could even be referring to positive future outcomes for the company.
Because the context is that 20% of their employees are now unemployed. The tone of the letter is also "this is a hard but necessary choice" and not "this is great news for dropbox!"
> As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change.
I think Houston being a cofounder means the financial picture looks different. Last year he made $1.5M in total comp. Which is a lot in absolute terms, but cutting his pay to zero would only allow keeping ~6 of those laid off. OTOH, he owns 25% of a $9B company. His salary is a rounding error compared to the performance of the stock.
Not to be an apologist, but I bet Drew really does feel responsible. He’s not professional management, and he always acted like Dropbox was his kid, at least from what I saw working there. I’m sure this feels shitty to him, though it’s obviously worse for the people laid off.
True - it means he could transfer, say, a billion dollars worth of stock to the affected employees and still be a billionaire. If he actually felt all that bad about it, of course.
Taking a hit on their giant salary seems completely reasonable to me. Having skin in the game makes people perform better in all sorts of cases, and I don't see why a CEO would be different.
Do you also object to sales reps or athletes making less money after a long period of performing poorly?
Yeah that opinion is unpopular because it's deeply stupid.
“you would probably get a worse decision maker in the driver seat going forward, who also didn't learn from experience of going through layoffs” or you would maybe get a better decision maker who didn't have to layoff — or hire unnecessary — workers in the first place? Ridiculous speculation.
Responsibility without consequences just means failing upward. That's why we have a gilded executive class of people who are barely qualified to run a local Taco Bell franchise.
People come in two flavors: conflict theorists and mistake theorists.
Conflict theorists think that every event is a result of power struggler. So if someone gets hurt, someone must be punished for that.
Mistake theorists think that the world is complex and sometimes bad stuff happens because most people operate with good intentions most of the time. Often, that means no punishment needs to be metted out.
To mistake theorists, conflict theorists look like ideological blood thirsty savages. To conflict theorists, mistake theorists look like enemy troops.
This is a gross oversimplification but it always shocks me to see how much more conflict theorists there are on hn now than before. So many comments here blaming the CEO or capitalism, most of which are going off extremely scant information.
> But what would that even look like? A fine? That would probably make no practical difference, and would discourage them from making changes that need to be made. Fire them? Then you would probably get a worse decision maker in the driver seat going forward, who also didn't learn from experience of going through layoffs.
Well they're the one asking to "take responsibility" here, the fact that they claim responsibility yet nothing happens is exactly why people don't like this phrasing.
Also who the fuck else can be responsible anyways ? The cook ? The guy who mops the fucking floor ?
yeah, taking a personal financial hit on this would go some way to at least pretend to actually have tried preventing it. Not sure about this particular CEO's salary, but I wouldn't be surprised if you couldn't finance a few engineers' salaries by cutting the CEO's, without it even hurting very much.
Not saying it's enough, not saying that's the only way, but I find it peculiar that this seems to be unthinkable.
Why can't the executive taking responsibility also take a pay cut and tighten their belt the way they expect the company to and the people who they've fired do?
> It sounds like people want executives to get some kind of punishment or pain as a consequence of laying people off
Um... yeah. Yeah, that's pretty much exactly what I want.
I used to work at a Dairy Queen. One dude there had been working there for a couple years. Unfortunately, one shift his drawer came up a dollar short. Our cutoff was 5 cents - a nickel - over or under. He was immediately terminated, of course.
He cost the company one dollar. A Dairy Queen cashier making minimum wage is held to a higher standard of accountability.
It's the grey goo of manager-speak. It rides both sides, but never truly picks one.
The other two options: blame employees(someone not you), or take some form of punishment as an individual.
I too do it sometimes, and I feel bad each time. I at least tell people what it is and that it's just the reality of the situation. I'm not gonna commit career suicide and jeopardize my family's livelihood but I also won't blame them. So I follow the meaningless middle road where the status quo mostly stays and we all at least learn from it.
Ah, you're only going to endanger the livelihood of your employees' families, most of whom have substantially less wealth than you. I bet the rest of your employees don't really care that you "feel bad."
The latter. If you can not manage the company correctly and it leads to the job losses of hundreds of people not to mention the millions in salary that was wasted by their poor planning then yes they should be immediately relieved and not allowed to run any other company. They are clearly incompetent.
Considering dropbox is not facing some economic recession outside of its control we can only blame the CEO's incompetence.
I don't really get why layoffs mean that the company was not managed correctly.
Let's say you believe you have an opportunity that will double the value of the company, with a 30% probability, or cost the company 10% of it's value. This means it has an expected value of +21%. This is pretty good, and exactly the sort of thing shareholders want from their management. So you increase headcount and pursue the opportunity.
In the 70% scenario when that doesn't work, you have to downsize. Failure is not just possible, it's probable. That doesn't mean that the CEO mismanaged...they may have, I don't know the Dropbox details. But in the scenario where they haven't mismanaged, what do you want? Do you want companies to never take these risks in the first place?
When they hire as part of the push for that 30% chance, are they telling them that they have a 70% chance of being laid-off if the bet doesn't pay out?
If it's "just a bet" and not mismanagement, then we should tell people that, shouldn't we?
The reality is that these bets are only bets for the people getting hired/laid off, and they don't even know they are betting in the first place. Even worse because we're not talking about simply losing money here. Losing a job is many times a life changing event in real people's lives. It's not like someone betting on a stock.
That's why there should be consequences for the ones making those decisions. They get the most rewards, but none of the punishment. How's that fair in any shape or form?
Most big tech companies did mass layoffs in the past few years. They are now fully recovered and posting record profits this week all with the same leadership. You are saying they are incompetent and someone else could have navigated this better?
It's always amazed me how much leeway and clemency leadership gets. I worked at a company that was always fairly intentional about their performance review process being a meat grinder, and they also did something that didn't look nearly dissimilar enough to good ole microsoft forced curve / stack ranking.
So if you were an IC and were on a project that failed (or even just didn't succeed enough), God help you. Many folks just quit when they saw a project going sideways, or tried to escape/transfer. Alternatively, people would report green statuses and hope someone else fell over first so they wouldn't be the root-cause.
Obviously this caused many problems. It was very hard to execute projects with lots of people or teams, and/or that took a long (>3mo) time. It came to a head when finally a major initiative missed another deadline "just barely" and it finally tripped circuit breakers and someone went in and did a full Inquisition. Yeah no the project was f'd and they basically just gave up ("pivoted") to an adjacent goal. Their official diagnosis/RCA was "people were too scared to report red, so everyone prettied up their status reports a bit, and that was compounded by each roll-up status report also prettying up the status.
Literally no leadership changes happened as a result of this. Then I got laid off. (Unrelated, just the big layoffs of 22. I was not directly involved in this, I was in big data and this was all happening in the main product infra stuff).
So yeah. Your project fails? Bye. But your f'd up performance grinder culture causes literally hundreds of people to behave so out-of-alignment with the actual company goals? Nah man stick around for 2 more years and leave at your leisure over some other petty squabble.
People make mistakes all the time, hopefully it's mistakes they learn from. You can't simply fire someone for being incompetent, unless it's so bad and beyond the pale.
> You can't simply fire someone for being incompetent
Lmao what? Outside of being absolutely skint and unable to make payroll, that's pretty much the only reason to fire someone (I mean other than misconduct, which is also a type of incompetence)
What if managing the company correctly requires hundreds of people losing their jobs?
I understand the anger in this scenario as employees, but I don’t think doing layoffs means leadership is clearly incompetent. Running a company is hard.
Doing layoffs definitely says something about the company’s values and current standing, but I don’t think it necessarily means the CEO is bad.
> What if managing the company correctly requires hundreds of people losing their jobs?
It occurs to me that there is no failure of performance a CEO can produce and be held responsible for. Are these CEOs really so irreplaceable that when they bet incorrectly they can't be replaced?
20% of employees have been fired. The CEO directly cited mismanagement as the cause. And yet, its impossible to fire him because "its a learning experience" or "think of the upside!".
A CEO being fired does not mean the company falls into the abyss. The company still exists and can hire a new CEO. I'm certain there are plenty of fools more than willing to risk the livelihoods of 20% of Dropbox's staff in exchange for a mansion in Miami.
The same consequences that a person lower down the ranks would have.
For example, if I lead a team that fails, the team will be disbanded and I will be either fired or demoted. (obviously if there are external factors I/we might be reprieved )
If the CEO leads an aggressive strategy that doesn't playout, they rarely get fired and certainly don't get demoted.
At a minimum, don't say "I'm taking responsibility" when you aren't facing any consequences whatsoever. If an executive wants to talk like that, they best put skin in the game. Otherwise, shut up.
If the company miscalculated, or mismanaged, to the degree that it suddenly has to cut 20% of its workforce in order to survive (or give shareholders what they want), then yeah, that's a pretty big mistake, and your head should be the first one to roll.
I bet you'd have a lot fewer CEOs calling for mass layoffs.
They should face the same consequences as the people they are firing. Lose their health insurance (or pay COBRA), have a few months' worth of expenses in the bank, have to find a new job, that kind of thing.
I suspect you wouldn't see these comments if CEO pay was on the same order of magnitude as the people who actually work at the companies they run. Watching someone treat your livelihood like a toy, while also being rewarded with more money than any person will ever need, is a bit grating.
I ask this myself. What is the point of both doing layoffs, and then also firing the CEO? That next person will probably be worse, won't have the learnings of the layoffs, and would probably increase chances of layoffs happening again.
putting an employee elected representative on the board
negotiating the layoffs and severance with employees (e.g., giving folks the opportunity to voluntarily take layoffs to reduce the number of involuntary layoffs).
Why is it a blunder? Do you think only poor CEOs face downturns or overhire?
And if a company hires too many people for a few years and then right-sizes, isn’t that better for the economy overall than if they simply stayed small the whole time? They still paid salaries for those years and added to the overall level of employment.
Do you want a system where CEOs are hesitant to hire? Or where they’re afraid to right-size the workforce and instead run the whole company out of business?
There’s literally zero logic to your position, just feelings and Monday morning quarterbacking.
Have you ever managed a complex, dynamic, changing system and found that the optimal size based on current conditions was 20% less than it was at some prior time?
Maybe he should, Meta's main product has peaked in their biggest markets, and his last massive bet went nowhere. He may not be the right person to lead the company at this point.
It's more fun now though, because instead of being tied to individual performance, you need to make sure you're on a product team that is going to survive the cuts.
Also prior to 2010 you wouldn’t be a senior engineer after 3 years of experience making $180k/yr. The staff and principal engineering roles paying <$100k are still super safe jobs
Good lord, the number of people defending the poor poor CEO is staggering. Do people have any idea of how much CEOs pay has skyrocketed in the last decades in the US?
I don't think people care about the CEO's compensation, I think its just getting old seeing these companies treat hours of labor as KPIs and not what labor actually is, people.
Mom and Pop businesses have to be careful when hiring because if they have to do layoffs they will be penalized by the office of unemployment insurance, and could make their rates soar to the point where they won't be able to hire again when things change. These consequences prevent mom and pop businesses and other mid size businesses from playing fast and loose with the people's livelihoods they provide. These tech companies budget in the severance, never even deal with the regulatory agencies that are meant to prevent this type of fast and loose hiring. I think companies like Dropbox and others need some sort of regulatory oversight in regards to how they hire and fire (if they are going to keep this pattern of hire and fire every cycle).
Crowded space, macro headwinds and too much middle management. It was difficult to foresee in 2020, but regarding the macro headwinds (elephant in the room) perhaps some billionaires should adjust their donation patterns:
Software is complicated. If you keep writing new functionality, maintaining it slows down your ability to write more new functionality. Eventually if you want to ship more new features and not wait an extraordinary amount of time to do so you need more people. This doesn't scale super well so your headcount grows non linearly.
Companies develop a lot of bespoke features used by a handful of their customers. It might not be obvious to the average person what all of those features are. Additionally just scaling software to continue running with more customers using the product is not a trivial task as well. Adding more servers or making servers beefier only works until it doesn't.
> I’m 22 and work on a 3-person team so it’s hard for me to imagine why a company would more than 4 or 5 total employees.
You're not wrong.
I've seen companies with less than 10 employees make around $9M ARR within the first 3 years, and some with around 50-100 employees that can't even reach 100K ARR.
The smaller your startup the more faster you can go, Dropbox's main issue is that they haven't implemented Founder Mode yet. I am willing to bet that that there are jobs in Dropbox that doesn't need to exist.
Lifetime licenses for cloud services is the worst deal imaginable. Even if you're not getting billed, you still cost the service money to continue using it. It's basically the same as a freemium model, except when you get rug pulled later, you're also out the money you paid on a "lifetime" license.
Plenty of examples of how long "lifetime" licenses really last in the modern era. See TeamViewer for example.
The same forces that enable high tech salaries, also make layoffs more likely.
- The market for talent is competitive. So companies bid up to the absolute max they can - The market for managers is also competitive. Creating dynamics that lead to larger teams and raises for team members - Companies allow things like remote work, which is a perk, but also has a lot of abuse in terms of how much work gets done
The end result is that if companies are spending their max, if there's a shock to the market/system etc they have to cut. You'd see this less if there was more padding/ less competitive pressure/lower salaries.
I think that's fine and the system is working as intended. People should be freed up to move to other roles where they can be productive. Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
The issue is not that you're getting fired. The issue is that healthcare is attached to employment, that makes zero sense. There should also be some reasonable government provided safety net so people can reskill/learn and move to other fields.
A somewhat sensible take, but the issue isn’t just healthcare. A lot of your life is based off of long-term, fixed cost cash flow. E.g. you can’t pay less on your mortgage just because you got fired. Even with savings, getting laid off is highly disruptive, and, if done as part of a broader downturn in the market, you may never recover the required cash flow to enable your lifestyle.
Avoid lifestyle creep! I have to say I'm bad at this myself: somehow it all adds up, while each individual expense doesn't look so bad.
Exactly, I feel a lot of my coworkers fell under this trap: if you need cashflow for mortgage on your 4m mansion in (affluent neighborhood), you can't really afford it.
[delayed]
> bit weird how people feel so differently when they get fired
That doesn't seem the least bit weird to me. If I choose to leave a job (or relationship), I could quite sensibly feel differently if that same job (or relationship) chooses to leave me.
> Your manager doesn't get upset when you leave, bit weird how people feel so differently when they get fired.
Really? You think its weird that someone leaving impacts that person more than their manager, team, or company?
A manager doesn't care that you leave because he still gets to bring home a salary, all they have to do is hire another person and maybe cut back on scope for a little while. When someone is layed off or fired they have to go find a new job, their income streams dry up, and are forced to rely on savings. People often have long term financial commitments they cannot back out of, and not knowing how you'll make rent, if you can afford your child's school fees, or even maybe having to cut back on how much you eat, _is stressful_ and emotionally taxing.
Are you fucking kidding me? "Which is a bit weird" I'll tell you what's weird: management who doesn't understand that their employees rely on them more than they rely on the employee.
Of course its fine when someone chooses to leave their job, they've made contingencies and planned around it. Whether it's through savings, another job, or the lottery, people have at least some idea of their plan when they leave a job.
I'm sad to see so much venom in these comments. HN of old would have tried to delve into the details and find something to learn from this.
Very generous severance packages and companies/laders should be commended for this. If it's a one-and-done big cut with generous packages to save the company, then good on them.
Somehow overhiring and maintaining said headcount long enough to need to do a 20% cut is probably less commendable, but not exactly an outlier there in the current climate.
I've always wondered about all these standalone "point solution" companies and how durable the model is. In the current climate of reduce M&A, and cost consciousness there is no one to sell to. And as the big platforms - AWS, Azure, GCP continue to grow.. it strikes me that more big companies would rather have a one-stop shop full of 80% solutions than pay for 100 different SaaS.
Not one-and-done, at least step 3 in a potential routine:
16% in 2023: https://blog.dropbox.com/topics/company/a-message-from-drew
Or, before that, another 11%: https://dropbox.gcs-web.com/node/8916/html
I wish them well, things look rough.
They've been doing 20% layoffs two years in a row now.
Yeah that's "run for the exits" territory to me. Especially considering they are already below pre-COVID staff levels it appears.
Severence is only so they can dodge regulatory scrutiny. They are not doing it out of the goodness of their hearts and was a line-item in the burden category for those employees when they were hired.
What regulatory scrutiny do you mean? They don't need to provide severance, as far as California law seems concerned. I'm not a Californian, but an Internet search shows they're an at-will state. So it seems like everything is on the (legal) level.
There's really no pleasing some people. Companies make cuts and don't give generous packages, they're evil. They give a package and it's just so they can dodge scrutiny.
This kind of no-win complaining is tiresome.
Obviously the win is not laying people off. It's no secret that tech companies have not been hiring for sustainability and that sucks.
Remember how there used to be a blog (or maybe it was a Tumblr, I forget) that documented every "Our incredible journey" post that inevitably announced the start-up's closure?
I think we need another one for "An update from <company>", as this has seemingly become the standard subject to use when you're announcing layoffs or data breaches. I saw an identical headline earlier today from Sony announcing a studio closure:
https://sonyinteractive.com/en/news/blog/an-update-from-play...
This guy takes "full responsibility," even.
Something weird I noticed about Dropbox: I cancelled my paid account two years ago. I had 5 terabytes of storage being used (mostly shitty concert vids and food pics).
Everyday they email me telling me I’m over my limit. They always “threaten” to delete the data but it’s been two years since I cancelled.
My Qs are: why are they hoarding my data for so long? Why would they want to do this? How cheap is storage for them to want to do this? How likely is it that they have sold my data to train various LLMs with?
If they delete your stuff, you almost certainly won’t resume your subscription. The cost of storage may be lower than the benefit from re-subscriptions, and possibly the cost of actually implementing and maintaining an automated deletion process in compliance with all jurisdictions.
You can just delete your data dude. No one is forcing you to keep it there. They’re generally not going to do something destructive because of unpaid bills. It’s nice of them
But why do I have to log into Dropbox to do this? I haven't logged into the site in 2 years and don't plan on it. I just find it odd that they keep threatening to delete my data but from where I'm standing it looks like they will keep my data indefinitely.
I'm not forcing them to do anything. I terminated my service and they're still keeping my data. Seems like shitty consumer rights that they'll just keep the data regardless of what I do.
That's what I'm trying to figure out, if others have similar stories.
> sold my data
Sure the license agreement would not legally permit that.
I wonder what kind of legal recourse you would have. There's obviously copyright infringement, but I think state laws like CCPA include remedies for violations.
I'm always a bit confused by profitable companies with (presumably) large reserves laying off lots of people. I get that they want to remain profitable. But sure 500ish people could be put to some use? A new product, a new market, a spinoff. Whatever? Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?
It always seemed common sense to me that once a piece of software became stable and profitable you would need a much smaller engineering staff than when it was being built. The opposite seems to happens and orgs 10X their engineer headcount once they start making money.
It makes sense to keep some high performers and a few redundancies to stabilize/modernize it and make small improvements, but it feels like tech got really bloated with these massive corps who were trying to burn as much as they could to keep all the VC money flowing. Take like Uber having a team that built and maintained a chat app just for internal use, and every single big org having a bunch of teams responsible for various "some_dumb_name" that is the "custom X for 'Y'" where smaller teams just use the OS solutions to those problems.
> once a piece of software became stable and profitable you would need a much smaller engineering staff than when it was being built
This is not generally the case, except in monopoly situations.
Your software product generally has a competitor, and they're busy trying to make theirs better than yours -- whether with more features, better integrations, whatever it is.
So your staff size generally stays about the same in order to build more features desired by customers to prevent customers from switching to your competitor and you go out of business. And certain features, by themselves, can be more complex than the entire v1 of a product. And/or involve massive refactoring, etc.
The companies that get to reduce their team size are often because they're in a monopoly position, and then customers suffer because the software gets stagnant and the features they need don't get built. That's capitalism failing.
Also, something like an internal chat app isn't always a bad decision. If your company is above a certain size headcount, it can literally be cheaper to build small tools than to license them. Especially when you can more deeply customize and integrate them, which you often simply can't with off-the-shelf software.
> Your software product generally has a competitor, and they're busy trying to make theirs better than yours
Unless you are selling a commodity. There is a good case to be made that what Dropbox sells is a commodity.
> That's capitalism failing.
That's government failing.
1. You can't dig the moats necessary to establish a monopoly without regulation to support it.
2. If/when the government screws up, the onus is on it to fix the problem before the situation gets out of hand.
> I'm always a bit confused by profitable companies with (presumably) large reserves laying off lots of people.
According to their financial statement, Dropbox has more liabilities than assets. So yes, they have a large cash reserve, but with an even larger debt offsetting it its hard to argue they are in a good overall financial position.
> A new product, a new market, a spinoff.
Five or 10 years ago, they were doing a lot of this. Dropbox Paper ("a collaborative online workspace that allows you to create, share, and edit documents and notes with your team") for one. It's still active but it never took off. I was just notified that there is some sort of migration taking place which is probably related to the RIF.
What's the alternative? Busy work and shrinking equity value until things turn around or I get a much more abrupt layoff?
I think I prefer the severance, the full disclosure, the opportunity to find another job and the possibility to keep teams together at a new thing.
The company could put them to some use, or they could get capital and launch their own ventures. It's equivalent from a market perspective, except the one you suggest requires unnecessary coercion (forcing the employees to work on something they may not have signed up for).
At the end of the day, the american market place is distinguished in that venture capital, especially in tech, is very accessible. Being laid off seems to be a bonus in the hunt for VC money.
It's the same reason companies return dividends. Sure, they could use the money for R&D and launching a new product, or they could send the money to investors so that they can scour the marketplace for a new technology of their own choosing for investment. The first one unnecessarily takes investor money for a project they may not have signed up for, whereas the former maximizes their freedom to invest in what they find interesting
Remember Better, the mortgage company? They were briefly notable for laying off 900 people on a Zoom call. However, no-one asked why a re-envisioned mortgage application/process was failing in the best possible market. My opinion is Dropbox most valuable commodity is the millions of Windows PCs with a system level scheduled task that is vulnerable to "hijacking"... basically they are a data stream.
It was not failing in the best possible market. Better was a successful lender for mortgage refinancing. Better struggled to establish itself within the purchase market which has far more complex relationships.
Those employees were costing more than the value they were creating.
If the marginal product of labor is lower than the marginal cost of labor, the company should reduce headcount. If higher, the company should increase headcount.
Arguably the value they were creating was influenced by the direction and application that labor was directed at. Redirecting that available labor at something more valuable would fix that as well wouldn't it?
> direction and application that labor was directed at
That would require leadership to take a hard look at the value they bring to the table as well.
It's a lot easier to just lay people off than do that though, conveniently.
It is basically showing that company is out of ideas, so only thing which they mange to do now is bean counting.
Every new product or market usually also needs additional investments, maybe even new workers with relevant domain knowledge. And Dropbox did try new products and markets, but what if it's not working out? Should they continue until money runs out?
And some interesting part of this announcement is the mentioning of the grown overcomplex management. This kinda smells of some shrinking for health-benefits. For some reason or another, they grew into a wrong direction, and maybe now remove the unhealthy parts to be able to operate better.
> But sure 500ish people could be put to some use? A new product, a new market, a spinoff. Whatever? Are you telling me that no one in such a big, wealthy company of clever engineers has any use for a bunch of talented people?
I think a lot of the low hanging fruit in tech has been eaten up, bought up and consolidated, or actually was recognized as much more difficult and expensive than they actually thought. The leadership talent and vision in a lot of these companies is also painfully lacking. In short, to answer your last question: probably not. And I think they're terrified that Wall Street is going to notice.
I agree with both comments. ~500 can surely build some amazing tech, smaller teams have done more. I personally do think there's still a lot of relatively low-hanging fruit left, especially with the boom of possibilities due to AI, or simply what one can do with modern CPU/GPU performance, new browser APIs, modern tech factors, etc.
I also do agree and think leadership talent and vision in a lot tech companies is painfully lacking. This are the companies that could burn some money and use their wedge in the market to build some really cool things, but they wont. I guess to some degree, ironically, the money they're making might be part of the problem.
But which people: the sales/marketing, the developers that actually make the product, across the board? At some point, development gets to a stable and solid product, so revenue increases come from staffing up sales/marketing. So does that mean you can reduce the devs to try and increase new users or that you've overstaffed the sales/marketing? Maybe there's just too damn many middle managers? Will the cutting be a surgical blade or a broad axe?
Often they target the lowest performers for such layoff. Of course they rarely succeed in doing that, but the idea is that these people should have been let go anyway but weren’t for various reasons.
> Often they target the lowest performers for such layoff.
In my experience, this is often an after-the-fact rationalization by people who "survive" layoffs to explain them, and a convenient justification by leadership for layoffs. If you've ever been in the room when layoffs are planned or discussed, the actual process is way more focused on blunt cost, personality of the people involved or on the chopping block, and is often practically a tossup considering "performance" is not really a clear or meaningful metric (actually, more often it's arbitrary for most companies --- they will find the metric they need to justify laying off someone). This phenomenon is greater the bigger the company and the more abstracted managers and leadership are from their lower level employees.
That hasn't been my experience. I usually see the senior people with higher salaries being laid off.
At one company I worked at, a whole division got laid off because the director didn't like the manager of said division.
It might be 500 middle managers which you can't do much with.
Why not? Some companies do try this. It rarely succeeds though. The reason is that re-education en-masse, restructuring of the chain of command, re-allocation of resources are hard. Most businesses at some point enter the phase where the inertia is the strongest driving force: they only need to apply a tiny fraction of initial force to keep the lights on. At this point, trying to restructure is bound to be very hard.
Maybe, if the company can foresee and realistically assess the problems it's about to face, it may gradually prepare for the transition. I've seen this happen at my friend's job at Dell storage division: some storage product failed, they tried to reshuffle the teams to start working on something else, with some code reuse from the previous one. It still didn't go well, and a lot of people were still let go (because the initial effort of developing a new product cannot really accommodate an army of various kinds of extra personal that's necessary for mature product). They sort-of survived, but with a huge loss.
I'm a libertarian in most things but I still don't like layoffs from profitable companies.
Like it's probably not good for our society that people have to up end their life every few years and probably move to find a new job.
Both my parents stayed in the same job for their careers and it meant they could stay in the same place, have kids, build ties to the community, etc. Seems important if you want to not die out as a society.
> Like it's probably not good for our society that people have to up end their life every few years and probably move to find a new job.
The thing is, Dropbox is done (as in feature complete). Like when the construction of a building completes, many people are "laid off" because they aren’t needed anymore. Yeah, you need to keep some people around for things like maintaining the building, but not to the scale of the original workforce required to build it.
It is "good" that the excess labour is freed up to go work on the next "building". What may not be good is that the workers didn't think to associate with each other like construction workers do. Construction, being a much more mature industry, typically keeps a clear separation between the workers and the building so that then construction is done the entire excess group of people can be lifted on to the next project instead of all going their separate ways.
Software will undoubtedly go that way eventually. But it is, in the grand scheme of things, still early days for it as an industry. We haven't yet learned the lessons that older industries have.
> Both my parents stayed in the same job for their careers
My father was the same, BUT.. this is an INCREDIBLY risky thing to do career-wise in the modern era. Given how much tech advances and that we actually face international competition that a lot of our boomer parents didn't during their career, I don't see really any going back either.
Some of the worst layoff situations I've seen were guys who worked in the same company for 25 years.. long enough that their knowledge & skills was too company-specific, but not long enough to retire. Just because someone seems indispensable doesn't mean they are safe.
Having to drain savings for 1-2 years jobless after a layoff in the last 10 years of your career and reset at a probably lower salary can set back your retirement 10 years.
As one friend put it, he "works for Silicon Valley Inc, <name of company> division."
Fully agreed - yet, we as a society consistently and systematically trade (or let "others" trade) much more critical aspects of life, such as quality of air, water, food etc. for short-term profits, even though that very often has no clear/direct positive impact on any other comparably valuable aspects of our lives.
So it's no wonder that "some people losing their jobs and needing to move for a new one" is irrelevant, when the only goal is profit maximisation, even though we don't even understand what for.
The uncomfortable truth is that pretty much any business can cut staff by 20% without impacting overall performance. Provided that you manage to weed out the tail end of the performance bell curve that is.
Most of the time, reducing staff is a healthy move for the business and the impacted employees. The company will not only save cost, but strengthen its culture of high performance. And under-achieving employees are often fundamentally unhappy in their role. While the short term impact of being made redundant can cause some distress, these people can still use the occasion to reset their careers.
So all in all, no reason for grief.
So, reduce people to numbers and accept the suicides?
Dropbox my one critique is can you please make it affordable again. I just can't justify the cost as there are cheaper services out there. I don't care about PDF signing etc. I fear OneDrive/Google Drive are eating you lunch because it's a hard sell to be competitive against them price wise.
I left Dropbox when they added (and preemptively enabled) a checkbox that shared your data with them for AI training. I refuse to do business with a company that will just unilaterally invade my privacy like that. They can make it as cheap as they want, I'll never go back.
Selling data is always the last play for all businesses that have data.
Either you never give it to them in a way that can be sold (e.g. fully encrypted), or you expect them to sell it when the leaders need to increase cash flow.
Exactly!!! I stopped being a customer when they lost touch with their customer base. They decided to become something else, adjust plans however they thought, introduced useless featured and all these while riding the money train. I feel sorry for those being laid off, it’s not immediately/directly their fault. It’s the management and the product responsible that should take the blame.
Steve Jobs was right - Dropbox is a feature, not a product.
It's a product that I was willing to pay for (until I required native E2E encryption). _iCloud Drive_ is a feature, mostly — aside from the fact that you still have to pay for it to be useful, so kind of still a product.
Steve Jobs was wrong about many things, and this was one of them.
A feature of what? Surely Jobs didn't expect a feature of Windows, OSX, Android, Linux, and ChromeOS to all seamlessly interact with one another.
I don't doubt that Jobs might have seen Dropbox as a feature that Apple could have implemented across the Apple ecosystem, but that's a pretty limited view of where the value of Dropbox lies.
It's been a product for 17 years.
Not when your competition are consumer companies like Google, Microsoft and Apple.
I'm on Google One at $100 per year, getting more services than Dropbox can offer with their $120 plan.
Maybe they have a future in enterprise sales, but they are outcompeted even by Zoho in consumer space
I'm responding to the person who quoted Steve Jobs by saying Dropbox isn't a product, it's a feature. 17 years is a really long time on the web, and Dropbox has not only been a product, but a successful publicly traded company for most of that time, during which so many other "real" products have risen and fallen. The fact that you subscribe to Google One doesn't tell me anything, except that Google created a product to compete with Dropbox, which is also a product.
I stopped using them when they refused to work with valid windows paths - to wit, files and folders with emoji in their names.
Now I pay for google drive instead.
OneDrive/Google can afford to take a loss on you, they are effectively selling you storage at a loss. Dropbox can not do this.
you're not a target customer anymore.
they need $$$ from enterprise, everything else is a distraction.
Funny how Hacker News spent the past 15 years laughing at anyone questioning the viability of Dropbox as a business, but then after two years in a down market half the site is begging them to be cheap again.
What's the matter? You like the sound of that crusty, slow Linux NAS that this site has derided for years?
Being sorry - check
Takes full responsibility - check
Layoffs are still there
I think we'd all collectively blow our minds if a CEO said "I take full responsibility for the bad decisions and overhiring, so I'm resigning"
Avoided the "20% more space at Dropbox" headline - check
I was hoping for a 20% price reduction.
Claims to take full responsibility but since he has not resigned he has not taken any responsibility he has just said the words.
That's not what it means.
As CEO, it's his responsibility to make/approve the decision to do the layoffs, or not. The buck stops with him. That's all that it means. It doesn't mean he's liable for any hardships.
how would you like the next CEO to handle it, for reference?
Stop saying "take responsibility" if they aren't actually.
If you knock a girl up and you "take responsibility" it means you getting married.
If you are in a car wreck and you "take responsibility" it means you are paying for repairs.
If you commit a crime and "take responsibility" you are going to jail.
So if a CEO is "taking responsibility" it should be something like that second case, dollars from their own pocket to the effected party.
GP asked what should CEO say instead. Not what should they not say.
LOL, CEOs job is to keep company up and running and in good graces of wall street. And he is taking responsibility of doing that.
Layoffs are terrible but acting like petulant child and lashing out at CEO won't do much.
CEOs responsibilities are defined by shareholders and relevant laws applicable, not by rank and file employees.
> but acting like petulant child and lashing out at CEO won't do much.
I don't think anyone is attacking the CEO with the expectation that he's got his iPad in-hand, reading every comment through his tears. What we are saying is that corporate doublespeak is unbelievably fucking grating when it doesn't correlate whatsoever with tangible change at the company. This kind of repeat behavior is what makes people (justifiably) laugh when CEOs walk out onstage.
Like when Tim Cook steps out on and insults us all perennially with his "best iPhone yet" comment. Like, duh, of-fucking-course it is! Why don't you tell me something I don't know, show me some form of change in your posture or the way you provide your products and services to me. Don't just advertise to me - convince me that you're not steering the company in a direction that sucks for everyone but the CEO.
> Tim Cook steps out on and insults us all perennially with his "best iPhone yet" comment
I loved this sentence and the sentiment behind it. Nowadays whenever I get the urge to upgrade my old iPhone 13, I go and rewatch old recordings from 2021 of Tim Cook gushing about how the phone I already have is such a huge leap forward for humanity and why everything that came before it is garbage.
Applying this to CEOs and layoffs, every time you join a new job and start to drink the company kool-aid about how you're part of this wonderful family, go and reread that CEO talking about how he took personal responsibility for throwing hundreds of his "family" out on the street right before the holidays.
GP is attacking annoying bullshit language. Not the CEO.
These words mean nothing really. I expect the next CEO to not use meaningless phrases. How does "taking responsibility" works in his case? What does it even mean other than PR fluff?
It means he’s saying people should be mad at him instead of at someone else. It seems to be working.
why would you expect the next CEO to not use weasel words? it's like they all go to the same "mom school". they all go to the same tailor to make teflon suits so nothing sticks to them, and they all learn the same "rain in spain falls on the plain" dreck.
I mean he's just stating what his job is. CEO is responsible by definition. He's saying "Hey all this is my job."
No, responsibility is not a word. Responsibility is an action.
If I'm on-call, I'm responsible to carry my laptop with me and be available immediately to fix critical issues. I don't just say "I take responsibility of being on-call", and the leave my laptop at home, get drunk and fall asleep in a bar for the weekend. That's called being irresponsible.
I see. But that's still like doing your job. I do my job for being on-call by having my laptop with me and phone on, etc. If do my job badly I get fired.
So this CEO is saying, "if I do my job poorly I understand I could get fired."
But, did he/she do their job poorly? That's the thing I can't figure out quite yet. It seems it was bad for the laid off people, but maybe not for Dropbox?
Take a pay cut. Return last year's mega bonus.
If he was responsible for the conditions that led to the layoff, he could also resign.
Layoffs happen even in well run companies.
Actually they don't. Well run companies have cash reserves and expect to have periods of ups and downs. They don't pray to the alter of the next quarterly report.
Well run companies laying off 20% of the global staff?
None come to my mind, do you have any examples?
> Well run companies laying off 20% of the global staff?
Well run companies laying off 20% of the global staff a year after laying off 20% of the global staff?
well run companies do not hire more employees than they can afford
They should make whole those affected, as best as possible. The CEO, who is the responsible party by their own declaration, should distribute their personal wealth to those affected until all parties have approximately the same amount of wealth.
I would like for there to be a next CEO
By letting a lower rung employee take the responsibly. This is giving CEOs a bad name and is only one step away from the board taking the heat.
A 20% layoff means either the market changed very very quickly or something went terribly wrong in the company strategy. Here it's the second scenario and I'd expect the CEO to be on shaky grounds after such bad results.
There needs to be more explanation on where the CEO screwed up that badly and the consequences for the management.
At the very very least, they should be explaining how Dropbox is suddenly a 20% smaller company, because either that means the market has contracted by 20%, or Dropbox has shit the bed as a competitive entity in said market.
Both options should directly imply that the CEO should earn less. Either you're running a smaller, simpler company, or you sucked at your job.
Eat the loss.
They aren't 20% smaller, they stopped growing. Some of those positions existed to help them continue with growth, which now isn't happening.
They reached market saturation, which isn't the same thing as failing.
With the resources that would otherwise be given to the excised one, is a good start
How about describing what exactly taking full responsibility means for them in that particular situation?
Saying e.g. what is the impact on the situation for those responsible might be nice - no bonuses for next year? A plan in place so that this doesn't happen again? Stepping down as a CEO?
I mean, if I take responsibility for e.g. wrong tax filing, I pay the fine penalty, and/or go to jail.
Saying "I take responsibility" some kind of failure while having no consequences for said failure is not taking responsibility.
Conversion to worker coop
The severance package is great!
I don’t think I would be upset (unless I was extremely passionate about a project I was working on)
I dunno. It may take 1-2 months to prepare for Leetcode style interviews, and this can be pretty mentally exhausting. Every time you fail to solve a leetcode question, it feeds your imposter syndrome, which is probably even worse due to getting fired.
With all due respect, that sounds like a personal shortcoming to me. One can (and should) not take interviews personally. One also can (and should) be able to acquit oneself well at an interview even without prep time.
> One also can (and should) be able to acquit oneself well at an interview even without prep time.
I don't agree. If you don't prepare at all for an interview, it shows. Aside from leetcode, it's also important to research the company.
My point is mainly that I might be upset if I were in that group that's laid off today. I don't want to prep leetcode for several weeks. It feels like a waste of time.
If leetcode wasn't hard enough to make a good programmer fail now and then, there would be no point to it.
If Leetcode didn't provide discrimination defense and neg the candidate shortly before offer, there would be no point to it.
16 weeks + 1 week / year severance works out to 3-5 months.
Looks like enough time to prepare, take a vacation, ect.
Wow, that's horrible. And you might even have to stay at a 4 star instead of a 5 star resort in Bali when you take a vacation during your severance, job market is tough.
Even worse, you might have to miss one contribution to your FATfire investment account to deal with the extra risk. Compounded, that missed contribution might mean you'll have to retire at 46 instead of 45.
How dare these companies treat these people this way. They took the massive risk of working for an already-successful company at $250K/yr with a $200K stock package, and now fat cat Drew Houston dares to leave them with just an abnormally large severance after they are no longer needed.
I don't think your tone aligns with the community guidelines[1]. Please consider not being snarky and sarcastic but actually responding to the merit of what people say here.
[1] https://news.ycombinator.com/newsguidelines.html
As a fellow tech worker, I genuinely believe all the things I mentioned are upsetting. It's happened to me before!
I realized though that I was probably going to be okay, and what I actually needed was some perspective.
Sometimes the contrast of "sarcasm" is the only way to shake you out of your bubble and give you that perspective.
Considering how horrible the job market is right now, four months of pay may not go very far.
Really? 16 weeks of salary, or 4 months of pay. In my country, you get 3 months of pay as standard when you're fired from your job. Doesn't seem that great to me to be honest.
Do you earn SF salaries in your country?
They probably don't have SF housing costs in their country.
US salaries are quite a lot more; lifestyle creep is a thing but at least for developers they get paid a lot more than the average worker in the US than say in the Europe. Factoring that, 4 months is amazing.
In the US, the minimum required is usually zero. The most I ever got was 4 weeks.
The minimum needed in the US for this situation is 60 calendar days [1]. Hence the 16 weeks.
https://en.wikipedia.org/wiki/Worker_Adjustment_and_Retraini...
But are you not expected to work those 3 months? 4 months of pay without work is decent, but not amazing.
> But are you not expected to work those 3 months?
When you are leaving on your own term yes.
When you are laid off you are technically still an employee for those 3 months but nowadays many companies will just tell you to not show up for security reason.
It sounds like it's 25% better than what you get in your country?
Personally, I'd consider this nothing to write home about. It's OK. Not great, not terrible.
If we're laying off 20% of the company, I'd expect the package to be somewhere in the 6-12 months range. To me, that would seem more fair, considering they are completely restructuring the whole company.
I'd rather take having a tech industry at all and the 2-4X bigger US salaries (and 30% lower average taxes) than having my fellow citizens shoulder the burden of giving me 6-12 months of daycare.
In the US luckily the job market is still quite dynamic (and extremely tight by historical standards) so only in an extreme scenario would someone with Dropbox on their resume need 12 months to find another job.
They might have to take a pay cut from a 99th percentile salary to a 96th percentile salary though. Rough, I know.
Yeah, nothing to write home about until they pay inflation adjust salary till retirement age of 67 for all laid off employees.
“25% better than legally required minimum” is not generally considered “great” in many circumstances.
Comparison is the thief of joy. In the US, any amount is... infinity %? Undefined %? better than the legally required minimum of 0.
33%
In big tech in the US, 4 months is usually enough to find another similar job in the industry. Also in the US for mass layoffs at big firms, the minimum is effectively 2 months because you are required by law to give 2 months notice to workers about such layoffs, 2 months severance is a way to not have to give such notice.
In this market, 4 months definitely isn't enough to find a similar job.
This is a bullshit package because of the healthcare.
I was laid off from a different company with access to 18 months of COBRA. Dropbox is offering a third of that. Lots of job searches take longer than 6 months, so the employees are going to be left high and dry right when they need it the most.
For the non-Americans, my COBRA expenses are about USD$2,000/month for me and my partner. I’m paying as much for healthcare as I am for rent. Even so, it’s still financially better to take COBRA than pay out of pocket for my prescriptions.
I wonder if they meant paid COBRA of 6 months, bc 18 months is like the minimum to offer continuing coverage. COBRA coverage is a Federal Law for large employers.
https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-a...
"Q11: How long does COBRA coverage last? COBRA requires that continuation coverage extend from the date of the qualifying event for a limited period of 18 or 36 months. The length of time depends on the type of qualifying event that gave rise to the COBRA rights. A plan, however, may provide longer periods of coverage beyond the maximum period required by law."
All West Coast states have free healthcare (medicaid) available if your income is below a certain threshold. And there is no time limit on that. It won’t help with rent, but at least these folks won’t be completely without healthcare access.
There's pretty much no way they'd qualify for Medicaid if they were a dev at Dropbox. The income limit for Medi-Cal is $20,783 for a single adult, $28,208 for a household of two adults. Chances are they were past that income limit the first few months of the year. You don't just immediately qualify after making $140k annualized for the first 10 months and then hit $0 one day.
Plus, they're getting 16 weeks of salary. At $140k/yr, that's $2,692/wk. Lets say their severance starts next week. There's 8 weeks left in the year. So they'll get 8 weeks of pay in 2025. $2,692 * 8 = $21,538. So no, they won't qualify for Medicaid at all in 2025 if they make that much as a single person.
This is a great severance plan.
1. 4 months pay + 1 week per year of tenure. 2. Receive Q4 vests. 3. Upcoming approved leaves paid in cash. 4. Year-end bonuses paid. 5. Keep company devices.
It is a great deal. The core demographic of HN has been very fortunate and does not understand what the norm across industries is.
You know what's better than a great severance plan? Keeping your job.
Not necessarily.
If you're actually good at your job, you typically end up with an even better job: https://hbr.org/2018/10/research-when-getting-fired-is-good-...
The linked article is specific to executives and kind of confirms what most are complaining about here.
> a 10-year study of over 2,600 leaders showed almost half (45%) suffered at least one major career blow-up — like getting fired, messing up a major deal, or blowing an acquisition. Despite that, 78% of these executives eventually made it to the CEO role.
An executive can make a series of awful decisions and still advance in their career.
Most employees can as well - IFF you move to different companies.
You can’t be serious. This package sucks specifically because of the healthcare.
Industry standard is to offer 18 months of COBRA, not 6. Job searches frequently take way longer than that.
COBRA is a huge deal for departing employees. My single largest expense is health insurance for my partner and I, more so than even rent.
this is a good deal, better than most retention packages out there.
But why is every ceo feels obligated to use this kind of meaningless corpo speak in these emails? "Macro Headwinds", "full responsibility"?
PR-speak is the same everywhere. The audience for this is Wall St, not the general public.
Gotta prevent panic in stockholders is the main priority of a CEO in publicly traded companies. They only concern themselves with the well being of their employees as much as how it affects the stock price.
TBH it feels like Dropbox has a pretty fair earnings multiple at the moment (~4X). Have we reached a point where tech companies have been around long enough that they can / should enter a sort of maintenance mode? It feels like there is a company version of the Peter Principle. Why do they (Dropbox specifically) need to continue to "innovate"? Wouldn't it be better for all parties if they just focused on maintaining the best possible version of their core offering at the lowest cost? Maybe Dash (or whatever) will work but most likely it won't, and investing in that initiative puts their whole business at risk.
> enter a sort of maintenance mode
There exists such a mode: it's called dividend distribution. But currently DBX and many other tech companies aren't paying any dividends to stock holders. So if it's not growing and not paying dividends, what is the company doing?
Providing goods/services. Perhaps the qualifier "being publicly traded" will help
Alternately we have entered a phase where layoffs have metastasized as a thing to do so much that executives are being asked about it. "We've noticed you haven't done any layoffs yet, can you explain that?"
> pretty fair earnings multiple at the moment (~4X).
Dropbox's EBIDTA is 14.67, but most Software Companies tend to have an EBIDTA of 28.
Dropbox is significantly underperforming compared to their peers.
Furthermore, cloud file storage has become commodified and Dropbox missed the DLP, DSPM, and AI Search train.
> Have we reached a point where tech companies have been around long enough that they can / should enter a sort of maintenance mode
Absolutely not.
If you do not innovate as a software company, you risk becoming commodified.
And if BUs within a company fails to execute on their innovation or GTM strategy, they will be let go.
> "As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change."
As with other CEOs who say such things in similar situations - does this "responsibility" amount to anything? Like loss of salary or options or seniority. Or is this just empty words?
I appreciate that this action is probably necessary to safeguard the business but, as someone who has been at the sharp end of a number of redundancies, I wish leaders would be honest:
"We tried stuff but it didn't work. I was and am in charge, and I'm staying. We're making you redundant because we need the money more than we need you."
Obviously no leader would say such a thing. But the people affected (and thas not just those being made redundant) deserve honesty, not platitudes.
"I earn the big money because I make decisions and I take risks (with others lives, but let's not talk about that). My decisions haven't worked; my risks haven't paid off. I'm however letting you take the hit, because I'm too important for that kind of shit. I've more decisions to make, and risks to take. My family is fine; my pay is fine. It's just you who are affected.". -- Your CEO, who still makes more money that you do (or don't), no matter what.
Most people understand that companies need to adjust in size. There’s nothing moral about it.
(Your comment was dead but I vouched for it because I want to explain why youve failed to appreciate an important distinction.)
tldr: the redundancy is not the announcement
I think people (and I include myself) do understand that companies need to adjust their workforce. I think that decision is not wholly moral in nature. But it does have a moral component - and Dropbox seems to appreciate that somewhat in the assistance they're providing the people who are leaving.
But what isn't moral is an individual announcing publicly that they take responsibility for acts that cause trauma to others (however constrained that decision was) while in reality that responsibility-taking involves no consequences at all the individual. None.
In the large train station in the city where I live, the automated voice announcements "apologise" for train cancellations. I'd argue that this is as empty and insulting as this CEO's email - because no responsibility has in fact been taken. The CEOs words and the announcement software are as morally empty as eachother.
If You Want To Tell People the Truth, You’d Better Make Them Laugh or They’ll [unalive] You
-- Some famous person's quote that I paraphrased.
You’re allowed to say kill on Hackernews
Sad news. But the message is crafted well. Crisp and no overly emotional.
If you look at its earnings they have appeared to plateau and there isn’t a major offering planned that will change this.
I am reminded of Slack which has a similar history of rapid growth followed by a very competitive market and then significant slowing. Maybe Salesforce could acquire Dropbox and bundle it into their offerings or some other similar company?
Slack shot their own selves in the foot iirc. They were miles ahead of any competitor, employees loved it, and then they just started gouging all their whale customers in contract negotiations, to the point that they started looking elsewhere...
If this isn't the full picture, let me know. I was at multiple companies trying to move away from Slack as the cost was not justifiable
What are they moving to, though? I can't imagine that Teams is any better.
Teams and Google Chat. They're both incredibly bad compared to Slack. But if your org is on 365 or Workspace, you're already paying for them. Big orgs don't love double-paying, quality be damned.
Teams is close enough, especially given its cost.
Slack displayed alot of hubris and didn’t pivot. Their goal should have been Microsoft or Google acquisition.
MS Teams was a large contributor as well to the downfall of Slack. It automates decently with the stuff most companies already have (AD, O365, and most importantly all that compliance bullshit), and nowadays it can even do landline telephony, providing enterprises with a way to reduce their exposure to Cisco crap on top of it.
In the end, Microsoft is IMHO once again abusing its stronghold on the market. Just the enterprise-compliance-integration stuff is more than enough to cause any medium or large company to move off of Slack or its competitors (e.g. Mattermost).
Company isn’t doing so great and future doesn’t look so great and people cost a lot of money so they are letting folks go who aren’t as valuable. This makes sense.
What doesn't make sense is hiring so many people to begin with. The writing has been on the wall about Dropbox for quite a while now
Agreed! So many of these companies hired needlessly over the recent years.
It wasnt needless, they didnt want to miss out. They are not sure what they didnt want to miss out on, but they knew for sure that they didnt want to be the only one not doing it.
Kind of surprising to me, because I think I've tried every large competitor in the space, and have found there to be a gulf between the Dropbox UX and everyone else. I'm more than willing to pay their premium price. I was hoping Proton Drive would compete, but I felt like I was beta testing an inferior product.
I guess Wu Tang was right.
Can you share more about your experience, which platform you were using and what features you were looking for so that we can share it with the team?
Anecdotal: I know a lot of people who use Dropbox, I don't know even one person who pays it. They pay for iCloud, probably cause it makes the iPhone experience even more convenient, but not Dropbox. I also don't pay for it.
Yeah, that makes sense. If I wasn't a PC user, I'd probably be utilizing iCloud as well.
Pardon—what does Wu Tang have to do with Dropbox?
The premium experience does have a heavy price tag attached to it since they repeatedly increased the pricing. In the UK, the first plan is now £7.99 / month.
This eventually led me away from Dropbox and I am now an iCloud user - the convenience and cheap prices eventually convinced me, even though I wish a Linux client existed.
Anecdotally, having been in client services, I saw Dropbox use plummet on both the client and agency side once the pandemic hit. People switched from syncing files to working directly on the same document in the cloud (e.g. Microsoft Word -> Google Docs, Keynote -> Google Slides, Sketch -> Figma)
In 2024, I wouldn't invest in any company that's based on "Files"
Where do the Wu Tang come in here?
And yeah, I do not pay for Dropbox either. I've got something like 17gb from pestering people for sign ups XD
Dropbox ain't nothing to duck with.
cream
This guy Wu Tangs
For context, Drew Houston's total compensation for the year in 2023 was $1.5M:
> According to our data, Dropbox, Inc. ... paid its CEO total annual compensation worth US$1.5m over the year to December 2023. That's a notable increase of 34% on last year
via https://finance.yahoo.com/news/heres-why-dropbox-inc-nasdaq-...
Even if Drew took minimum wage, that would save ~15 jobs assuming $100K all-in comp (which seems low to me for a tech salary). 500 employees is more like $50M/year, and probably more.
Of course, Drew Houston's net worth is ~$2B and he could technically loan Dropbox Inc money personally to save the jobs, my guess is a lot of his net worth is actually Dropbox stock that he would have to liquidate and would affect the stock price materially. He would also need to follow insider trading laws too and can't just up and sell vast amounts of stock on a whim. Most executives are on pre-approved schedules to sell any stock to avoid triggering insider trading.
The severance package Dropbox is offering is pretty good - 16 weeks of pay + an additional week for each year of tenure, impacted employees get their Q4 equity vest & prorated bonuses, everyone keeps company devices, an offer for extra time + help for people on visas, and job placement help for everyone.
Dropbox is a public company that is profitable, but not really growing through their flagship product. No growth is more or less bad on Wall Street. They also haven't really had a major hit since their initial file-sharing product and missed some shots they probably should have hit (mainly vs. Notion with Dropbox Paper, Mailbox acquisition, etc). With many systems moving away from "files" and to "cloud objects" like Figma, Notion, etc, their workhorse product might be going away over time too. They need the time and focus to find that next S-growth curve.
Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship.
> Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship.
Layoffs are the trolley problem but you get to pick how many people are lying down on each side of the track and if you want yourself to be one of them.
That said, if one reaches the conclusion that under their leadership they were forced to downsize by 20% (either due to over hiring, failure to reach revenue/growth targets, whatever) that should make that person one of the people on proverbial tracks. Compensation has little to do with it.
>that should make that person one of the people on proverbial track
That's a satisfying thing to say, but as practical advice it's absolutely terrible.
Often that person's leadership wasn't the problem, but even when it was, that doesn't necessarily mean that the company will be better-off without them. And that's the question -- what will make the company most likely to be the most successful going forward? Even if the current trouble is because of some of that leader's mistakes, the answer is often to keep that leader. Sometimes it isn't.
> Often that person's leadership wasn't the problem, but even when it was, that doesn't necessarily mean that the company will be better-off without them
How convenient (for them)! When the company is doing well, they get millions in bonuses because their irreplaceable leadership skills - which make them 2000x more valuable than the least paid worker - were instrumental to the organization's success.
When the chips are down, it wasn't their fault per se, and the company still would be allegedly worse off without them, so laying-off waves of those who don't have decision-making power is the correct remedy, until the good times roll again, and senior leadership is ready to claim responsibility.
It must be nice to claim "macro-economic headwinds" as justification for poor performance and poor planning, but still get paid bonuses for the never-mentioned "macro-economic tailwinds"
> must be nice to claim "macro-economic headwinds" as justification for poor performance and poor planning, but still get paid bonuses for the never-mentioned "macro-economic tailwinds"
What would you do if you owned a business? Fire leadership every time they make a wrong call? Or ban them from admitting they made a wrong call?
Go start a company already — you’re on YC forums
I have started a company, but I vehemently disagree with your insinuation that I couldn't challenge leadership culture had I not.
Founding a company doesn't make one infallible or irreplaceable. Though to be fair, it doesn't feel that way when it's your company though!
> Often that person's leadership wasn't the problem
Then what is the problem? Ultimately you’re paid the big bucks for being held responsible. Why isn’t it never something like the CEO doesn’t get any stocks that year. I’m not saying he needs to leave the company but maybe he should take a substantial hit to his pay. He has enough money to put food on the table for many years, unlike the people who are let go where it’s mostly a mixed bag.
>Why isn’t it never something like the CEO doesn’t get any stocks that year.
Performance based compensation is absolutely standard for CEOs- Both in terms of options and stock grants.
Do those metrics count "number of people laid off" explicitly?
We know they do implicitly because laying off people makes the company more profitable, but is there any penalty for killing jobs?
If not, shouldn't there be?
No, I dont think there should be a penalty by default.
The objective of a company isnt and shouldn't be to run a charity. Some amount of layoffs are desirable just as a matter of housekeeping. Layoffs can be a hard part of doing a good job.
I think there are extreme examples and tactics where layoffs cross a moral line but not a legal line. for example, I think the humane thing to do is freeze hiring before layoffs so you dont relocate someone only to let them go.
That said, there are already a lot of business incentives to avoid turbulence in headcount. It is slow and expensive to hire people and let them go.
The purpose of a corporation is to make money, not jobs.
to play devils advocate, there are different levels one can look at that. From the level of the companies and owners, the goal is to make money.
From the perspective of society there are tons of answers. A common answer is that companies provide goods and services that give consumers more value than they cost, thereby enriching the lives of consumers.
It seems like some people, especially those who take issue with layoffs, tend to think the social purpose of companies is to give jobs/money to workers. This leads to a lot of frustration for those people because the entire economic system is set up such that jobs are an optional byproduct of making goods, not the other way around.
And who sets the standards? Their CEO-buddies on the boards. None of them would dare rock the boat.
One of the failure modes of 401ks and investment funds are large investment pools that don't vote at AGMs, leaving boards largely dominated by CxOs, to their own devices.
The ones out of job can join a different company, america’s unemployment rate especially in the tech sector tends to be low.
Them doing layoffs doesnt mean the people become destitute.
It is better to layoff people who are not adding value to a company, so that those newly unemployed folks can join a different company and build great products and add more value to the economy.
Ofcourse this only applies to US tech sector where hiring is tight. Especially when coming out of top tier companies like dropbox on your resume.
I don’t think its that dramatic, folks who tend to hold similar ideologies like you state, tend to not even bat a single eye, when average americans who lack the privilege of a tech worker lose their job to automation (with tech) or outsourcing or due to overburdened climate regulations and redtape leading to fewer factory jobs in America.
This is not the titanic, those people will move on to places where they’ll have a chance for promotion.
How does that boot taste?
It aint me in front of the boot, random internet stranger, its emotional folks like you who end up getting taken advantage of by communist / socialist / comrade like ideologies, and drown entire societies with you.
I’ve lived previously under a communist government for 30+ years, they often spoke like you, brought our lives nothing but misery though. You could have argued against my original comment, but instead you had to drop down to boots.
I guess boots are what you see in your life in front of your face. Good day
Held responsible for what? The what part is written in contract for execs, movie stars, sport persons. I have not seen in any category people not getting paid per their contract for poor performance.
> Often that person's leadership wasn't the problem
What's the basis for this claim? I would rather think often it was the problem. Not absolutely every time, but most times. After all, the C-suite makes the decisions. I can not believe management decisions do not influence the course of a business.
Sure, it's possible that outside circumstances were such that no decision could avoid a bad outcome. But that's a rather unlikely possibility. Most of the time, outcomes depend on decisions. Otherwise businesses would be some headless automatons. And if that was the case, we should not pay execs much at all.
It's an obvious cheat: when times are good - it's all because of the leaders, when times are bad, it's all because of the environment. This is what they claim, but it is not the truth. Again, what's the basis for this claim? Any proof, studies, anything?
I didn't say which track they were on in the problem, just that they're on one of them.
Generally leaders are not going to fire each other.
So sometimes a doomed strategy will be pursued far longer than you'd expect, barring some board or activist intervention.
Some of it is self interest, some of it is hubris.. but also one can easily blame a bad run on some broader economic situation, specific competitor actions, or right strategy with wrong team (so fire the team) .. this works for a while until it doesn't.
Seriously, that severance is awesome. Of all the tech workers struggling, the ones from companies big enough to throw 4+ mo severance packages are not the ones I am worried about. Any smaller company your severance is a pat on the back.
Yep. last time I got laid off, I got paid through that day. nothing else.
This is why people should build a huge ass f-u fund and not look back.
Yes, as soon as you have a regular paycheck you should start building an emergency fund. This should be taught to everyone in high school (or earlier) but we don't do it, among many other "life skills" that we do not teach because they aren't on the state standardized tests.
Yep, this is what I do. Individual responsibility is an unpopular idea these days but the way I look at it, I am the one who is ultimately in charge of my family's wellbeing. That is far too important to entrust to a corporation's generosity or the whims of lawmakers.
Lobby your representative for change. This is something that laws can and should fix.
Not having worker protections is a political choice. It's not something the market or technology will solve.
Many countries have laws that prevent workers getting laid off with no severance. It is a solved problem, but it's inherently a political problem.
In many countries severance package is guaranteed by law.
What happens if there isn't enough money left to fund the legally-required severance? Do the taxpayers pick up the cost?
Same thing that happens when there isn't enough money to pay their taxes. Or their debtors. Or their vendors. Or their payroll.
USA: lol ok but no
Yet, people still vie from all over to work at US companies and we still draw the best talent.
There's also unemployment benefits for US workers.
Haters gonna hate, I guess.
No need to be in US to work for US companies, and still get a nice severance package.
Not everyone is looking forward to US working conditions.
And it leads directly into the US being richer than all but tiny petro-states and growing faster than all of its peers. Fair enough if that's not what you want but there are tradeoffs.
Lets see how much it remains left if US keeps offshoring all the stuff, followed by imposing import bans after those countries become good enough to start taking over economy sectors.
You can certainly work for a US company outside the US, however you will not get a US salary.
It rather work to live than live to work.
And all the debt you pile up while struggling to get hired.
The average tech worker really should not have to go into any debt for even a year long hiatus from their typically well paying job. All that is required is living like a typical American and saving your salary. I honestly don't see how anyone can claim tech workers are not compensated for the volatility inherent in the industry.
Early-in-career folks are more vulnerable. Even before major family/life costs start to play a role, it can be difficult to save enough for a safety net after moving to an apartment (even w/ roommates) from college & managing student debt, etc. I remember it took me a couple of years of stability to not feel at risk.
https://blog.dropbox.com/topics/company/a-message-from-drew
Drew is developing a habit. 16% last year
edit: 11% before that: https://dropbox.gcs-web.com/node/8916/html
It's less of a habit and more indication of a matured business.
Their revenue has only been growing ~5%.
When you aren't growing, you must focus on operation efficiencies.
Rule of 40, not being applied to margin.
Yea, that's fair. I'm just being critical of the 'facade' (said with less ire than it sounds). The size is no surprise, in or out. I'll be mildly merciful - not all his doing
That’s actually a pretty low salary but I just looked up their revenue numbers and it’s not looking that hot. They are also hemorrhaging cash this year. His salary and the performance of the company were probably a good foreshadowing of the layoffs
> His salary and the performance of the company were probably a good foreshadowing of the layoffs
As is standard. My recommendation to anyone that works in a corporate environment is that if you want to know whether the company will be at risk of layoffs in the future, become good friends with someone in sales. When the sales leads and activity start to drop (or growth rate starts to slow), you can usually be assured that layoffs will eventually follow. In my experience the sales folks were always the first to clean up their resumes and start the job hunt because they knew what was coming.
I still hate the fact that people can borrow money against a stock. Stock should be sold, period. That is how the market sets a price for stock, through the volume of it being sold and bought. By allowing people to borrow against a stock, let's them get the money for the stock while still holding it. That artificially increases the stock price and value.
> Drew Houston's total compensation for the year in 2023 was $1.5M
That is insanely low for the CEO of a public company of Dropbox's size. But I suspect he owned a lot of shares in the company so when it went public, so he doesn't need salary, it is just a rounding error in terms of his wealth.
EDIT: Yeah, he is worth $2B according to Forbes: https://www.forbes.com/profile/drew-houston/
I always wonder what gives these people the drive to continue. Maybe I’m lazy and lacking vision but if I were worth 2B, I don’t think I would go to the office every day just to get accused of mismanagement when I have to lay people off. I would take my yacht to the Caribbean and slack off.
People enjoy having a purpose and a mission in life. Leading a team of people that you put together, in order to improve a project you started, and knowing that doing so will improve both your lives and theirs, is incredibly fulfilling. Even if the day-to-day is full of hardships. In fact, working to overcome hardship is one of the primary source of meaning in life.
Kids are another example. They're expensive, they're annoying, they ruin your health, they take up your free time, they consume all your resources, and they're inherently needy, selfish, and largely incapable of being grateful. Yet raising kids can be profoundly rewarding and fulfilling, in part because of the hardships, and in part because you're contributing to something bigger than just yourself, which is another crucial ingredient of meaning.
Sitting around on a yacht doing nothing is not so different than moving into your parents' basement and doing nothing, save with better scenery. It's the kind of thing you crave when you're burned out, overworked, and jaded, the same way we crave sleep when we're tired and food when we're hungry. It's a reaction to a state of being. But we only desire sleep until rested and we tire of eating once we're sated.
If you ever get to your tropical yacht vacation you may find that, in much the same way, what you thought was a permanent desire was only a temporary one.
Dreaming of winning the lottery and Going On Permanent Yacht Vacation is precisely the difference between being a worn out low-level worker and being a high-level executive who has all their needs met (or at least has the resources to have them met). With the latter you can have enough resources for you next ten generations and still go to work and optimize shareholder profits while thinking to yourself that you are serving a higher purpose.
you are not wrong, but I don't think that is necessarily a huge criticism.
Type A people who become CEOs don't dream of sitting around on yachts.
Some might be driven by money, but at a certain level it probably switches to a sense of responsibility, but also, it's intoxicating to be at the top where you don't really have to work in the same way, but get to direct what happens. People enjoy power. People enjoy the secrets of what happens at the top. People enjoy the recognition (within their peer group). etc...
People who have mission and vision of the future are entrepreneurs because they want to solve problems and help other people not because they want to become rich and sail with yacht.
Listen to Snapchat's founder and CEO Evan Spiegel[0] why he didn't sell to Facebook for $3 billion. He even didn't sell to Google which offered 10x more ($30bn) for Snapchat.
[0] https://www.youtube.com/watch?v=BVu6M72XWUI
To clarify, I actually kind of get it for businesses that actually have a important mission (using my definition of important of course). If you’re working on curing cancer, I would understand that a CEO doesn’t want to leave even if he’s set for life. I just don’t see entertainment and service businesses like Snapchat or Dropbox as actually meaningful endeavors. To me they are nice to have and something I would work at for money, but I wouldn’t feel like I’m making the world a better place. Maybe that’s exactly the thing I was misunderstanding about those CEOs, they truly think their work is needed and important for the world.
I don't have billions and I don't manage people (I've been voluntold to manage 1 person a few times, and I'd rather that not happen again), but I have enough that I don't need to work for economic reasons.
I'm working part time anyway, because it keeps me busy and interacting with people outside my home, and it gives me access to interesting real world problems that I can't really access as an individual person on the interwebs. Having other people depend on me to get things done provides motivation to keep moving on things that I can't seem to manage on my personal projects.
If I liked the kind of organizational management work a CEO does and I was good at it, I'd probably get roped into being a CEO.
One hardly needs $2B to slack off on a boat in the Caribbean… many people do so on surprisingly nice ~30 foot sailboats you can buy with a few months work at minimum wage, and wild seafood is free
I see a lot of people that say “If I won the lottery I’d….” and then describe something they could definitely do without winning the lottery… which makes me think they still would not actually do so if they won
Lawrence: Well, what about you now, what would you do [if you had a million dollars]?
Peter: ... Nothing.
Lawrence: Nothing, huh?
Peter: I would relax, I would sit on my ass all day ... I would do nothing.
Lawrence: Well you don’t need a million dollars to do nothing, man.
https://www.youtube.com/watch?v=4lmW2tZP2kU
If you win the lottery there's no risk in doing it
Sure there is- opportunity cost, the real dangers and skills required to operate a vessel at sea, etc. You can pay a professional crew to do everything for you, but then you'll probably feel pretty useless, and be looked down upon by the people you meet along your journey that do it themselves.
The sea doesn't care how rich you are, and being a helpless dependent is boring and infantilizing no matter how big your boat - and you don't develop skills without taking risks.
Ultimately, I don't think people are often that conscious of their real goals and motivations. It's easy to say you have no choices in life because of financial and time constraints, but I don't think those are the real reasons most people choose to do or not do things.
I can understand wanting to continue doing something. What I don't understand is why instead of putting their time and now considerable wealth into more philanthropic pursuits, they decide to continue increasing their wealth, often at the expense of other, less fortunate people.
He breaks it down in this interview, I believe in this section https://youtu.be/KSeraZxSAbQ?t=1350
Ultimately he mentions that being CEO is a rare opportunity to play a more infinite game and practice the craft of getting really good at something that doesn't have an end
Even if he still wants to work, restructuring a second tier post-growth tech company wouldn't be my first choice.
Yeah I figure a long shot deep tech project would be better suited to a billionaire. Little to no accountability for the first decade or so, and loads of glory if it somehow works out.
I have a slightly different version of this. There are some other replies here to the effect of "people like to have a purpose in life". But surely "helping people share files" or whatever the Dropbox "mission" is can't be that inspiring, right? I mean, the point of starting a company like that is to make those billions. Maybe to do it successfully you need to delude yourself into thinking that mission is really important, I don't know.
But for me, if I had that kind of business success I'd cash out and go do something that feels actually important. Go get a PhD and take a crack at curing some obscure disease, or setting up a Dyson swarm around the sun, or making a great work of art, or thinking about how to improve elementary education a la Khan Academy; something like that. Then you get to have a real purpose and work toward something that most people don't just by virtue of the fact that it doesn't pay well enough, and you still get to spend plenty of time on your yacht!
The instinct to acquire resources does not have a limit. When homo sapiens evolved, such a limit would not have been a useful adaptation. There were no billionaires then.
Also it's nice to boss people around, probably for the same reason.
You and lots of people say would do something or other. I submit that it's different when you're actually in that position, as opposed to imagining it. Lots of us imagine we're going to go to the gym for years, and give up after a month or two.
Some people do exactly that but it's rare that someone will simultaneously have the drive to do something that will generate them billions of dollars and also be willing or able to just stop working at that point.
Also remember once you have that much money a lot of things become basically free, both figuratively ($100,000 to a billionaire is nothing) and literally (comped rooms, gifts, etc for basically every event and your company(ies) end up footing the bill for most of your expenses).
There's plenty of people who make $5-50 million in a windfall and are never heard from again.
True, it’s probably that this drive is what allowed them to be billionaires in the first place.
Just to rant a bit more: the Wordpress situation makes this point even more crazy to me. Mullenweg has about 400m and instead of retiring and enjoying life, he’s arguing with anonymous users on Hacker News. No offense against hacker news but defending my life decisions on HN isn’t exactly the first thing I would do if I could do everything I ever wanted. Like, go buy a plane and take flying lessons, or go scuba diving? Nah, I’d rather justify myself on the internet.
I expect a lot of people with that kind of money can't enjoy life as it disconnects them from everyone else. Your friends can't afford to do those things with you, so you either end up buying friends – with all the disillusionment that goes with that – or you turn away from people and get your fix trolling computers instead.
hey gotta do something on the toilet
Because it's fun? Honestly after two days of vacation, I'm about ready to do something
Yeah but if you were worth $10m, $100m, $250m, would you take it easy? If you would, then you wouldn’t get to $2b.
I got from the other comments that he got the 2B by owning part of the now very valuable company, not by working for a salary. Assuming he picked a good enough successor that didn’t completely ruin Dropbox, he should still have pretty much the same net worth without any work, no?
Your presumption is that it's about the money for everyone.
But there's a lot more at play when you are rich enough to not worry about money.
It’s not “ridiculously low.” Before the layoff they were 2700 people. That’s like a VP2 at most large tech companies and 1.5M total comp is spot on for that level.
I think even the Mozilla CEO made more … I looked it up as I wrote this.
Nope … the Mozilla CEO makes 6.9M a year which is insane.
In comparison Drew is underpaid by a factor of 50 or more.
Why is the CEO's TC relevant to layoffs?
> $100K all-in comp (which seems low to me for a tech salary)
ic1 at dropbox is 175k and ic4 is near 500k, ic5 near 700k.
https://www.levels.fyi/companies/dropbox/salaries
Do they really need such highly paid engineers? Are they really doing anything that innovative, new or first on market.
They could probably save these jobs by adjusting the comps.
Uh, drop box cost per employee is likely closer to $750k, not $100k.
That $1.5M comp package is about 2-4 employees being laid off. It's not very many people.
It's also insanely low for a CEO, but about right for the CEO of a company in decline (which dropbox is).
Nope, MBAs have to learn exponential growth is impossible to accomplish forever.
Companies should be managed to be profitable, while paying employees and business expenses.
Anything other is a pipe dream that eventually blows up, but since only employees suffer while the MBA guys go to become CEO of yet another adventure, who cares. /s
The myth of exponential growth is not that companies can't grow exponentially forever (since that's the case for most companies) but rather that the valuation of these companies depends on exponential growth (it does not). Most public companies in the United states do not experience the exponential growth many tech startups do, but do perfectly well for themselves, their customers, and their employees.
No one is pushing for exponential growth. If a company wants to stop, declare a dividend, and be done with it, and let investors choose a new rodeo.
Except that isn't what happens, instead every year a new goal that has to be X % higher is set, and when expectations are not met, the employees are the ones landing on the street for stupid values of X%.
The one signing off on X% might even get a bonus for doing that, and enjoy some Bahamas vacations.
In tech sure, but in the market, many companies simply return dividends. Lots of mining stocks, retailers, commodity producers, etc don't experience exponential growth
I have an MBA and am not a CEO. I'm probably better at developing software than you, too.
But, I do get a chuckle out of what you believe is a "diss," when you're actually stating that MBA holders will not only do better in life, but they'll also control your fate.
Keep that narrative alive; I love it!
Like all rules there are exceptions....
Public company CEO pay is almost always paid by shareholders not by the company itself.
It's so misleading that these "CEO compensation is 100x employee pay" stats always get kicked around like it is an apples to apples comparison. It's not.
CEO's get paid in stock which they need to redeem from shareholders. Employees get paid with cash which them redeem from the company's checking account. They are different sources of money.
It's so annoying that this keeps getting repeated, on and on and on. It's totally disingenuous.
The company's checking account also belongs to the shareholders, albeit indirectly.
The remarkable thing is how readily shareholders will accept narratives which give the CEO very large amounts of compensation. The notorious $50bn is a high mark: https://www.forbes.com/sites/antoniopequenoiv/2024/06/13/tes... - but that is very much taking value away from shareholders and handing it to the CEO in huge amounts.
Can pretty quickly see that the CEO comp # in question is not the stock. Houston sold many times more than $1.5m in stock in 2023. The $1.5m is likely direct cash and services.
He owned a huge amount of dropbox before it went public. $1.5M is the money from the company to him (likely including stock compensation).
Yes, but we can all agree that stock/$ is pretty fungible and can be exchanged for goods and services in pretty much the same way. So effectively, it is apples to apples.
The severance packages suck.
COBRA is the single largest expense for departing employees. Industry standard is to offer 18 months, not 6.
Many job searches take longer than 6 months, so employees will be left high and dry right when they need it most.
> COBRA is the single largest expense for departing employees. Industry standard is to offer 18 months, not 6.
Are we in the same industry, where are you based? I got 2 months when I was laid off last year.
I also know many tech people who got just 1 month.
Agreed. "Industry standard is to offer 18 months"!! Please let me know this industry, because it ain't tech where I live!
It's not any industry anywhere. Any layoff thread on HN is people saying what they wish things were but framing it as "this is how everyone else does it this one company is being greedy" when it's not the case 99% of the time.
My advice is to simply go on Medicaid.
When I was laid off in 2023, my mom and aunt told me to go on Medicaid. I thought it was a bit ridiculous since I had already made well above the poverty line, and was planning on still pulling in a substantial amount in the same year despite the lay off (I was laid off in January). I was going to pay several thousand a month for COBRA, and I thought my mom and aunt were crazy, since they are the sort to claim everyone's using welfare (my aunt retired early and is on medicaid, since her income is zero, so I guess she has some evidence to support her claim).
Anyway, so I did look into it mainly for the 'I told you so' aspect, to 'prove' to her that the social safety net did not exist as she imagined it.
However, to my surprise, it did, and within an hour of filling in the form online, I got free medicaid for my kids, and highly subsidized marketplace plans for my wife and I. In my state, medicaid eligibility is based on expected income / week. According to the man on the line from the state, even if I did end up making more, since my expected income was $0 (being unemployed), I still qualified! My wife's premium / month was like $100 (she was pregnant so qualified for more).
I did tell several colleagues about this, but they didn't believe me and forked over thousands of dollars.
In my state, medicaid is superior to my old PPO plan. For one, there is no co-pay and my daughter ended up needing major orthopedic intervention (severed finger) and we paid $0 out of a total cost of $150k. Although you're assigned a doctor, it's still essentially a PPO plan (you can see whomever you want whenever you wanted, so we stuck with our old doctors).
So, please avail yourself of the very safety net you pay for. COBRA is basically always a bad deal. There is almost certainly a subsidized plan out there for you. There's a pervasive myth that the social safety net doesn't exist in the USA and I almost lost $10k (or more with my daughter's incident) because I didn't do the obvious. I also learned that should I ever want to leave my job to start a business, I honestly really don't need to worry about health insurance.
> COBRA is the single largest expense for departing employees.
Life pro tip: Do not use COBRA!!!!! It is almost always much, much cheaper to find an ACA compliant healthcare plan on your state's health insurance market. For one thing the plans will often be cheaper (though with fewer features). For another ACA plans qualify for tax credits, etc and COBRA doesn't.
When I got laid off I made one of the worst financial mistakes of my life keeping my employer's high-deductible plan via COBRA. I stupidly figured it had to somehow still work out to be cheaper than shopping for private insurance. Boy was I wrong! Between the "high deductible" part and the fact the plan wasn't able to qualify for tax credits I overpaid my medical expenses by about $10,000 over the course of a year. Had I gone with even a "bronze" level ACA compliant plan that would have been cash in my pocket that would have helped out a lot while I was looking for work.
The big reason was my medication was like $800/mo. And on my employer's plan once I hit my $3500 deductible it went to $0/mo. This wasn't a problem when my former employer picked up most of the insurance premium for my high deductible plan but with COBRA you are paying the entire premium! And for my use case, medication was my top medical expense so I was paying a hefty premium for a fancy health plan that didn't actually cover my expenses.
A "regular deductible" ACA plan would have made much more sense in my unemployed scenario as the premium was not only lower but the medication was generic and would have only been like a $23 copay!
Always, always bust out Excel and compare the full cost of healthcare on different plans. Compute the total cost of your medications, how & when you'll hit things like your deductible, what tax credits & deductions apply, etc. What made rational financial sense while employed might not make sense when unemployed or buying your own health plan. But you have to find out for yourself. Rarely does it make sense to continue paying your employers health plan via COBRA. After loosing your job you have like a 30 day window to switch plans before you will be locked into your COBRA plan for the remainder of the year -- do not dilly dally around, figure it out now!
Forget ACA compliant health plans. When I was laid off, since my income / week was $0 (Oregon), we just got medicaid for my kids, and pregnant wife, and I paid an extremely modest amount for a solid plan. There is no reason to use COBRA. It's a relic and probably should be done away with.
Please look at your individual situation and don't take this suggestion blindly. If you've already contributed significantly to your deductible or out-of-pocket maximum it can definitely make sense to continue with COBRA.
Also you can game the COBRA enrollment window. You have 60 days from your loss of coverage to elect COBRA and once you elect COBRA you have another 45 days to submit payment. You can elect on the 59th/60th day and then pay 45 days later if you ended up needing the coverage. If you don't need the coverage don't pay.
COBRA can be good if you are on a platinum plan and have a lot of foreseeable health expenses. HDHP COBRA makes no sense at all.
Please check though, because my kids qualified for medicaid despite my six-figure income. The state of Oregon qualifies by week, so even if you made $10 million / year, if your expected income in the week is $0, you qualify for that week (yes, I literally asked them this question, and he said yes, that is how it works). According to our DHS, there is no upper limit on yearly income that would mandate a clawback of benefits received[1] . And in Oregon at least, OHP is accepted everywhere, and is usually better than the platinum plans (no payments taken from users, ever)
[1] As another example, I asked if I didn't work Jan - Nov, and then made $10 million in December, would my kids qualify for mediacid Jan - Nov, and he said yes.
> Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship.
But they always fire the weak employees, not the ones that can easily help themselves.
Maybe we should have some laws that randomize the layoffs ...
they always fire the weak employees
This is definitely not the case. Companies use a lot of different mechanisms to choose who to lay off, and it's rarely entirely performance based.
Arguably from what I've seen it is TOO random or non-performance based.
Some combination of personal dislike and unfamiliarity.
The people making the cuts are not line managers and are sometimes given very short amount of time to make their cut list. So "oh I know that person" stays vs "I have no idea what they do / they asked me a pointed question in a meeting once" goes.
I've been laid off twice, neither time has been performance based.
once i was on a team of 2 ICs and a Manager - only the manager stayed - the company is now about to fold. Other time i was let go as part of the entire US arm
Yes, most layoffs I've seen in my career are of the "mass layoff" variety, and these are generally far from being performance based.
There's just too many people, the decision making is too quick, at too high a level.. and more driven by cost / future strategy (so which teams to cut deeper).
Why would you fire your best and brightest? That would be like throwing out good fruit, when there are spoiled ones.
No, it's a very poor idea to force companies to lay off at random.
We should start with the executives who didn't perform/execute, they're the biggest liability.
This often does happen along with layoffs when a company is in real trouble. A problem of silicon valley culture is that you basically can't fire anyone for underperformance, so you need to have these sorts of layoffs as a prophylactic measure to cull the heard. So that means you get a cycle of "overhiring" followed by "layoffs" and that is working exactly as intended.
California is at will, you can fire anyone for anything or even nothing. I'm yet to see poor performing executives take themselves out before they take out the people that actually create value. You don't need to have layoffs, you need better leaders, and they're the last ones to get culled, usually running off with bonuses for under-performance and lousy work.
This is a joke, right? If a company is underperforming, then the underperformers are the first to go. Market economies require efficiency. Capital flows in the direction of success. Impeding this flow with regulation is a great way to create a malfunctioning economy.
I’ve seen instances where the people with the most seniority are let go first because they cost the company more.
Isn't firing the weak employees the correct long term strategy? Especially with regards to ensuring that the remaining employees stay employed
>But they always fire the weak employees
What you are referring to is called rightsizing and it's taught in business schools, but almost never implemented well. I would guess it's because it takes to long to figure out who's weak and who's not and they are in a hurry to cut costs.
When layoffs are random, it engenders a profound sense of betrayal among those who have diligently gone the extra mile. It severs ties and creates a chilling effect, dampening the morale of those who remain.
Employees, acutely aware that their efforts might be disregarded in the next round of cuts, become increasingly disincentivized to exceed expectations. The result is a workforce more focused on survival than excellence, fostering an environment where mediocrity thrives.
Im not sure if you are sarcastic or not.
If not, I think you have a highly unrealistic opinion of who the company operates for.
It's so cooked. There are just no jobs anymore.
Request: Any tech-recruiters on here who can validate this? I spent a single month in June job hunting (mid-level SWE, DE roles) and it was terrible. Hundreds of applicants per position. It felt like being a fresh-grad again. But that's just my anecdata
We’ve heard from many of you that our organizational structure has become overly complex, with excess layers of management slowing us down.
So we're making more significant cuts in areas where we're over-invested or underperforming while designing a flatter, more efficient team structure overall.
So a lot of middle management getting let go then?
That's been the trend at many companies recently. Cut a middle layer and consolidate.
i wish they would focus on what the users wants instead of making their client more and more invasive, and when I complain about it just explaining that they have a lot of privacy controls and I shouldn’t worry about their invasive client.
i would love to use dropbox over icloud, but I just want a drive that works and a way to turn off all their weird features.
I don’t know how but over time all the “new fangled” tech companies have the same approach to hiring. They just keep growing headcount as its own workstream. Google started it I think, their HR just interviews and grabs the talent without a need. Matching employees to a role that already got hired to a company is just insane. That is the reason why I never interview with anyone that wants to do a generic hire. These HR folks are purely assessed on how many they hire and so they keep hiring.
This just makes me respect the old school processes that apple and nvidia follow that much more. They are the best run companies in tech
Meanwhile the S&P500 is up _23%_ this year, so all of this talk of "difficult economic times", "headwinds" and all the rest, is bullshit, plain and simple.
What the tech mass layoffs have shown is that it's good for the share price and good for increasing profits (not that there wasn't decent profits before, but you know the one thing that's better than profits? more profits!)
Every large company has to divert money away from labor so they can spend $B on the AI arms race (Dropbox is now "AI powered" of course).
It's like how in the US we lament how the government can't afford to take proper care of its citizens (you know, basic things like universal healthcare, education, etc.) while spending $750B a year on the military.
It was never perfect by a long stretch, but the past 10 years I've progressively gone from disillusionment to disgust with the tech industry in a broad sense. They're no different than the oil and railroad tycoons of the late 19th century, just with better window dressing.
Larry Page and Sergey Brin control over 51% of all votes at Google. Similarly, Zuckerberg controls over 60% of the votes at Facebook.
I took a look at https://www.opensecrets.org/ and surprise surprise, Google and Facebook were major election fund contributors to Silicon Valley representatives, like Ro Khanna. This tells me who really holds power.
It's like how in the US we lament how the government can't afford to take proper care of its citizens (you know, basic things like universal healthcare, education, etc.) while spending $750B a year on the military.
It's not the government can't afford, it's that we aren't willing to allocate. The US is an incredibly wealthy country after all. We can unlock even more wealth if there's political will to fix how we do urban planning.
Also, we have military commitments around the world that underpins the global order. Decades of underinvestment in our defense industrial base and unneeded military adventures had led us to be woefully underprepared for our current security environment.
That last paragraph could have been taken directly out of the defense contractor lobbyist handbook. Congratulations.
Seriously -- we don't have military commitments to "underpin the global order". We have military commitments to "protect our political and economic interests" -- and who do those benefit? The American people? Nah, not really. But the American people are the ones footing the bill for it, choosing to reduce our own quality of life in order to exert power over other nations (and invade them at will).
Seriously -- we don't have military commitments to "underpin the global order". We have military commitments to "protect our political and economic interests" -- and who do those benefit? The American people? Nah, not really. But the American people are the ones footing the bill for it, choosing to reduce our own quality of life in order to exert power over other nations (and invade them at will).
Of course, it's our political and economic interests. We're a hegemony. This is not controversial. Unless you want China and Russia, the other two nations on the permanent security council, deciding what goes. That would be not for the benefit of the American people, but for their benefit.
Beside, it's not like there's a lack of spending in healthcare. Our healthcare spending is very high. According to wikipedia, it's something like nearly 18% of GDP.[1]
Universal healthcare will probably reduce how much money we spend on healthcare and making it affordable for everyone while improving health outcome.
It's a false dichotomy between military spending and our domestic needs, and the government is always in charge. You should read about the last supper and the peace dividend. The government downsized spending after the cold war and now we have a less robust defense industrial base. Some form of downsizing is inevitable especially if we want to reap the peace dividend but it's clear that we had gone too far in the way we downsized.
1. https://en.wikipedia.org/wiki/Health_care_finance_in_the_Uni...
You've drunk the hegemony koolaid, my friend.
Fair point. Let's look at profits then. Net profit margin across the S&P500 is 12%, a YOY increase.
How is net profit margin calculated? Some weighted average or is it net profit of every company divided by revenue of every company?
Not sure if it is relevant but after firing 500 people, the stock price is almost up by 2 dollars between 29th and and 30th October.
Next - we have to raise our prices.
Probably lazy money invested for gains takes its toll on the rest of the society.
You are welcome to start a business that competes with Apple/Alphabet/Microsoft/Amazon, and see if you can survive without raising prices or making bets that may not succeed and cause you to fire people.
This happens because of the culture of "if you dont spend your budget it gets cut"
Per Google, Dropbox had a net profit margin of 17% last quarter. Are they really hurting that badly that they have to lay off 20% of the company?
For a software services company, that margin is pretty low.
Google rule of 40
Took the responsibility right to his bank account.
> As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change.
Ah yes, there it is. Maybe roll yourself into the 20% at least.
Makes sense and was only a matter of time considering it has essentially no revenue growth to date this year and Non-GAAP margins in the low-to-mid 30's %. With near-0% revenue growth, investors will expect a SaaS company to post 40%+ margins.
Just plain capitalism. They hire fast when everyone else is doing it and shedding workers when doing so is the norm.
So what? If they didn't hire fast, those 20% wouldn't had the job(s) in the first place. Stupidity worked in their favor. Same at Twitter.
Edit: I guess that's basically what you are saying. The other comments confuse me!
> As CEO, I take full responsibility for this decision
CEOs need to not say this, unless they're quitting too.
Ah that sucks, I wanted to work for them a while back
This is the first wave of the LLM layoffs.
That's quite unlikely. If Dropbox could save a decent amount of their engineering effort using LLMs with 20% less people, then they could also increase their engineering effort by a decent amount using LLMs and keeping the same workforce. Assuming the team aren't completely useless, being able to go faster would be significantly more valuable than any cost saving made here.
Incredibly disappointing, but not surprising. Dropbox is no longer in its growth phase, and needs to settle into maintenance mode - enjoying a steady stream of revenue while continuously optimizing expenses, with a bit set aside for R&D to try and find the next big growth opportunity. Severance packages look really good, with the caveat that these figures really should be _the default_ in Corporate America at this point, like our EU peers.
I just wish the language in the announcement reflected this reality. Instead, it feels like a lot of desperation measures from current tech companies: overly optimistic to the point of naively dismissing or ignoring reality, and believing that if we just keep building then we’ll continue to grow forever.
Honestly, this doesn't strike me as a bad layoff announcement, with one caveat.
I’m writing to let you all know that after careful consideration, we've decided to reduce our global workforce by approximately 20% or 528 Dropboxers.
Should be replaced with
I’m writing to let you all know that after careful consideration, we've decided to reduce our global workforce by approximately 20% or 528 people.
You should never use your pet names for employees in a layoff announcement. It makes an otherwise serious announcement seem tone-deaf.
The employee pet name shit is just really tired at this point. It's as bad as the job postings still looking for Rock Stars or Ninjas or whatever.
They're not Dropboxers, they're not associates, they are employees. Pretending otherwise is foolish on both sides.
Dropbox was where I first encountered the infantilization of the workplace, with animated emojis all over your biannual performance review. It was a shock, having come from a real company run by adults. Now everyone thinks this is normal, at least at companies that use Slack where 40% of the traffic is animated emojis.
It's to remind them they are beloved "Dropboxers", and are part of the family... before terminating them.
I've never been a big fan of any such language, regardless of layoff context. Do enough people prefer it that it's actually a net win for business by way of improved morale or whatever? I wonder if it's been seriously studied.
Then again, I'm also of the mind that email addresses (or whatever other contact methods) ought to belong to functional areas/positions rather than to people (other than for person-specific topics such as time off, personal development, etc.) so turnover doesn't lead to questions of where to send questions/requests. I assume this is an unusually inhumane outlook!
From an organizational psychology perspective I'm sure it tests well that's why they do it
So beloved that they're willing to sacrifice them on the alter of stock price
I agree it's actually a well crafted layoff announcement. I wouldn't even faulting for using Dropboxers. If layoffs have to happen there are much worse ways of announcing and implementing them than this. Still very unpleasant if you're affected... (been there...)
It is my observation that most unicorn execs become tone-deaf and out of touch very quickly. Something about human nature.
Don't want to remind other workers that they share something with these workers. Solidarity can be contagious.
Responsibility would be the CEO also taking 4:1 odds on retaining his job.
It's clear they are preparing for an acquisition. They are profitable with great gross margins and cash in the bank. With 20% workforce reduction they are going to be very attractive to the salesforce of the world.
Spineless executives with their corp speak - they're layoffs.
Should companies reduce salaries instead?
This is a stack ranking layoff. They will fill the roles with new roles to teams they believe are more vital to achieving company goals. Pretty much every tech company has operated this way the last couple years. They’ve fired 10-20% and have replaced all those heads pretty much across the board.
and then after the first full clock cycle, middle managers are hiring people to fire them, to keep their core dev team intact so that it can solve problems that take longer than 90 days
It seems that after the rampant hiring spree in the 2020s, it could benefit some business leaders to implement 'Founder Mode' in their organizations.
Surely that should fix things?
Anybody from Poland will be layed off?
Dropbox makes over 600 M per quarter and about $2.53B per year. They dont need to do layoffs. This is a choice to desctroy jobs to temporarily enrich shareholders to the detriment of the company itself. Classic short-term decision making. https://stockanalysis.com/stocks/dbx/revenue/
How is it to the detriment of the company? I've been a dropbox subscriber I think since they launched. Over the years they've added some nice features here and there, but I feel like at this point they could scale all the way back to server admins and sustaining engineering and be perfectly fine. This is another case of I can't imaging what all of those people actually DO day to day.
Financially, perhaps not, but maybe the product is now done? I mean, what more can you really add to the service at this point? There is still work to do with maintenance, support, etc. but that doesn't require the same level of employment as when you are still building.
> We continue to see softening demand and macro headwinds in our core business
In plain English it means sales are crashing with no change forecast in the immediate future.
I expect to see more of this as companies see their disappointing revenue projections as we approach a common end of FY.
Kind of crazy that Dropbox has 2600 employees no? What do they all do? Isn't Dropbox finished?
I guess there's a very small number maintaining the core Dropbox stuff and most of them are working on speculative projects to increase revenue (e.g. this Dash thing they mentioned)?
> Kind of crazy that Dropbox has 2600 employees
No, the HN consensus is they are massive geniuses for moving out of AWS. Nobody here ever accounts for the extra datacenter, hardware platform, hardware ops, infrastructure ops, etc.
I'm sure that they did their research before making the big move.
What kind of argument is that? Everyone does their research, that doesn’t mean there aren’t bad (and even stupid) choices made.
TIL that nobody knows what they're doing.
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.
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.
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.
That's definitely not something one can say about their BigTech competitors.
>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.
> 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.
They could also be reducing their workforce because they decided to for human reasons and their value might go down by more than the cost savings.
How is my comment uncharitable?
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.
The problem with DropBox is that it can't really compete with Google, Microsoft, Adobe, Amazon Drive, etc. It's too narrow of an offering.
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.
I never said you personally are their ideal customer profile.
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.
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.
> 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.
> Companies' need for people grows quadratically in proportion to the amount they are trying to do, not linearly.
That's fine. The question the poster raises is how come they have 500 over the number of people they need, if the amount of work wasn't reduced.
As a proxy for amount of work, we can take Dropbox revenue: https://stockanalysis.com/stocks/dbx/revenue/
If those people were needed but now aren't, does this mean Dropbox plans to do less "units of work" and decrease its revenue?
I think a more convincing argument is they overhired even when taking your argument into account.
> 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.
Are their targets reasonable? Or are they reaching for fundamentals that don't exist as a storage utility?
(Dropbox customer, pls just sync and store my data reliably)
Edit: Reply was as I expected, thanks bhouston, agree they are potentially at the mature stage
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.
Yeah, I just had a look at dropbox stock. I would have expected permanent cash hemorrhaging, but no they have a P/E of 15.
That is actually quite good. I am surprised.
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?
100%. Doesn’t even have to be zero growth - just growth less than investors want to see, as implied in the P/E ratio (since investors control the P).
> 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.
Maybe they developed all the features they thought were necessary and now can manage the features with less workforce.
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.
Or they hire Accenture.
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.
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.
I wonder how many staff they need just to keep the lights on. I bet it's not more than a tenth of what they have now.
> 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.
source: https://www.economist.com/news/1955/11/19/parkinsons-law
> 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?
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.
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.
> 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)
Most companies have a bunch of people who are literally doing nothing.
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.
> 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?
One of my dad's anecdotes, back when he was alive, was when he was interviewing someone for a job.
"Why did you leave your last position?"
"After six months, management noticed my entire floor was doing the same thing as the next floor."
This is literally every startup I've ever worked for. Grow before you need to, constantly expand your market. This is like 101 stuff
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
I mean, imagine that you are leading a team of 4 people.
Are you sure that you will always be able to accurately tell if you need a fifth person or not?
Or you have a team of 5 people. Can you tell if you have a one too many?
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.
> how do you end up having more than 500 excess people than what you need?
Not sure if you are serious or not, but understanding the output of knowledge workers is a famously difficult task.
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.
What is a fiefdom without serfs?
> 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?
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
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.
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.
Labor = KPIs not People.
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.
>many hands make light work, but
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.
> 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.
Time is the resource that you cannot recover.
> 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.
IMHO, that's both disgusting and abusive.
> 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.
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.
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.
> 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?
"As CEO, I take full responsibility for this decision" Oh hey another one that takes responsibility by taking on 0 consequences.
Remember Gavin Belson?
"But make no mistake. Though they're the ones leaving, it is I who must remain and bear the heavy burden of their failure."
Was that the same scene where he said "Their failure is my fault...for trusting them."?
I just about had to change my underwear after that scene.
The setup leading to that phrase... brilliant.
https://www.youtube.com/watch?v=u48vYSLvKNQ
same vibe: https://www.youtube.com/watch?v=hiKuxfcSrEU
so accurate it's scary
There was so much that was disgustingly spot on in that show.
Unpopular opinion, but I don't understand this type of comment. It sounds like people want executives to get some kind of punishment or pain as a consequence of laying people off.
But what would that even look like? A fine? That would probably make no practical difference, and would discourage them from making changes that need to be made. Fire them? Then you would probably get a worse decision maker in the driver seat going forward, who also didn't learn from experience of going through layoffs.
Layoffs are awful. They affect lives and families deeply. But all businesses don't go up and to the right forever. Reductions are a necessary part of running competitive companies.
> But what would that even look like?
> Iwata ran the Kyoto, Japan-based video game company [Nintendo] from 2002 until his death in 2015. To avoid layoffs, Iwata took a 50% pay cut to help pay for employee salaries, saying a fully-staffed Nintendo would have a better chance of rebounding. [0]
[0]: https://www.cnbc.com/2024/02/13/nintendo-ceo-once-halved-sal...
By taking that pay cut, how many employees could Nintendo keep that would otherwise have been fired? 5? 20? Certainly not in the hundreds or thousands. This just seems like virtue signalling.
Edit: to expand on my point re virtue signalling: the article states the CEO took a salary cut, not total compensation (and it doesn’t elaborate on the value of the cut). Salary is a small fraction of CEO total compensation - the bulk of which is stock based, and even in the event that stock grants were also cut, the CEO surely already had significant stock. Cutting a relatively small component of compensation in order to boost the stock price which disproportionately adds to the CEO’s personal wealth seems like virtue signalling to me. If the CEO said “shareholders be damned, morale and culture are all that matters in the long run, no layoffs etc etc” that would seem more meaningful.
Optics matter. When a CEO approves mass layoffs, and ALSO approves a 60% salary increase, I can only conclude that the CEO is nothing but self-interested. Rewarding yourself for firing a statistically significant percentage of your company SHOULD indicate failure, not success.
I feel like this would be the few times where virtue signaling is probably a benefit. It can make all the people in the company feel like the leader is on their side, and maybe make the employees less resentful and be more productive.
It may signal virtue, but it has direct, practical, beneficial impacts on the company. I don’t see why that would be virtue signaling.
What would someone need to do in order to avoid being reduced to a virtue signaller?
It shows the rest of the staff that you actually are taking responsibility.
In 2021, the average S&P 500 CEO made 324 times what their company's average worker made [0]. The widest gap was at Amazon, with Bezos making over six thousand times as much as the average worker at his company. The report is from a few years ago, since then the gap has increased further. So yes, many companies could trivially retain hundreds if not thousands of workers simply by cutting the CEO's pay.
[0] https://www.businessinsider.com/these-20-companies-have-bigg...
In this specific case, don't we exactly want the CEO to signal virtue to the company and employees ?
Taking a massive pay cut isn't "virtue", it's a direct and measurable sacrifice. Just because you don't agree with the position or outcome doesn't make it "virtue", I'd wish people stop using that word for things they disagree with.
5 or 20 workers (and their families) who don't get jerked around for stuff way outside their control is an absolute win.
Right now, there is no actual downside for executives. Just less upside. Did they earn XX Million this year or XXX Million. Some tangible downside would be nice.
I mean, heck, why aren't they fired? And really, it's more then middle management where that'd make a huge difference. If bad performance led to actual shakeups in the entrenched middle management, we might actually see business practices change rather than continue on through the established fiefdoms and petty corporate politics.
Virtue signaling actually works, people wouldn’t do it otherwise. ;P
This is probably the best answer in terms of what people want to see, that would also still give the company the best leadership going forward.
If the CEO taking a paycut materially reduces the size of what would otherwise be a large layoff on the basis if reduced cost savings, the CEO was way overpaid to start with. (And it probably doesn't change the number of people the firm can usefully employ under changed conditions, even if it provides cost savings, because the latter is based on whether employing them makes more money than it costs, to which external cost savings are probably mostly irrelevant.)
It should be added that layoffs are not commonplace in Japan. What you'll see instead are bonus cuts and salary reductions (at most 20 percent). To do US style layoffs you would need to show that the affected department was directly involved in a line of business the company has abandoned. If this isn't the case the employees stand a good chance of successfully suing the company in court. And then there's the reputational damage which would be considerable in a country where lifetime employment is valued.
In other words this kind of behavior wouldn't be viewed as all that surprising locally.
100% agree, but the opposite is what happens.
Mass layoffs -- unless the company is actually tanking and on its last leg, which isn't the case with any of the tech companies who have been doing this recently -- cause the share price to rise. CEO pay, or at least bonuses, are often tied to the share price.
So a CEO is rewarded instead.
To put salt in the wound, my understanding is the research on elective layoffs (ones that aren't forced by circumstances) indicates the outcomes are mixed at best, leaning negative.
So all this crap is just cargo-culting our current management paradigm, and/or execs cooperating to suppress wages and weaken labor, which had gotten a bit too uppity after Covid (that's one thing waves of layoffs like this do accomplish).
Probably: just leave out the full-of-shit sentence...
There's an Indonesian joke based on the word "responsibility" which is "tanggung jawab". "Tanggung" in this context means to carry the consequences, and "jawab" is to answer. One can say to a friend "We have to share this responsibility. I'll do the answering, and you'll do the carrying of the consequences."
It's simply pointing out that "I take full responsibility" is empty, meaningless rhetoric and serves no real purpose.
It's often offensively insincere.
I think a start would be to stop saying the phrase “I take full responsibility for this decision” if you aren’t also publicly taking a pay cut.
There’s no need for a CEO to bring themselves and their feelings into the conversation. It’s this weird attempt at empathy that fails, because the CEO isn’t making any sacrifices.
Just say that there are layoffs. Most rational people who have been in any business for more than a few years recognize them as an unfortunate part of the business cycle.
Agreed. But just say that. No need to pretend taking responsibility, which is defined as facing consequences when things go bad.
“As CEO, I’m truly sorry to those impacted. But I strongly believe that this change is what is needed now to make sure Dropbox can thrive in the future.”
Makes sense. "I take responsibility" conveys that they will also suffer consequences, which isn't true.
"I'm the sole person who made this decision" is probably closer what they are trying to say.
"Unpopular opinion", sure, how brave of you.
Simple: they sure love to talk a big game about responsibilities and taking responsibilities. Until it's time to actually do it. For the good of the company of course (if the company is in such dire straits, as the most highly paid employee - and probably not the hardest working one - why don't you take a big pay cut? For the good of the company of course).
That's what people don't take well.
It's amazing this still has to be explained.
> It sounds like people want executives to get some kind of punishment or pain as a consequence of laying people off.
No - as a consequence of poorly planning cost controls. It's not that the people don't need to be laid off for the health of the company, but that the executives who made the bad decisions don't get the boot along with them, in favor of more cautious or frugal leaders.
> Fire them? Then you would probably get a worse decision maker in the driver seat going forward
Why?
> who also didn't learn from experience of going through layoffs
That's actually a valid point. We don't commonly fire normal employees for mistakes. The counterargument is CEOs aren't normal employees.
Yeah I'm not sure people with compensation well into the millions get to go "haha, sorry, still figuring this out!"
Cool, can we pay you intern wages then?
[EDIT] To make this a bit more substantive: I think this is a sign both that we need to stop with this whole professional-managerial-class horse-shit, promote people who know how to do the actual work of the business, and reduce exec wages because the job's simply not all that damn special and the comp shouldn't be so high that only godlike-perfect performance could possibly justify it, because in truth nobody's that good at it.
Step one of this would be reducing M&A activity (hellooooo antitrust enforcement) and reigning in the power of finance, since letting Wall Street suits put their HBS frat brothers in charge of everything is at the heart of why this stuff's how it is.
Preach! The job is straightforward - lot of these decisions they make are very clearly articulated by LLMs. We need more businesses, more competition, not bigger businesses.
I think it's an outlet for general frustration with the justification for high executive compensation (and returns on capital, for that matter) often being "they have much more responsibility and risk" when the actual downside is typically nonexistent, and even if there are consequences, the outcome is something like "LOL still richer than any ten of you combined will ever be", i.e. the "risk" is all fake.
> "they have much more responsibility and risk"
Perhaps you've misinterpreted that statement? It is the board that takes on greater risk with executives as compared to other employees. The executives are given the keys to the kingdom, which means only an exceedingly small group of trusted individuals can be considered for the job. By the transitive properties of supply and demand, when supply is limited, price goes up.
The thing is, high executives have become a self-perpetuating class entrenched in corporate boards, this is the reason CEOs comoensation keeps skyrocketing, not supply and demand. And this entrenchment obviously also stifles accountability.
How does this self-perpetuating entrenchment not become a factor in what establishes the supply and demand, instead managing to exist as something off to the side?
They say "I take responsibility" and then.. don't take any responsibility. It's insult on injury.
How big of a bonus will this CEO get this year? Last year?
Why do people understand this phrase "taking responsibility" as some kind of admitting of fault? Maybe I'm missing something, but it seems neutral and could even be referring to positive future outcomes for the company.
Because the context is that 20% of their employees are now unemployed. The tone of the letter is also "this is a hard but necessary choice" and not "this is great news for dropbox!"
> As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change.
I think Houston being a cofounder means the financial picture looks different. Last year he made $1.5M in total comp. Which is a lot in absolute terms, but cutting his pay to zero would only allow keeping ~6 of those laid off. OTOH, he owns 25% of a $9B company. His salary is a rounding error compared to the performance of the stock.
Not to be an apologist, but I bet Drew really does feel responsible. He’s not professional management, and he always acted like Dropbox was his kid, at least from what I saw working there. I’m sure this feels shitty to him, though it’s obviously worse for the people laid off.
True - it means he could transfer, say, a billion dollars worth of stock to the affected employees and still be a billionaire. If he actually felt all that bad about it, of course.
The point is words mean nothing from the C-suite, and are just tools to accomplish whatever labor/public relation goals they have.
You can make money by either reducing head count or coming up with plans that involves generating more money with existing workforce.
Obviously you as a CEO failed at doing second.
Now question is do you fire yourself and try to get a better CEO or you choose to fire 20% and generate more profits.
If it's up to the workforce they probably choose to fire CEO. But if it's upto the CEO he choose to fire the 20%.
Taking a hit on their giant salary seems completely reasonable to me. Having skin in the game makes people perform better in all sorts of cases, and I don't see why a CEO would be different.
Do you also object to sales reps or athletes making less money after a long period of performing poorly?
Yeah that opinion is unpopular because it's deeply stupid.
“you would probably get a worse decision maker in the driver seat going forward, who also didn't learn from experience of going through layoffs” or you would maybe get a better decision maker who didn't have to layoff — or hire unnecessary — workers in the first place? Ridiculous speculation.
Responsibility without consequences just means failing upward. That's why we have a gilded executive class of people who are barely qualified to run a local Taco Bell franchise.
People come in two flavors: conflict theorists and mistake theorists.
Conflict theorists think that every event is a result of power struggler. So if someone gets hurt, someone must be punished for that.
Mistake theorists think that the world is complex and sometimes bad stuff happens because most people operate with good intentions most of the time. Often, that means no punishment needs to be metted out.
To mistake theorists, conflict theorists look like ideological blood thirsty savages. To conflict theorists, mistake theorists look like enemy troops.
This is a gross oversimplification but it always shocks me to see how much more conflict theorists there are on hn now than before. So many comments here blaming the CEO or capitalism, most of which are going off extremely scant information.
> But what would that even look like? A fine? That would probably make no practical difference, and would discourage them from making changes that need to be made. Fire them? Then you would probably get a worse decision maker in the driver seat going forward, who also didn't learn from experience of going through layoffs.
Well they're the one asking to "take responsibility" here, the fact that they claim responsibility yet nothing happens is exactly why people don't like this phrasing.
Also who the fuck else can be responsible anyways ? The cook ? The guy who mops the fucking floor ?
Yes, sometimes reductions are necessary. However, layoffs isn't the only way to reduce variable costs.
yeah, taking a personal financial hit on this would go some way to at least pretend to actually have tried preventing it. Not sure about this particular CEO's salary, but I wouldn't be surprised if you couldn't finance a few engineers' salaries by cutting the CEO's, without it even hurting very much.
Not saying it's enough, not saying that's the only way, but I find it peculiar that this seems to be unthinkable.
Why can't the executive taking responsibility also take a pay cut and tighten their belt the way they expect the company to and the people who they've fired do?
> It sounds like people want executives to get some kind of punishment or pain as a consequence of laying people off
Um... yeah. Yeah, that's pretty much exactly what I want.
I used to work at a Dairy Queen. One dude there had been working there for a couple years. Unfortunately, one shift his drawer came up a dollar short. Our cutoff was 5 cents - a nickel - over or under. He was immediately terminated, of course.
He cost the company one dollar. A Dairy Queen cashier making minimum wage is held to a higher standard of accountability.
A CEO should not be rewarded for recordbreaking layoffs with recordbreaking pay raises.
It's the grey goo of manager-speak. It rides both sides, but never truly picks one.
The other two options: blame employees(someone not you), or take some form of punishment as an individual.
I too do it sometimes, and I feel bad each time. I at least tell people what it is and that it's just the reality of the situation. I'm not gonna commit career suicide and jeopardize my family's livelihood but I also won't blame them. So I follow the meaningless middle road where the status quo mostly stays and we all at least learn from it.
Ah, you're only going to endanger the livelihood of your employees' families, most of whom have substantially less wealth than you. I bet the rest of your employees don't really care that you "feel bad."
At least they learned not to trust you, though.
Genuine question: what do people want from a CEO in this situation?
What consequences do you want the CEO to face? A token reduction in pay? Being fired?
The latter. If you can not manage the company correctly and it leads to the job losses of hundreds of people not to mention the millions in salary that was wasted by their poor planning then yes they should be immediately relieved and not allowed to run any other company. They are clearly incompetent.
Considering dropbox is not facing some economic recession outside of its control we can only blame the CEO's incompetence.
I don't really get why layoffs mean that the company was not managed correctly.
Let's say you believe you have an opportunity that will double the value of the company, with a 30% probability, or cost the company 10% of it's value. This means it has an expected value of +21%. This is pretty good, and exactly the sort of thing shareholders want from their management. So you increase headcount and pursue the opportunity.
In the 70% scenario when that doesn't work, you have to downsize. Failure is not just possible, it's probable. That doesn't mean that the CEO mismanaged...they may have, I don't know the Dropbox details. But in the scenario where they haven't mismanaged, what do you want? Do you want companies to never take these risks in the first place?
> I don't really get why layoffs mean that the company was not managed correctly.
Probably the part where they very directly attributed the layoff to mismanagement.
> We’ve heard from many of you that our organizational structure has become overly complex, with excess layers of management slowing us down.
> [We're] designing a flatter, more efficient team structure overall.
When they hire as part of the push for that 30% chance, are they telling them that they have a 70% chance of being laid-off if the bet doesn't pay out?
If it's "just a bet" and not mismanagement, then we should tell people that, shouldn't we?
The reality is that these bets are only bets for the people getting hired/laid off, and they don't even know they are betting in the first place. Even worse because we're not talking about simply losing money here. Losing a job is many times a life changing event in real people's lives. It's not like someone betting on a stock.
That's why there should be consequences for the ones making those decisions. They get the most rewards, but none of the punishment. How's that fair in any shape or form?
Most big tech companies did mass layoffs in the past few years. They are now fully recovered and posting record profits this week all with the same leadership. You are saying they are incompetent and someone else could have navigated this better?
Those profits could've been even higher if they hadn't overhired, then paid out massive sums in severance.
A company's profits will, without exception, be lower if they never take any risks.
Yes, they could have just not fired the people and have ridden the AI wave all the same.
Do you genuinely believe that the record profits are due to the layoffs, and not just because we just lucked out to enter a new bubble?
Yes, fired. Just like a head coach of a sports team.
It's always amazed me how much leeway and clemency leadership gets. I worked at a company that was always fairly intentional about their performance review process being a meat grinder, and they also did something that didn't look nearly dissimilar enough to good ole microsoft forced curve / stack ranking.
So if you were an IC and were on a project that failed (or even just didn't succeed enough), God help you. Many folks just quit when they saw a project going sideways, or tried to escape/transfer. Alternatively, people would report green statuses and hope someone else fell over first so they wouldn't be the root-cause.
Obviously this caused many problems. It was very hard to execute projects with lots of people or teams, and/or that took a long (>3mo) time. It came to a head when finally a major initiative missed another deadline "just barely" and it finally tripped circuit breakers and someone went in and did a full Inquisition. Yeah no the project was f'd and they basically just gave up ("pivoted") to an adjacent goal. Their official diagnosis/RCA was "people were too scared to report red, so everyone prettied up their status reports a bit, and that was compounded by each roll-up status report also prettying up the status.
Literally no leadership changes happened as a result of this. Then I got laid off. (Unrelated, just the big layoffs of 22. I was not directly involved in this, I was in big data and this was all happening in the main product infra stuff).
So yeah. Your project fails? Bye. But your f'd up performance grinder culture causes literally hundreds of people to behave so out-of-alignment with the actual company goals? Nah man stick around for 2 more years and leave at your leisure over some other petty squabble.
So head count can only ever go up in a company, never down, regardless of circumstances?
People make mistakes all the time, hopefully it's mistakes they learn from. You can't simply fire someone for being incompetent, unless it's so bad and beyond the pale.
> You can't simply fire someone for being incompetent
Lmao what? Outside of being absolutely skint and unable to make payroll, that's pretty much the only reason to fire someone (I mean other than misconduct, which is also a type of incompetence)
The other reason to fire them is that their services are no linger needed (ie a layoff)
What if managing the company correctly requires hundreds of people losing their jobs?
I understand the anger in this scenario as employees, but I don’t think doing layoffs means leadership is clearly incompetent. Running a company is hard.
Doing layoffs definitely says something about the company’s values and current standing, but I don’t think it necessarily means the CEO is bad.
> What if managing the company correctly requires hundreds of people losing their jobs?
It occurs to me that there is no failure of performance a CEO can produce and be held responsible for. Are these CEOs really so irreplaceable that when they bet incorrectly they can't be replaced?
20% of employees have been fired. The CEO directly cited mismanagement as the cause. And yet, its impossible to fire him because "its a learning experience" or "think of the upside!".
A CEO being fired does not mean the company falls into the abyss. The company still exists and can hire a new CEO. I'm certain there are plenty of fools more than willing to risk the livelihoods of 20% of Dropbox's staff in exchange for a mansion in Miami.
The same consequences that a person lower down the ranks would have.
For example, if I lead a team that fails, the team will be disbanded and I will be either fired or demoted. (obviously if there are external factors I/we might be reprieved )
If the CEO leads an aggressive strategy that doesn't playout, they rarely get fired and certainly don't get demoted.
At a minimum, don't say "I'm taking responsibility" when you aren't facing any consequences whatsoever. If an executive wants to talk like that, they best put skin in the game. Otherwise, shut up.
Meaningful reduction in pay, especially stock.
If they overhired so much the CEO has wasted a ton of shareholder money. Pay for performance, right? Perform poorly, you should expect less pay.
He should be fired.
If the company miscalculated, or mismanaged, to the degree that it suddenly has to cut 20% of its workforce in order to survive (or give shareholders what they want), then yeah, that's a pretty big mistake, and your head should be the first one to roll.
I bet you'd have a lot fewer CEOs calling for mass layoffs.
Step down. Forfeit stock/options/golden parachute.
They should face the same consequences as the people they are firing. Lose their health insurance (or pay COBRA), have a few months' worth of expenses in the bank, have to find a new job, that kind of thing.
I suspect you wouldn't see these comments if CEO pay was on the same order of magnitude as the people who actually work at the companies they run. Watching someone treat your livelihood like a toy, while also being rewarded with more money than any person will ever need, is a bit grating.
How about not getting a bonus? Last year he got around $1M in bonuses.
I ask this myself. What is the point of both doing layoffs, and then also firing the CEO? That next person will probably be worse, won't have the learnings of the layoffs, and would probably increase chances of layoffs happening again.
I expect interns to learn and CEOs to lead. If your decisions lead to mass layoffs then you need to lead the way to the unemployment line.
Something like this, maybe?
https://www.cnbc.com/2024/02/13/nintendo-ceo-once-halved-sal...
I mean, this is actually taking responsibility for your decisions as CEO.
50% pay cut
putting an employee elected representative on the board
negotiating the layoffs and severance with employees (e.g., giving folks the opportunity to voluntarily take layoffs to reduce the number of involuntary layoffs).
Whoa whoa whoa, he’s only taking responsibility for the decision.
... and the circumstances that led to it!
Word. If CEOs were to actually take responsibility, they would fire themselves.
While still titling it “A message from Drew”
I mean yeaaa... it's just work. In big corporation. What do you expect from them? He will get bonus for "savings".
Resign? That's the obvious answer right?
I take full responsibility for completing task assigned to me. So resign?
Yes! He failed.
What consequences would you like CEOs to take on when they have to do layoffs?
Resignation. If they made a big enough blunder to need to lay off 20% of their staff, they're not capable of leading the company.
Why do we think they'd do any better next time if there are no consequences to their poor leadership?
Why is it a blunder? Do you think only poor CEOs face downturns or overhire?
And if a company hires too many people for a few years and then right-sizes, isn’t that better for the economy overall than if they simply stayed small the whole time? They still paid salaries for those years and added to the overall level of employment.
Do you want a system where CEOs are hesitant to hire? Or where they’re afraid to right-size the workforce and instead run the whole company out of business?
There’s literally zero logic to your position, just feelings and Monday morning quarterbacking.
Have you ever managed a complex, dynamic, changing system and found that the optimal size based on current conditions was 20% less than it was at some prior time?
I can think of all sorts examples.
Why can't the CEO share the fate of laid off employees? They did nothing wrong either.
By that logic, Mark Zuckerberg is a poor leader and should resign. I think most investors would disagree with that assessment.
Maybe he should, Meta's main product has peaked in their biggest markets, and his last massive bet went nowhere. He may not be the right person to lead the company at this point.
maybe antiquated, but seppuku is considered honorable
Your right. He should commit ritualistic suicide by slashing his belly with a short sword.
Stack ranking is back masquerading as (bi) annual layoffs
It's more fun now though, because instead of being tied to individual performance, you need to make sure you're on a product team that is going to survive the cuts.
That was actually the norm prior to 2010. Tech was never supposed to be a stable career due to inherent innovation risk
Also prior to 2010 you wouldn’t be a senior engineer after 3 years of experience making $180k/yr. The staff and principal engineering roles paying <$100k are still super safe jobs
Good lord, the number of people defending the poor poor CEO is staggering. Do people have any idea of how much CEOs pay has skyrocketed in the last decades in the US?
He makes $1.5M.
That's like 2 L7 jobs at Facebook.
How much do you think he should make? $100k?
He's worth $2B because he co-founded the company and the value of the company has sky-rocketed.
Not because he paid himself $2B of corporate profits.
$1.5M for a CEO is actually not much - because why get paid that much when you're already worth $2B?
The median for a Fortune 500 is $17M.
I don't think people care about the CEO's compensation, I think its just getting old seeing these companies treat hours of labor as KPIs and not what labor actually is, people.
Mom and Pop businesses have to be careful when hiring because if they have to do layoffs they will be penalized by the office of unemployment insurance, and could make their rates soar to the point where they won't be able to hire again when things change. These consequences prevent mom and pop businesses and other mid size businesses from playing fast and loose with the people's livelihoods they provide. These tech companies budget in the severance, never even deal with the regulatory agencies that are meant to prevent this type of fast and loose hiring. I think companies like Dropbox and others need some sort of regulatory oversight in regards to how they hire and fire (if they are going to keep this pattern of hire and fire every cycle).
>As CEO, I take full responsibility for this decision and the circumstances that led to it, and I’m truly sorry to those impacted by this change.
But I will be glad to see that my salary and bonus increased a bit this year :)
Crowded space, macro headwinds and too much middle management. It was difficult to foresee in 2020, but regarding the macro headwinds (elephant in the room) perhaps some billionaires should adjust their donation patterns:
https://www.forbes.com/sites/michelatindera/2021/02/17/here-...
I’m 22 and work on a 3-person team so it’s hard for me to imagine why a company would more than 4 or 5 total employees.
Software is complicated. If you keep writing new functionality, maintaining it slows down your ability to write more new functionality. Eventually if you want to ship more new features and not wait an extraordinary amount of time to do so you need more people. This doesn't scale super well so your headcount grows non linearly.
Companies develop a lot of bespoke features used by a handful of their customers. It might not be obvious to the average person what all of those features are. Additionally just scaling software to continue running with more customers using the product is not a trivial task as well. Adding more servers or making servers beefier only works until it doesn't.
> I’m 22 and work on a 3-person team so it’s hard for me to imagine why a company would more than 4 or 5 total employees.
You're not wrong.
I've seen companies with less than 10 employees make around $9M ARR within the first 3 years, and some with around 50-100 employees that can't even reach 100K ARR.
The smaller your startup the more faster you can go, Dropbox's main issue is that they haven't implemented Founder Mode yet. I am willing to bet that that there are jobs in Dropbox that doesn't need to exist.
Looks to me, they started to over engineer their product, just for a storage platform, you dont need 2500 people.
Don't worry your imagination will develop over time.
I don't understand why people are still using dropbox. pcloud is one time payment and much less expensive. Why would people still use dropbox?
Lifetime licenses for cloud services is the worst deal imaginable. Even if you're not getting billed, you still cost the service money to continue using it. It's basically the same as a freemium model, except when you get rug pulled later, you're also out the money you paid on a "lifetime" license.
Plenty of examples of how long "lifetime" licenses really last in the modern era. See TeamViewer for example.
rsync is free why would anyone use anything /s
I'm surprised that a company like Dropbox needs so many employees. ~500 being 20% implies the total workforce is 2500 people. HOW?!
I feel like the product could do just fine with 100 employees.