Etsy is laying off 11% of its staff(cnbc.com)
cnbc.com
Etsy is laying off 11% of its staff
https://www.cnbc.com/2023/12/13/etsy-laying-off-11percent-of-staff-citing-competitive-environment.html
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Most I've ever gotten for severance was 1 week pay (and I've been laid off 3 times). And that's even in tech (video game studio).
My previous company (a large corporation) did 1 week per year you worked there, capped at 4 weeks (one person I know that was laid off was there for 17 years, only got the 4 weeks). They actually used to be more generous but made significant cuts to their severance benefits shortly before layoffs so they could save a bunch of money on it (they also took away 401k match later, reduced PTO days, eliminated bonuses, froze raises, made our health care benefits worse, let tons of people leave without authorizing filling in gaps so many departments became overworked skeleton crews, all sorts of crap to save money).
So at least in that case, it wouldn't have mattered if I asked what their severance policies were while interviewing.
My previous company (a large corporation) did 1 week per year you worked there, capped at 4 weeks (one person I know that was laid off was there for 17 years, only got the 4 weeks). They actually used to be more generous but made significant cuts to their severance benefits shortly before layoffs so they could save a bunch of money on it (they also took away 401k match later, reduced PTO days, eliminated bonuses, froze raises, made our health care benefits worse, let tons of people leave without authorizing filling in gaps so many departments became overworked skeleton crews, all sorts of crap to save money).
So at least in that case, it wouldn't have mattered if I asked what their severance policies were while interviewing.
> And that's even in tech (video game studio).
Given everything I've ever heard about working conditions, pay, and benefits in video game studios, it seems more appropriate to think of them as opposite to the mainstream software industry rather than a part of it.
Given everything I've ever heard about working conditions, pay, and benefits in video game studios, it seems more appropriate to think of them as opposite to the mainstream software industry rather than a part of it.
The video game industry seems to uniquely suffer from under-trained, nepotistic, and inept project managers and game directors.
Which inevitably leads to lying, poor communication, and surprise boom/bust layoffs.
In contrast, most other software development industries have figured out how to square the budget-time-people circle, most of the time.
It's a shame Rockstar doesn't do more interviews, as they appear to have a working incremental project development model, that reliably (if slowly) delivers results. My suspicion is they just hire/train professional PMs.
Which inevitably leads to lying, poor communication, and surprise boom/bust layoffs.
In contrast, most other software development industries have figured out how to square the budget-time-people circle, most of the time.
It's a shame Rockstar doesn't do more interviews, as they appear to have a working incremental project development model, that reliably (if slowly) delivers results. My suspicion is they just hire/train professional PMs.
From the people I met at school and worked with since then, the really talented folks who want to make video games _really_ want to make video games. This leads to a fairly natural goal of wanting to set up their own game shops rather than join a large one, where they'll feel they have less impact.
I suspect this leads to a trend where you have disproportionately more mediocre product/vision people at the large gaming companies, because if you have really good product sense in a space with as much passion as video games, and with a relatively low barrier to getting your foot in the door (if you have a small core team of very talented, dedicated people), what on Earth are you doing being a cog in someone else's machine?
I suspect this leads to a trend where you have disproportionately more mediocre product/vision people at the large gaming companies, because if you have really good product sense in a space with as much passion as video games, and with a relatively low barrier to getting your foot in the door (if you have a small core team of very talented, dedicated people), what on Earth are you doing being a cog in someone else's machine?
> with a relatively low barrier to getting your foot in the door
If you want to work on a AAA level product (or even a AA product nowadays), that's increasingly becoming out of reach with a small team. Some people want to work on games that millions of people will play and enjoy. I know a guy who made and released a few small games on his own (I helped with one of them) and they sold like 1000 copies at most, but he maintains a day job in the industry for the past 12 years and is currently a senior engineer at Epic Games working on AAA titles.
Meanwhile I'm working on a small game in my spare time this past couple of years and I'm worried I might not break 1000 copies with its release either (not the prettiest game and a bit of a niche genre, but I'm on my own in my spare time). But at least I have a fairly well paying day webdev job so I'm not screwed if it doesn't do well.
If you want to work on a AAA level product (or even a AA product nowadays), that's increasingly becoming out of reach with a small team. Some people want to work on games that millions of people will play and enjoy. I know a guy who made and released a few small games on his own (I helped with one of them) and they sold like 1000 copies at most, but he maintains a day job in the industry for the past 12 years and is currently a senior engineer at Epic Games working on AAA titles.
Meanwhile I'm working on a small game in my spare time this past couple of years and I'm worried I might not break 1000 copies with its release either (not the prettiest game and a bit of a niche genre, but I'm on my own in my spare time). But at least I have a fairly well paying day webdev job so I'm not screwed if it doesn't do well.
Whilst I won’t deny that incompetent leadership and planning are involved, I think there are structural reasons for the game industry being uniquely problematic.
Games have massive cost efficiencies from scaling. Studios are incentivised to always make the biggest games they can with their budget. Games team sizes vary strongly with the project period. They can’t handle more than a small team early and can absorb almost any number of people at any skill level before release.
End result is that game development is always boom and bust. Small core teams build a game up slowly, then more and more are added until just before release when a mad scramble for anyone and everyone they can be bought borrowed or stolen to get the game released on time. Then there’s no work except for the core team on the next game.
The obvious solution is to have many games running in one studio to even out the team sizes and absorb the crunch, but that implies either studio sizes beyond anything we see currently (and no increase in per project scope) or much smaller scope for games.
I’ve seen models like they work, and be much less painful to work with for everyone involved, but it did require different market conditions to justify the alternative model, I’m not sure the entire industry could switch.
That’s not to say fixing the problem is impossible, just that the bad incentives will always be there to push back against improvements..
Games have massive cost efficiencies from scaling. Studios are incentivised to always make the biggest games they can with their budget. Games team sizes vary strongly with the project period. They can’t handle more than a small team early and can absorb almost any number of people at any skill level before release.
End result is that game development is always boom and bust. Small core teams build a game up slowly, then more and more are added until just before release when a mad scramble for anyone and everyone they can be bought borrowed or stolen to get the game released on time. Then there’s no work except for the core team on the next game.
The obvious solution is to have many games running in one studio to even out the team sizes and absorb the crunch, but that implies either studio sizes beyond anything we see currently (and no increase in per project scope) or much smaller scope for games.
I’ve seen models like they work, and be much less painful to work with for everyone involved, but it did require different market conditions to justify the alternative model, I’m not sure the entire industry could switch.
That’s not to say fixing the problem is impossible, just that the bad incentives will always be there to push back against improvements..
Rockstar is notorious for crunch, or overworking and poor conditions, especially near the end of a project life. There are a lot of horror stories about games like red dead redemption 2, you'll find an overwhelming amount of articles about this if you Google it.
Circa RDR2, it seems they had hours worked as a individual performance metric.
https://kotaku.com/inside-rockstar-games-culture-of-crunch-1...
https://kotaku.com/red-dead-redemption-2-developers-speak-ou...
But it still seems to be a mixed bag of experiences (with the expected "certain locations have shit management" and "QA always gets shit on"). And at least they shipped a finished product, that was arguably improved by crunch.
In contrast, there are a ton of games that don't measurably improve/ship and people are asked to crunch to cover management screw-ups.
I'm baselining at things like Star Citizen and Beyond Good and Evil 2, of the "How are these people even allowed to call themselves professional managers/directors?" level.
https://kotaku.com/inside-rockstar-games-culture-of-crunch-1...
https://kotaku.com/red-dead-redemption-2-developers-speak-ou...
But it still seems to be a mixed bag of experiences (with the expected "certain locations have shit management" and "QA always gets shit on"). And at least they shipped a finished product, that was arguably improved by crunch.
In contrast, there are a ton of games that don't measurably improve/ship and people are asked to crunch to cover management screw-ups.
I'm baselining at things like Star Citizen and Beyond Good and Evil 2, of the "How are these people even allowed to call themselves professional managers/directors?" level.
The vast majority of layoffs in tech (not 'big tech' or name brand companies) is likely closer to 1 week than 16 weeks.
Sorry to be contrarian, but the only companies that do these bigger packages are doing it because it will be in the news.
Sorry to be contrarian, but the only companies that do these bigger packages are doing it because it will be in the news.
If you're making a universal claim like that, you are just being contrarian. My last job was at a Series C startup that you've probably never heard of, and when they had to lay off 2/3rds of their employees in late 2020 due to the pandemic, they gave a couple months of severance (don't remember the exact amount, I wasn't laid off) + extended COBRA coverage.
Still is a series C startup that almost certainly is trying to keep its brand intact up rehire after the uncertainty dissipated.
I think you're being unrealistic as to what the industry as a whole is like. 1 week per year is not uncommon. I've been doing this 26 years and have had many dozens of friends laid off during this period, back in 2009, and back during dot com.
I think you're being unrealistic as to what the industry as a whole is like. 1 week per year is not uncommon. I've been doing this 26 years and have had many dozens of friends laid off during this period, back in 2009, and back during dot com.
On a reread, you'll note that I didn't make any claims about what layoffs are like in the industry as a whole: I implied that pay/benefits/conditions tend to be pretty bad in gaming and pretty good in the rest of tech, and I noted that you're wrong to make a universal statement about only high-profile companies giving severance.
I don't doubt your experience, and I don't have a survey of industry standards. But I will also say that experiences 14 or 25 years ago are not a reliable guide to HR choices in the 2023 tech industry.
I don't doubt your experience, and I don't have a survey of industry standards. But I will also say that experiences 14 or 25 years ago are not a reliable guide to HR choices in the 2023 tech industry.
I agree they are bad in the game industry, but conveniently ignored was the second part of their post about the non-gaming company... 1 week per year is common, but most common seems to be 2 weeks w/ 1 week per year on top and capped after a number of years.
I didn't say only high profile companies gave severance. I'm saying 3+ months is rare and it seems normal because it is a marketing tool used like this.
Also to restate, my experience translates to what is currently happening in tandem with the last two periods. I know someone who was recently let go getting 4 weeks after 16 years.
I didn't say only high profile companies gave severance. I'm saying 3+ months is rare and it seems normal because it is a marketing tool used like this.
Also to restate, my experience translates to what is currently happening in tandem with the last two periods. I know someone who was recently let go getting 4 weeks after 16 years.
Not sure I made it clear that the second one wasn't a non-gaming company, but yeah it wasn't (it was webdev). I was laid off from three gaming companies, and haven't yet from any non-gaming companies, even though I've been through more layoff rounds with non-gaming companies now.
But my friends have been laid off, and I've yet to hear of any of them getting more than 1 week per year worked. But I don't have any friends that work for big tech (I live in the Midwest, a lot easier to not know anyone in big tech here). A lot of insurance, health, and financial companies around here, not too many Facebook or Apple or Netflix offices.
But my friends have been laid off, and I've yet to hear of any of them getting more than 1 week per year worked. But I don't have any friends that work for big tech (I live in the Midwest, a lot easier to not know anyone in big tech here). A lot of insurance, health, and financial companies around here, not too many Facebook or Apple or Netflix offices.
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It's bad, but to me it seems like at least some notoriously bad ones are making incremental changes.
Game studios are notorious for being the worst places to work as a programmer/engineer in objective terms.
I wouldn't take your experience at one to be representative of how termination and severance at US tech companies is usually handled.
I wouldn't take your experience at one to be representative of how termination and severance at US tech companies is usually handled.
There is a point in the company size (in some metric) vs. job responsibility curve where you can successfully make contract changes, within reason. One thing you should absolutely consider is pushing for a specific severance clause.
This serves two purposes, an indication of their seriousness about your position, and some peace of mind (e.g. have 6/12 months or whatever in your pocket).
That being said, there are scenarios where you won't see a penny of it.
Also, depending on your jurisdiction and job tenure, you may have a very viable claim for more severance. Nobody is likely to offer you more than statutory (or whatever is in your contract) without asking, but it may be worth paying a lawyer hour or so to find out properly.
This serves two purposes, an indication of their seriousness about your position, and some peace of mind (e.g. have 6/12 months or whatever in your pocket).
That being said, there are scenarios where you won't see a penny of it.
Also, depending on your jurisdiction and job tenure, you may have a very viable claim for more severance. Nobody is likely to offer you more than statutory (or whatever is in your contract) without asking, but it may be worth paying a lawyer hour or so to find out properly.
one word. Unionize
I'd sign up to unionize, but I wouldn't organize a union myself (I'm not organized enough for that). Haven't even heard a whiff of desires to unionize at any company I've ever worked for.
> I appreciate that our industry has developed a norm of generous severance
What if you had unions or proper labor laws that actually guaranteed this? As an European it's weird to see you having to rely on the "kindness" of the company to not get fcked over.
What if you had unions or proper labor laws that actually guaranteed this? As an European it's weird to see you having to rely on the "kindness" of the company to not get fcked over.
average programmer salary in the USA ~$110K, average programmer salary in France ~$43K, Germany: $52K, UK: $55K etc.
Yea, I am OK with the American model.
Yea, I am OK with the American model.
I'm not sure that these two things are related.
It is possible in an era of remote work to outsource any American software job to a lower paid, better skilled worker in a low cost of labour country.
Companies choose not to do this. Maybe they want people they can meet, maybe investors don't like it, maybe the paperwork scares then. I don't know the reason but every American programmer who has a job has it because thier employer chose not to hire a better cheaper foreigner with less rights.
Looking at it this way we can say that the American job market and salary expectations are not related to international salaries. And it follows that the same can be true in Europe.
My personal theory is, the world runs on dollars. America prints dollars. The closer you are to the fountain the more water you get, so Americans get more dollars.
It is possible in an era of remote work to outsource any American software job to a lower paid, better skilled worker in a low cost of labour country.
Companies choose not to do this. Maybe they want people they can meet, maybe investors don't like it, maybe the paperwork scares then. I don't know the reason but every American programmer who has a job has it because thier employer chose not to hire a better cheaper foreigner with less rights.
Looking at it this way we can say that the American job market and salary expectations are not related to international salaries. And it follows that the same can be true in Europe.
My personal theory is, the world runs on dollars. America prints dollars. The closer you are to the fountain the more water you get, so Americans get more dollars.
My point was kinda that it should extend to other industries, not just programmers. Compassion for others.
Over the years, it's become abundantly clear that solidarity is very foreign concept to HN.
in this case what does 'solidarity' mean?
Are you personally willing to work for 1/2 or 1/3 the pay you receive, so that if you ever get laid off you have a slightly better severance package?
I am not.
I would rather get paid what the most I can/am able to negotiate, and live in a country with so many opportunities, that if I did ever get laid off, I could move to another opportunity with equally attractive pay and benefits easily.
Giving up a huge chunk of your earnings potential in order to have your severance package, should you ever need it, be slightly better doesn't seem like a good tradeoff to me.
Are you personally willing to work for 1/2 or 1/3 the pay you receive, so that if you ever get laid off you have a slightly better severance package?
I am not.
I would rather get paid what the most I can/am able to negotiate, and live in a country with so many opportunities, that if I did ever get laid off, I could move to another opportunity with equally attractive pay and benefits easily.
Giving up a huge chunk of your earnings potential in order to have your severance package, should you ever need it, be slightly better doesn't seem like a good tradeoff to me.
> Are you personally willing to work for 1/2 or 1/3 the pay you receive, so that if you ever get laid off you have a slightly better severance package?
That's a false dilemma. It's not like you would have to give up half your salary for this.
> and live in a country with so many opportunities
That's only because you're a SE. The rest of your country doesn't have those opportunities. I think rather most of them would have preferred the social security net of most European countries instead of working for less than minimum wage begging for tips, being laid of on a moments notice.
I mean, how's SV with all the homeless, robberies etc.? Is that kind of society worth the slightly larger pay? Isn't it nice if your neighbors also have it good?
That's a false dilemma. It's not like you would have to give up half your salary for this.
> and live in a country with so many opportunities
That's only because you're a SE. The rest of your country doesn't have those opportunities. I think rather most of them would have preferred the social security net of most European countries instead of working for less than minimum wage begging for tips, being laid of on a moments notice.
I mean, how's SV with all the homeless, robberies etc.? Is that kind of society worth the slightly larger pay? Isn't it nice if your neighbors also have it good?
How’s Paris with all the homeless, robberies, riots, trash, etc? Is it worth having a populace that is perpetually angry because they’re so reliant on the government? Can you tell us what ended up happening to the retirement age in France?
To answer your question, yes, I want to live in a society where I can pursue an extremely high quality of life for myself and my family. My neighbors have it pretty damn good from what I can tell.
To answer your question, yes, I want to live in a society where I can pursue an extremely high quality of life for myself and my family. My neighbors have it pretty damn good from what I can tell.
I wouldn't know, as I've never been to France.
Edit: wait, I was once on the French side of the alps. Hardly enough to let me speak with any authority on any thing but snow, though.
Edit: wait, I was once on the French side of the alps. Hardly enough to let me speak with any authority on any thing but snow, though.
the comment I was responding to was claiming that severance works better/is more generous in the EU - and presumably France based on the username - and almost across the board salaries in France are 1/2 to 1/3 what they are in the USA for many professions...so yeah, you would need to give up 1/2 to 1/3 your salary for a fair comparison.
I don't even live anywhere near SV, I used a $110K average for the USA in my example, if we were talking SV that would probably be closer to $400K, so 10X what a programmer in France might make. I really don't think anyone in SV would be willing to work as a programmer for what an average programmer in SV makes so that they were guaranteed a better payout if they got fired.
I don't even live anywhere near SV, I used a $110K average for the USA in my example, if we were talking SV that would probably be closer to $400K, so 10X what a programmer in France might make. I really don't think anyone in SV would be willing to work as a programmer for what an average programmer in SV makes so that they were guaranteed a better payout if they got fired.
The cost of living is ~30% lower in Paris compared to a major US city like Los Angeles. If you factor in what people pay here for healthcare premiums you've accounted for most of the difference in salary. That's before we even get into things like childcare, education, or transportation. If you really want to do an apples-apples comparison for income you should also take into account the difference in expenditures.
Also, how many SWEs in SV make $400k? Do you think they're a representative sample of white collar workers for that city?
Also, how many SWEs in SV make $400k? Do you think they're a representative sample of white collar workers for that city?
> factor in what people pay here for healthcare premiums you've accounted for most of the difference in salary
10x means 90% difference, all consumed by the more expensive healthcare? That's like one order of magnitude wrong.
> how many SWEs in SV make $400k?
Saved you a google: > The average total compensation of a Software Engineer in San Francisco Bay Area, US is $242,000.
the topic was programmers, all "white collar workers" is not relevant to this conversation.
10x means 90% difference, all consumed by the more expensive healthcare? That's like one order of magnitude wrong.
> how many SWEs in SV make $400k?
Saved you a google: > The average total compensation of a Software Engineer in San Francisco Bay Area, US is $242,000.
the topic was programmers, all "white collar workers" is not relevant to this conversation.
> and almost across the board salaries in France are 1/2 to 1/3 what they are in the USA for many professions...
Healthcare costs could help to make up for that for many employees. The average American spent ~$13,000 in health care expenses in 2022, but a full time employee making minimum wage only gets ~$15,000 a year. Even if someone earns twice the minimum wage, healthcare costs will eat a huge percentage of what they'd earn.
Obviously software in the US is an exception, although here too wages and benefits are being slashed at every opportunity. The tech industry is hard at work suppressing wages and hiring from a global pool of talent (and waiting for AI to replace employees) so jobs in software might not stay so nice for very long, except for a select few with the most rare skills.
Healthcare costs could help to make up for that for many employees. The average American spent ~$13,000 in health care expenses in 2022, but a full time employee making minimum wage only gets ~$15,000 a year. Even if someone earns twice the minimum wage, healthcare costs will eat a huge percentage of what they'd earn.
Obviously software in the US is an exception, although here too wages and benefits are being slashed at every opportunity. The tech industry is hard at work suppressing wages and hiring from a global pool of talent (and waiting for AI to replace employees) so jobs in software might not stay so nice for very long, except for a select few with the most rare skills.
My comment? I've never been to France. My point is that you can't compare these two things. It's not like having a fair severance packet immediately means you would need to halve your salary just because you compare with a country with a different salary level.
You're disregarding taxation and cost of living. Your numbers on their own mean nothing.
Oh, and USA is one the countries with most inequality, which plays in favor of a minority at the expense of the vast majority. Different story in France, for instance, where solidarity between rich and poor is higher through taxes, although not perfect.
Really depends what you want out of life.
Oh, and USA is one the countries with most inequality, which plays in favor of a minority at the expense of the vast majority. Different story in France, for instance, where solidarity between rich and poor is higher through taxes, although not perfect.
Really depends what you want out of life.
Taxes are higher in Europe and cost of living is not low. US “inequality” exists because the ceiling is high but medians still meet or exceed Europe.
You’re disregarding that Europe is reaping what it has sown when it comes to economic development.
You’re disregarding that Europe is reaping what it has sown when it comes to economic development.
Compare the cost of living in Berlin to even rust belt US cities and it's really not favorable to the US. If you want to include "healthcare premiums" in the calculation as a tax then the US pays more taxes per capita than most of the EU member states like France or Germany.
Not sure how you are measuring "inequality", but even in a backwater like Hungary you don't have adults rationing insulin made for pets.
Not sure how you are measuring "inequality", but even in a backwater like Hungary you don't have adults rationing insulin made for pets.
Most metrics disagree with you. The US is on average cheaper to live in compared to the average revenue. That can be seen in average household debt too, as those are pretty high in Europe.
> What if you had unions or proper labor laws that actually guaranteed this?
Then hiring would be much more expensive, much less new companies would be able to start up, and as a result, salaries in tech would be 2-3 times lower, like in Europe.
What would you choose, a 2-3 times higher salary or a guarantee of things that you would often get anyway?
Then hiring would be much more expensive, much less new companies would be able to start up, and as a result, salaries in tech would be 2-3 times lower, like in Europe.
What would you choose, a 2-3 times higher salary or a guarantee of things that you would often get anyway?
> What would you choose, a 2-3 times higher salary or a guarantee of things that you would often get anyway?
If it meant a guarantee for all workers, allowing people to not become desperate enough to become porch pirates, or break into cars to steal stuff, or point a gun to my head because I have more stuff than them, or any other social malaise fanned by the lack of safety nets, I'd take the guarantee 10 out of 10 times.
If it meant a guarantee for all workers, allowing people to not become desperate enough to become porch pirates, or break into cars to steal stuff, or point a gun to my head because I have more stuff than them, or any other social malaise fanned by the lack of safety nets, I'd take the guarantee 10 out of 10 times.
What about non-tech workers? Don't they deserve the same?
The fact that you have no security net in the US is probably also harmful when it comes to startups. Few can take the risk.
The fact that you have no security net in the US is probably also harmful when it comes to startups. Few can take the risk.
The guarantee, provided all my neighbors also get it. US tech salaries are way too high.
The guarantee.
The guarantee.
Then frankly, we would probably fall to level of innovation that modern Europe is known for.
This reminds me of Louis CK's line "you can achieve great things when you don't give a shit about people".
Is the cost worth it? Do I want fair conditions and a good work balance, or do I want to brag about something that made my employer's shareholders really proud? Is the pay worth it if I can't miss a day of work to tend to more important matters?
I run a website for immigrants in Germany. I have to spend a lot of words explaining that it's okay to take sick days, that you won't lose your insurance if you lose your job, and other things that Europeans take for granted.
Is the cost worth it? Do I want fair conditions and a good work balance, or do I want to brag about something that made my employer's shareholders really proud? Is the pay worth it if I can't miss a day of work to tend to more important matters?
I run a website for immigrants in Germany. I have to spend a lot of words explaining that it's okay to take sick days, that you won't lose your insurance if you lose your job, and other things that Europeans take for granted.
> you can achieve great things when you don't give a shit about people
I think this is a completely wrong take from the armchair philosophers.
You actually can't do great things when you treat people like shit. The people who actually do great things strike the right balance between applying pressure and requiring excellence and treating people well. The results of purely treating people like slaves is mediocre.
Even the pyramids were built by well paid craftsmen, not slaves as is commonly believed.
I think this is a completely wrong take from the armchair philosophers.
You actually can't do great things when you treat people like shit. The people who actually do great things strike the right balance between applying pressure and requiring excellence and treating people well. The results of purely treating people like slaves is mediocre.
Even the pyramids were built by well paid craftsmen, not slaves as is commonly believed.
> Even the pyramids were built by well paid craftsmen, not slaves as is commonly believed.
Half right. It's currently believed that the bulk of the workers were lots and lots of paid laborers. Not craftsmen. That would be expensive!
https://www.britannica.com/video/226777/did-enslaved-people-...
Half right. It's currently believed that the bulk of the workers were lots and lots of paid laborers. Not craftsmen. That would be expensive!
https://www.britannica.com/video/226777/did-enslaved-people-...
Maybe it's not meant to be taken literally. I read it as, "You can achieve great things when you loosen your system of ethics and are okay with a net increase in human suffering."
It's also a balance between having new companies that can start up with lower overheard and fewer jobs concentrated among larger companies that can afford it.
The only companies that treat their employees poorly are those that have people lined up to work for them. The employees must think the tradeoff is worth it.
Employees should be able to choose a company with stability and lower pay or higher pay and less stability. The other option is to take the high pay job and pay for additional private insurance to cover what your employer will not. The people who want stability shouldn't force it on the people who are comfortable without it.
The only companies that treat their employees poorly are those that have people lined up to work for them. The employees must think the tradeoff is worth it.
Employees should be able to choose a company with stability and lower pay or higher pay and less stability. The other option is to take the high pay job and pay for additional private insurance to cover what your employer will not. The people who want stability shouldn't force it on the people who are comfortable without it.
A typical software engineer in Germany earns about €60-80k.
And 6 weeks off, unlimited sick days, and a generous notice period. Health insurance and unemployment insurance are a given. There's no explaining how much more relaxed work culture is in Germany.
Is life better in every respect? No. But there's a lot more to life than earning potential.
Is life better in every respect? No. But there's a lot more to life than earning potential.
More than enough to save money for retirement, travel the world enjoying 30 days vacations, own a cars, buy enough hardware, fancy house,....
After a certain value is for show off only, or maybe lit cigars with burning notes.
After a certain value is for show off only, or maybe lit cigars with burning notes.
Europe isn't good at building massive tech companies. But its hard to say Europe is not a leader in scientific and technological innovation.
Just in tech, Europe developed ARM chips, ASML lithography machines, and DeepMind's AI breakthroughs. These underpin a few trillion dollars of global economic activity.
Just in tech, Europe developed ARM chips, ASML lithography machines, and DeepMind's AI breakthroughs. These underpin a few trillion dollars of global economic activity.
> Europe isn't good at building massive tech companies.
Which is a good thing. Massive tech companies are a negative thing, not a positive thing.
Which is a good thing. Massive tech companies are a negative thing, not a positive thing.
It's a mixed bag. Only sheer scale allowed Apple to pour in a huge amount of money into their M chips, probably the most important consumer-facing innovation on desktops in the past 5 years.
Industry doesn't need slave labour, with people happy for any goodie their feudal lord feels like giving, for innovation.
The US has higher salaries than Europe, way higher, so calling it slave labor is rich. Wish people would understand that just because Europe does something doesn’t make it the right way to do things. As far as reality shows, the US system is the most innovative and the European one is definitely not.
Some lucky people have higher salary than in Europe, while others have to beg Red Cross to take care of them, while living between pay checks.
Wrong. Median disposable income is higher on average across all occupations. Software engineer income is significantly higher. The top 10% in the US is not even fathomable in Europe.
Work to live, not live to work.
https://www.salvationarmyusa.org/usn/
https://www.salvationarmyusa.org/usn/
As opposed to Europe, which is known to not have homeless or poor people.
At least those are supported by national social healthcare.
It's not about slave labor, although all job dependent people are wage slaves even in a union.
It's about labor market flexibility. https://www.investopedia.com/terms/l/labor-market-flexibilit...
Overly strong labor unions make the entire economy less nimble in rapidly changing environments.
It's about labor market flexibility. https://www.investopedia.com/terms/l/labor-market-flexibilit...
Overly strong labor unions make the entire economy less nimble in rapidly changing environments.
I rather take my European IT union, thank you.
No need for gig economy "flexibility ", making rich millionaires.
No need for gig economy "flexibility ", making rich millionaires.
Ok, two things: first, America’s lock on innovation is already waning, so it would be dangerous to think we’ll continue to compete globally solely by out innovating other regions.
Secondly, I strongly doubt shitty labor laws have been the secret formula behind the success.
Secondly, I strongly doubt shitty labor laws have been the secret formula behind the success.
There's much more surrounding the USA's innovation engine than treating employees like shit. Perhaps would be good to look at what's working and what's not instead of just assuming that better protection for workers, which are the ones directly and literally creating the value, would cause a catastrophe.
Or please direct me to some literature supporting your opinion.
Edit: Page 19 here [0] would directly question your assumption.
[0] https://www.wipo.int/edocs/pubdocs/en/wipo-pub-2000-2023-en-...
Or please direct me to some literature supporting your opinion.
Edit: Page 19 here [0] would directly question your assumption.
[0] https://www.wipo.int/edocs/pubdocs/en/wipo-pub-2000-2023-en-...
It sucks that people will screech about vague bullshit like innovation whenever we try to make working here suck less.
Yeah this might work for larger tech companies, but when I was working for a Series A startup and got laid off I got 2 weeks. Same thing happened to a friend as well.
What if? I mean, we need better labor laws right now just to be able to form unions (if folks wanted to) and about half the country (or more) thinks things like regulation or unions are Evil Communist Socialism(TM).
That is to say, you're not wrong but if the hope is that people are going to be like "by golly, I've never thought of that, I'll just run right out and join a union" um... no.
That is to say, you're not wrong but if the hope is that people are going to be like "by golly, I've never thought of that, I'll just run right out and join a union" um... no.
"our industry has developed a norm of generous severance"
That's a specious claim. I'd argue just companies that have brand recognition do.
That's a specious claim. I'd argue just companies that have brand recognition do.
Yeah, I probably overstated this here. I think it's more common than in most industries, but I don't have stats to determine what the actual "norm" in tech is, or how it compares to elsewhere.
I’d estimate 9/10 engineers are not getting these packages. But most of those folks likely don’t read HN.
The economy is soul-sucking. Which, I suppose it's mostly been that way, we're just more open now.
My friends who have worked with NGOs and nonprofits have all complained that they actually have the worst work-life balance; imagine your middle manager doing normal stereotypical office gaslighting about working longer, harder, not getting commensurate pay etc., but instead it's also tinged with morality and "do it because our mission is so important"
My friends who have worked with NGOs and nonprofits have all complained that they actually have the worst work-life balance; imagine your middle manager doing normal stereotypical office gaslighting about working longer, harder, not getting commensurate pay etc., but instead it's also tinged with morality and "do it because our mission is so important"
Yeah, my sister works at a nonprofit foundation and it sounds like an absolute disaster in terms of awful culture and management :/
I would naively expect non-profits to have more humanizing cultures internally but it's just objectively not the case. If anything it's the opposite, using the mission as cover for absolute cultural rot. And some of the best cultures seem to be at trading firms like Jane Street and TGS which also pay better than the alternatives. Go figure.
I would naively expect non-profits to have more humanizing cultures internally but it's just objectively not the case. If anything it's the opposite, using the mission as cover for absolute cultural rot. And some of the best cultures seem to be at trading firms like Jane Street and TGS which also pay better than the alternatives. Go figure.
I did some pro-bono development work for a nonprofit some time ago. I don't think I have encountered such unpleasant or entitled clients anywhere, whether as an employee or freelancer.
Know a guy who quite working for a non-profit law firm recently for similar reasons.
I'd love to work on something I really care about, but it seems like most of those jobs just give management excuses to treat you terribly.
I'd love to work on something I really care about, but it seems like most of those jobs just give management excuses to treat you terribly.
Yes, my next door neighbor worked for years at disease foundation non profit and the stories she would tell about management were eye opening.
>(getting laid off any time isn't fun)
I know someone who was days from telling their boss about the Apple offer they had accepted who were then given a layoff package.
Probably was fun for them to get a ~30k+ 'leaving bonus' when they were planning to anyway. :)
I know someone who was days from telling their boss about the Apple offer they had accepted who were then given a layoff package.
Probably was fun for them to get a ~30k+ 'leaving bonus' when they were planning to anyway. :)
Yeah my company had a small RIF recently but it feels so much better for everyone when the severance is generous and the treatment is humane. Laying off people sucks, but knowing they'll have several months of continued income and health insurance makes it suck less.
A small startup I worked at shut down and they told us on ~Nov 15th that our pay and benefits would all be ending Dec 1st -- what an absolute nightmare for anyone with bills or a family.
A small startup I worked at shut down and they told us on ~Nov 15th that our pay and benefits would all be ending Dec 1st -- what an absolute nightmare for anyone with bills or a family.
> our industry has developed a norm of generous severance.
I’ve been through this twice in the last two years and let me tell you, this is not the norm. Most companies would pay you only two weeks if it wasn’t for the WARN act.
Most companies are paying 2/3 months based on the local laws. For smaller layoffs where the WARN doesn’t apply, they’re barely providing a month of severance. And yes these are the same tech companies.
I’ve been through this twice in the last two years and let me tell you, this is not the norm. Most companies would pay you only two weeks if it wasn’t for the WARN act.
Most companies are paying 2/3 months based on the local laws. For smaller layoffs where the WARN doesn’t apply, they’re barely providing a month of severance. And yes these are the same tech companies.
> if one says "we let them keep their five-year-old laptop" and another says "we gave them several months severance pay", that will be a factor in my decision.
This is a great idea in theory, but do remember that organizations are made up of people, and the decision makers in the past may not be the same decision makers in the future.
This is a great idea in theory, but do remember that organizations are made up of people, and the decision makers in the past may not be the same decision makers in the future.
Why do a lot of tech companies give big severances? I don't think other industries do it. It's strangely generous.
Most tech companies don't. Some do. From my limited observations, such packages don't seem more common in the tech sector than any other professional sector. Just a subjective observation, I have zero data to support that.
I'm not against more guarantees about severance, but even with the best guarantee you might not have enough money to endure a post-layoff hardship. The best option, that works quite well in most situations, is to have savings to endure at least 6 months of expenses with no income.
I got this feeling most Etsy sellers nowadays are fronts for actual sweatshops or stuff sold on Alibaba.
They killed the site to hunt metrics.
They killed the site to hunt metrics.
Absolutely. Esty is a shell of its "handmade goods" pitch that put them on the map.
The legit boutique sellers still exist but they are buried in a sea of mass produced, private label junk you could find on Amazon or eBay.
The legit boutique sellers still exist but they are buried in a sea of mass produced, private label junk you could find on Amazon or eBay.
Just wondering as someone who sells handmade things on etsy, Ive noticed my sales dipping the last 6 months. is there any websites you recommend to buy/sell handmade things?
There's no other handmade marketplace with nearly the same buyer reach. I've been on GoImagine, MakerPlace, etc for months and they literally generate zero sales against Etsy's hundreds in the same time.
What's your craft? I like artfinder.com, though it's mostly paint on canvas. There's occasional sculpture, collage, and photography.
I've seen local flyers for https://artisans.coop/, but haven't got any metrics or anecdotes for 'em
I've given up on trying to find such goods on the web, to be honest. Instead, I've gone back to the old-fashioned method of hitting up craft fairs and the like in person.
Make your own using wix, etc. Advertise on social media
tried that but the content creation side of that was taking way too long and etsy has a larger flow of people just browsing
And that's why it's flooded with product.
You can have ai do that for you now.
Check out journalist.ai, etc.
Check out journalist.ai, etc.
Discovery is still a problem.
It's generally more fragmented now, but specifically for handmade goods there's https://goimagine.com/ (5% transaction fee non-inclusive of payment processing + monthly subscription of $2.50-$10 for sellers, application required)
I guess it depends on what you're looking for. I've seen some of what you're talking about, but most of the type of stuff I'm looking for still has a good handmade selection.
I went on to see if I could find a hand knit toddler sweater.
Sure can! Easily.
I just see the same ones on Amazon by OXIIK brand. I had, some grandmother in Canada in mind.
Sure can! Easily.
I just see the same ones on Amazon by OXIIK brand. I had, some grandmother in Canada in mind.
Totally, the original founder was literally in tears as he left
They ruined the culture and ecosystem, it's just ebay/amazon/aliexpress now
They ruined the culture and ecosystem, it's just ebay/amazon/aliexpress now
It's important to remember this the next time you're excited for a new tech company.
Remember it about anything you’re excited by. The pursuit of the almighty dollar dilutes and ruins everything over time.
Its human nature.
There are a few exceptions. Some are covered in the book "small giants". It's great.
There are a few exceptions. Some are covered in the book "small giants". It's great.
Ebay itself has gotten notably worse with the rise of the drop ship, arbitrage, get rich quick idiots.
Now I actively avoid sellers with too many sales and never buy anything that looks like it has a stock image for the listing.
Now I actively avoid sellers with too many sales and never buy anything that looks like it has a stock image for the listing.
I get extra annoyed when I buy something on eBay and the "seller" just ordered the thing from Amazon and had them ship it to me.
I don't buy things from Amazon for a reason, and it's incredibly annoying to have been forced to do business with them anyway, even indirectly.
I don't buy things from Amazon for a reason, and it's incredibly annoying to have been forced to do business with them anyway, even indirectly.
Well at least you are trying.
I heard people are saying 3d printed when it's injection molded plastics as if 3d printed is artisan.
It can be difficult to tell what is drop shipped and what is still being handmade. I'm much more hesitant to use it than I was years ago.
My city had a lot of Etsy marketplace events and I'll pretty much only buy online from people who I've seen in person at one of those events. Even then, some tables are a little... suspect. I also follow a bunch I like on Instagram and see regular updates of what they're doing which gives a lot more trust. Kinda sad it takes all that these days. Side note about the market places: After the last one I went to, one of the creators posted about how they sold around $900 but the table cost $500. Looking back at how some tables were being passed over by everyone, or selling low-value items, it's brutal. I really wonder how many broke even. It must be a sea of crushed dreams out there.
> Even then, some tables are a little... suspect.
In what way? I mean if you got good enough tools it can be made Ikea straight, right?
In what way? I mean if you got good enough tools it can be made Ikea straight, right?
In a "the vendor is selling the same rings/earrings fixtures as another vendor I've seen before" way. Specifically, I've seen amber jewelry imported from Poland sold by multiple vendors.
Ah I thought you meant the literal tables. It is probably easier to do a factory perfect table than earring.
I don't find it at all difficult to tell which are legit. If you can't tell and want to be sure, then message the seller and ask questions.
If it's difficult to tell, does it really matter?
It's difficult to tell when browsing. It's fairly obvious when the goods arrive.
If the appeal to shopping on Etsy is (like it is for me) that you're buying handmade goods from the individuals who make them (and paying a premium to do so), then yes -- it matters a ton.
Usually, when you buy things that are drop shipped they are also marked up a ridiculous amount.
Some are but many are still legit sellers. We’ve sold on there and were handmade items. Their algorithm is very unpredictable so it was hard to rely on Etsy as a source of revenue
Does anyone know of any good alternatives which actually focuses on personally-crafted goods and actually bans imported manufactured junk?
You'd have to work really hard to vet, and then continue to re-vet, your sellers in order to keep the crap out. There's just too much potential for profit in abusing the system, managing to sell your $1.50 sweatshop knit hats for $40.
You'd want to start off with carefully-selected invites to specific sellers, and then maybe do a referral-based system to bring on additional sellers. Video calls and photo ID for verification. Reporting systems if buyers get mass-produced junk.
Sounds like it would take quite a bit of human effort and care so I can't imagine it getting funded :)
You'd want to start off with carefully-selected invites to specific sellers, and then maybe do a referral-based system to bring on additional sellers. Video calls and photo ID for verification. Reporting systems if buyers get mass-produced junk.
Sounds like it would take quite a bit of human effort and care so I can't imagine it getting funded :)
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That's exactly why I stopped using Etsy.
Counterpoint: Etsy still has a lot of products that are just different than what you get when you search on Amazon or AliExpress or Walmart.
Example: search for toilet paper holders. You'll find stuff like a railroad spike, animal sculptures, pipes with valves...they are far more creative, weird, and eclectic than a typical Amazon search.
Hot take: Etsy's customer doesn't actually want something handmade, what they want is something that's thinking "outside the box" of normal home goods. They want a marketplace of unique ideas.
Whatever Etsy has done is working: https://www.statista.com/statistics/409371/etsy-annual-reven...
Example: search for toilet paper holders. You'll find stuff like a railroad spike, animal sculptures, pipes with valves...they are far more creative, weird, and eclectic than a typical Amazon search.
Hot take: Etsy's customer doesn't actually want something handmade, what they want is something that's thinking "outside the box" of normal home goods. They want a marketplace of unique ideas.
Whatever Etsy has done is working: https://www.statista.com/statistics/409371/etsy-annual-reven...
"If you want something truly made by an individual artist one-by-one you are going to eventually have a hard time affording whatever that item is."
Yes! Especially an artist in a rich country. You're paying for the artist's time, and in rich countries that's very expensive.
On Etsy I found some great wood art from a Chinese artist, priced at a few hundred dollars.
I do like Etsy for household knick-knacks like napkin holders or nightlights or photo frames. I can go on Amazon and get some random made-in-China junk, or go on Etsy and with a little digging find something a bit more interesting at, say, $50. That's probably ten times what some Amazon dreck would cost but I can splurge on a napkin holder or photo frame.
I wouldn't mind an assembly-line hand-painted painting. I like the texture of hand-painted things instead of a print.
Yes! Especially an artist in a rich country. You're paying for the artist's time, and in rich countries that's very expensive.
On Etsy I found some great wood art from a Chinese artist, priced at a few hundred dollars.
I do like Etsy for household knick-knacks like napkin holders or nightlights or photo frames. I can go on Amazon and get some random made-in-China junk, or go on Etsy and with a little digging find something a bit more interesting at, say, $50. That's probably ten times what some Amazon dreck would cost but I can splurge on a napkin holder or photo frame.
I wouldn't mind an assembly-line hand-painted painting. I like the texture of hand-painted things instead of a print.
Yup. I still occasionally buy stuff there, but I now do a lot more diligence on who the seller is and what they're offering so I know what to expect.
It's amazing how the "macro environment" is responsible for all the layoffs, but never responsible for any of the growth.
Even companies aren't immune to fundamental attribution error.
Even companies aren't immune to fundamental attribution error.
> It's amazing how the "macro environment" is responsible for all the layoffs, but never responsible for any of the growth.
Does anyone really question that growth over the past 10 years, particularly in the 2020-2021 COVID money printing era, wasn't due to the macro environment?
Given how cheap/free money was for so long, it made total sense to hire and focus on growth and cornering markets without being concerned about margins or long-term profitability. Now that money isn't cheap, companies are concerned about those things and are making changes to their businesses. This is all intentional.
Does anyone really question that growth over the past 10 years, particularly in the 2020-2021 COVID money printing era, wasn't due to the macro environment?
Given how cheap/free money was for so long, it made total sense to hire and focus on growth and cornering markets without being concerned about margins or long-term profitability. Now that money isn't cheap, companies are concerned about those things and are making changes to their businesses. This is all intentional.
> Does anyone really question that growth over the past 10 years
You're right. People pretty much know that external circumstances are responsible for a large part of the growth of companies.
I think the parent commenter was highlighting that execs routinely claim responsibility for growth(and collect outsized rewards) while attributing a majority of problems to external factors out of their control(also while escaping consequences by redirecting them to rank and file). It's a sweet gig if you can get it!
You're right. People pretty much know that external circumstances are responsible for a large part of the growth of companies.
I think the parent commenter was highlighting that execs routinely claim responsibility for growth(and collect outsized rewards) while attributing a majority of problems to external factors out of their control(also while escaping consequences by redirecting them to rank and file). It's a sweet gig if you can get it!
> Does anyone really question that growth over the past 10 years
How many people have increased their salaries significantly over that time? Do you think they put it down to their own achievement or do you think they believed that they were merely riding an economic wave?
How many people have increased their salaries significantly over that time? Do you think they put it down to their own achievement or do you think they believed that they were merely riding an economic wave?
Pretty much anybody involved in the product, growth and leadership teams at any of those companies?
I think they're afraid of Temu.
You won't find that in the reporting, but it's begun materially impacting Etsy, and other large marketplaces like Amazon and Wayfair.
If you do a couple Google searches during the US evening hours for the kinds of products people often buy on Etsy, you may notice Temu shopping ads in all the top slots, outranking and outspending every US marketplace including Amazon and Etsy which would typically hold those first-page above-the-fold spots in the past.
Late this summer, the places Etsy sellers congregate to chat started getting widespread reports of sales dropping off a cliff, to levels not seen in years, for new and veteran sellers alike. The plummet in Etsy traffic coincided with Temu beginning to replace Etsy in Google Shopping ads at the top of Google searches.
You won't find that in the reporting, but it's begun materially impacting Etsy, and other large marketplaces like Amazon and Wayfair.
If you do a couple Google searches during the US evening hours for the kinds of products people often buy on Etsy, you may notice Temu shopping ads in all the top slots, outranking and outspending every US marketplace including Amazon and Etsy which would typically hold those first-page above-the-fold spots in the past.
Late this summer, the places Etsy sellers congregate to chat started getting widespread reports of sales dropping off a cliff, to levels not seen in years, for new and veteran sellers alike. The plummet in Etsy traffic coincided with Temu beginning to replace Etsy in Google Shopping ads at the top of Google searches.
Interesting. Maybe my adblocker is getting a lot of that, what I noticed amongst my etsy-using friends was that Etsy itself was being flooded with the same sort of incredibly cheap "artisanal" as what Temu looks to be selling. It wouldn't surprise me if there was substantial overlap in the producers for all of that under the parade of shops that show up on Etsy, Amazon, etc.
Hmm. Based on the Wikipedia article, I can kind of comprehend this. They're making $921,146.95 / employee, yet somehow losing $236,200.71 / employee every year. Don't know where all their money's going, yet something does not look viable.
Apparently, Goodwill impairment, Cost of revenue, then marketing.
From: https://www.sec.gov/ix?doc=/Archives/edgar/data/1370637/0001...
Revenue: $2,566,111,000
Costs: $3,224,671,000
- Cost of revenue: $744,592,000
- Operating expenses:
Apparently, Goodwill impairment, Cost of revenue, then marketing.
From: https://www.sec.gov/ix?doc=/Archives/edgar/data/1370637/0001...
Revenue: $2,566,111,000
Costs: $3,224,671,000
- Cost of revenue: $744,592,000
- Operating expenses:
- Marketing: $710,399,000
- Product: development $412,398,000
- General and administrative: $312,260,000
- Goodwill impairment: $1,045,022,000If you're like me, and you had no idea what "goodwill impairment" meant, and wondering 'what does this billion dollar expense get Etsy?'
Investopedia: "Goodwill impairment occurs when a company decides to pay more than book value for the acquisition of an asset, and then the value of that asset declines. The difference between the amount that the company paid for the asset and the book value of the asset is known as goodwill."
> Goodwill impairment: Goodwill impairment expense consists of non-cash charges related to the impairment of the goodwill of Depop and Elo7.
This is a level of circular definition that makes the head spin. Depop and Elo7 were Etsy acquisitions. I haven't read the SEC filing in depth, but I assume this means that Etsy is acknowledging they overpaid on both these acquisitions, and that their value is in reality far less than they thought at the time.
I'm not sure what the accounting advantages are here for Etsy, maybe someone else with more knowledge could weigh in?
Investopedia: "Goodwill impairment occurs when a company decides to pay more than book value for the acquisition of an asset, and then the value of that asset declines. The difference between the amount that the company paid for the asset and the book value of the asset is known as goodwill."
> Goodwill impairment: Goodwill impairment expense consists of non-cash charges related to the impairment of the goodwill of Depop and Elo7.
This is a level of circular definition that makes the head spin. Depop and Elo7 were Etsy acquisitions. I haven't read the SEC filing in depth, but I assume this means that Etsy is acknowledging they overpaid on both these acquisitions, and that their value is in reality far less than they thought at the time.
I'm not sure what the accounting advantages are here for Etsy, maybe someone else with more knowledge could weigh in?
It's not really a circular definition because "impairment" and "goodwill" are two words with their own meanings in accounting/finance, so "goodwill impairment" including those two words separately in the definition isn't circular.
Goodwill is basically the extra value paid one company pays when buying another company. So if Etsy buys Depop for 1.6B, and of that 1.6B, let's say 600M were actual 'assets' (cash, inventory, whatever (not that Depop had those things when purchased)), then Etsy paid $1B (1.6B - 600M) in "goodwill" for Depop. That "goodwill" is basically the Depop brand, the desire for existing and potential customers to use Depop, etc.
Suppose Etsy wakes up one day and realizes that the $1B worth of Depop brand must be worth less. I don't know how they determine this, as the most realistic way would be if they were somehow shopping around to sell Depop off to another buyer, and all the offers are markedly lower than the $1.6B they paid for the same assets + intangibles. That difference is the impairment, to the goodwill.
Not sure if that made it sound less circular. I'm also not an accountant, but I've tried learning quite a bit about the subject.
Goodwill is basically the extra value paid one company pays when buying another company. So if Etsy buys Depop for 1.6B, and of that 1.6B, let's say 600M were actual 'assets' (cash, inventory, whatever (not that Depop had those things when purchased)), then Etsy paid $1B (1.6B - 600M) in "goodwill" for Depop. That "goodwill" is basically the Depop brand, the desire for existing and potential customers to use Depop, etc.
Suppose Etsy wakes up one day and realizes that the $1B worth of Depop brand must be worth less. I don't know how they determine this, as the most realistic way would be if they were somehow shopping around to sell Depop off to another buyer, and all the offers are markedly lower than the $1.6B they paid for the same assets + intangibles. That difference is the impairment, to the goodwill.
Not sure if that made it sound less circular. I'm also not an accountant, but I've tried learning quite a bit about the subject.
Thank you for that very well-stated explanation! TIL!
It's a way to effectively re-allocate losses into the current quarter/year before they are actually realized. For example, if I bought something for a high price and won't sell it until a year later, those losses won't show up until I sell them. I can use impairment to re-value those assets and "realize" those losses right now.
The way this is generally used in practice is that when a company is having a bad year or quarter and knows they are going to report losses, they will tack on a bunch of impairment so that future quarters and years don't look so bad. Having a bad quarter followed by mediocre quarters is much worse than having a very bad quarter followed by good or okay quarters.
It's not entirely nefarious, though. If a company is operating with good fundamentals and finances, you don't want that constantly being hidden by a bad decision or massive loss that really happened years earlier.
The way this is generally used in practice is that when a company is having a bad year or quarter and knows they are going to report losses, they will tack on a bunch of impairment so that future quarters and years don't look so bad. Having a bad quarter followed by mediocre quarters is much worse than having a very bad quarter followed by good or okay quarters.
It's not entirely nefarious, though. If a company is operating with good fundamentals and finances, you don't want that constantly being hidden by a bad decision or massive loss that really happened years earlier.
To get picky, it doesn't necessarily mean they "overpaid" it means the asset is now worth less.
You could make an argument that the two concepts are the same thing, but that's not really how business works.
For example you could have paid exactly what the market value was for something, maybe even gotten a "good deal" as of the date the deal closed, and the market could subsequently shift.
Like if they invent a cheap way to convert water to unleaded gasoline tomorrow it doesn't mean you "overpaid" for Exxon three years ago, per se.
You could make an argument that the two concepts are the same thing, but that's not really how business works.
For example you could have paid exactly what the market value was for something, maybe even gotten a "good deal" as of the date the deal closed, and the market could subsequently shift.
Like if they invent a cheap way to convert water to unleaded gasoline tomorrow it doesn't mean you "overpaid" for Exxon three years ago, per se.
"Goodwill" is a bit of an accounting trick: it's the difference between what a company is worth on paper and what the acquirer spent on actually getting it, meant to record the value of all the intangibles the acquirer is getting like existing relationships and prospects of future growth. It's the cost of convincing someone to sell their baby. Unless you're buying something like a gas station with very well understood economics, there's going to be tons of money "spent" on goodwill.
Goodwill impairment means they're (essentially) admitting to making a huge miscalculation on what that company was worth without a change in the tangible assets.
Goodwill impairment means they're (essentially) admitting to making a huge miscalculation on what that company was worth without a change in the tangible assets.
Wow, $1B goodwill impairment sounds absurd (for a company of Etsy's size). Had to look this up.
https://www.fool.com/investing/2023/02/02/etsys-1b-problem-t...
> In this case, Etsy believes that it overpaid by $1 billion for Depop and Elo7. A company normally takes write-downs like this when the results of an acquired business don't live up to the expectations at the time of the acquisition. That's not so good, noting that these two businesses are expected to be long-term growth drivers for the company.
https://www.fool.com/investing/2023/02/02/etsys-1b-problem-t...
> In this case, Etsy believes that it overpaid by $1 billion for Depop and Elo7. A company normally takes write-downs like this when the results of an acquired business don't live up to the expectations at the time of the acquisition. That's not so good, noting that these two businesses are expected to be long-term growth drivers for the company.
Aren't they just killing competition? Maybe it's worth the 1bill in the long term (for them, not for the customers)
If that were the case, they wouldn't have to declare the goodwill impairment. Goodwill is meant to account for the kind of intangible benefit they'd get from killing off competition.
The issue is, it doesn't matter what it's "meant" to do. It matters how it's technically implemented, and what they can legally claim without the claim running afoul of the IRS (or other tax agencies).
The key is this is how you get a (typically) non-amortizable asset off the balance sheet and expensed on the income statement when all those synergies and economies of scale promised by the (no longer with the company) executive who pushed the deal don't materialize.
Goodwill impairment: https://www.investopedia.com/ask/answers/061715/when-and-why...
“ If the goodwill asset becomes impaired by a decline in the value of the asset below the purchase price, the company would record a goodwill impairment. This is a signal that the value of the asset has fallen below the amount that the company originally paid for it.”
“ If the goodwill asset becomes impaired by a decline in the value of the asset below the purchase price, the company would record a goodwill impairment. This is a signal that the value of the asset has fallen below the amount that the company originally paid for it.”
Wow on that Goodwill impairment. If I'm reading correctly, it's from their previous acquisitions of depop and elo7. They paid about $1.9B for both of those, so the "impairment" means they effectively overpaid by $1B.
Wow this looks like some made an absolutely horrible acquisition investment (and quite possibly got promoted and bonused for it), and now as the company realizes that, it has to lay off people that had nothing to do with that decision?
I’m going to guess they’re mostly laying off the people from the acquired companies that resulted in that goodwill impairment.
These are numbers for 2022. This year they are supposed to be profitable.
Etsy must have written down the entire purchase of Depop.
I mean, they did an acquisition when money was cheap, now it all goes to goodwill impairment because they paid pre-interest hiked multiples. That is where the money is going.
https://www.nytimes.com/2021/06/02/business/etsy-depop.html
https://www.nytimes.com/2021/06/02/business/etsy-depop.html
Remember a couple years ago you’d constantly hear that “everyone needs to learn how to code!” and “we should teach programming in high school!”
Now that the layoffs have started I haven’t heard a peep from that crowd.
Now that the layoffs have started I haven’t heard a peep from that crowd.
From clues in the article I assumed these layoffs were in Marketing and HR. They consolidated HR and marketing leadership under the COO and a VP. Did you see evidence that the layoffs were in engineering?
Cool so summarizing the comments here - they overpaid 1billion dollars in acquisitions (would have been profitable this year otherwise) and are now laying off staff to recoup losses?
For a long time, how much staff you have at a company correlated with success.
The industry seems to be moving in the other direction - how much can you cut and still maintain profit? Interestingly, this seems to have always been (sory of) Apple's model.
The industry seems to be moving in the other direction - how much can you cut and still maintain profit? Interestingly, this seems to have always been (sory of) Apple's model.
I've been noticing something similar in the gaming industry as well. What is the least amount of features in a game that we can ship while still maintaining profit? AND how few people can we milk in DLC with this shell of a game to maintain profitability. (I'm looking at you Activision/Blizzard!)
It use to be build a great game with mass appeal and profit. Now its just how small can we make it and how much DLC can we sell to a small subset of people to equal profit.
It use to be build a great game with mass appeal and profit. Now its just how small can we make it and how much DLC can we sell to a small subset of people to equal profit.
I just checked their YOY earnings and Etsy has increased from 100 million to 600 million in revenue over the past 5 years, with 100 million in revenue growth over the past year alone.
Companies need to be shamed for potentially destroying people's lives while simultaneously reaping great rewards for their efforts.
Companies need to be shamed for potentially destroying people's lives while simultaneously reaping great rewards for their efforts.
I agree with your sentiment, but revenue isn't profit.
Where the money is going I'm more confused by.
Like, Etsy is based on a well-understood, popular business model - provide a digitasl storefront to sell physical goods. There are no hard or unique problems - their main advantage is name recognition in the indie-maker community.
So where is that money going?
Like, Etsy is based on a well-understood, popular business model - provide a digitasl storefront to sell physical goods. There are no hard or unique problems - their main advantage is name recognition in the indie-maker community.
So where is that money going?
Probably two or three key places:
- They have nearly 3000 employees, which seems like way too many
- Marketing and ads to increase reach and presence
- Acquisitions (h/t to ojbyrne in this thread)
Remember Uber was losing $2 billion a quarter, much of it going to pay for those reasons. Also I'm not sure how stock buybacks are accounted for, but Etsy did $290M in September according to this one chart:
https://ycharts.com/companies/ETSY/stock_buyback
- They have nearly 3000 employees, which seems like way too many
- Marketing and ads to increase reach and presence
- Acquisitions (h/t to ojbyrne in this thread)
Remember Uber was losing $2 billion a quarter, much of it going to pay for those reasons. Also I'm not sure how stock buybacks are accounted for, but Etsy did $290M in September according to this one chart:
https://ycharts.com/companies/ETSY/stock_buyback
Goodwill impairment (writing down stupid acquisitions): https://news.ycombinator.com/item?id=38630475
But that's a non-cash expense.
> So where is that money going?
To the previous shareholders of Depop and Elo7.
To the previous shareholders of Depop and Elo7.
A/B tests and their results. The industries biggest mistake…
Increased revenue != increased profits (or any profit at all)
See: Uber
See: Uber
the old joke about Amazon (which was never really true) was they lost pennies on every sale and made it up in volume. Anybody can grow revenue; the trick is to grow it faster than the cost of new revenue, and with a positive margin.
> Companies need to be shamed for potentially destroying people's lives while simultaneously reaping great rewards for their efforts.
Better yet, stop using these services.
But the long term solution is a legal change that ensures that the board of directors contains representation from employees along with share holders.
Better yet, stop using these services.
But the long term solution is a legal change that ensures that the board of directors contains representation from employees along with share holders.
> Better yet, stop using these services.
Can't think of any service that isn't "these" service.
Can't think of any service that isn't "these" service.
Private companies and mom & pop shops.
They seem to be main ones showing up protesting any wage changes here in the city.
recently
https://chicago.eater.com/2023/8/22/23842186/evanston-chicag...
They were also against raising minimum wage.
recently
https://chicago.eater.com/2023/8/22/23842186/evanston-chicag...
They were also against raising minimum wage.
If that representation is a minority then it doesn't matter. You can't solve overspending on staff by just keeping on spending, and that's likely what that representative will always advocate for.
I'm surprised they laid off executives as well.
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Don't they make a shit tone of money during the holidays?
89% too low?
Getting laid off in December isn't fun (getting laid off any time isn't fun), but I appreciate that our industry has developed a norm of generous severance. Four months+ pay is four months+ more than I got working at a non-profit in education.
If my work isn't paying for, whether due to "macro environment" or something else, it's better if I go do something where I am worth my pay, but not if I'm put in severe financial jeopardy during the switch. Providing several months of severance makes that transition, while still destabilizing and stressful, much, much easier. I wish more workers got this.
Now I'm thinking that next time I'm applying for jobs, one of my questions for them will be about any past layoffs. No company that's been around for a while will be able to say "we've never laid anyone off", but if one says "we let them keep their five-year-old laptop" and another says "we gave them several months severance pay", that will be a factor in my decision.