Companies need to stop doing this melodrama every time they decide to fire people. Everyone knows the goal is to make money and keep a company profitable for their shareholders. Why these melodramatic posts ? People would prefer honesty. Just say "We need to increase our profits or reduce costs or both and hence we have to lay people off. Here is what we are providing as a severance". That's it.
This case is clearly AI enabled “right sizing”, and it is inevitable for companies that aren’t seeing explosive growth. It seems like they are handing it well, better than most. Good for them.
Samsung executives by contrast have a tradition of taking serious pay cuts during bad years. Which is still largely performative given their existing wealth and status, but is at least is a measurable material sacrifice.
Treat people like professionals: admit that you did a bad job but that you’d rather protect yourself and not give up any of your salary/benefits and instead you are going to layoff your “family”.
They just forgot to mention it is a pretty dysfunctional one.
But they aren't foresighted enough to have handled the situation appropriately in advance. Or they might have run into the limits of their ability to empathise and only understand that they feel bad but not that the fired people probably feel worse. I'd bet more on the former.
In many ways it is a triumph of modern society how ordinary the people are who head these large and complicated world-spanning corporate entities.
The mediocre have just enough capability to do something right, but little enough that they're constantly surpassed by their more talented peers and never feel safe. So they go into "soft skills" that their more talented peers aren't interested in, and sandbag themselves with authority once they get it. For an extreme example, nobody is ever firing Mark Zuckerberg no matter how many obviously stupid bets he makes, and even if they did his family would have enough wealth for the next 10 generations at least.
This problem is hardly new or exclusive to tech, but we've endured enough decades of Silicon Valley navel-gazing TED talks without now trying to whitewash them as "well they're just ordinary people". Yeah, and I wouldn't trust an ordinary person to fly a plane, why should we feel good about them running companies?
But I was told that CEOs were descended from Mount Olympus itself! Billionaires too!
like reduce the salary of the c-suite staff by 50% so they are only making 300% more than the average workers. or reduce c-suite salary to the lowest wage while allowing them to live off of their stock and other benefits like company cars, expense accounts, etc. granted, that's for the larger companies, but the bigger companies never do anything like that
2.) The c-suite are compensated at market rate the same as anyone else. If the CTO at Patreon is making 400k/yr you can't just cut his salary to 200k, he will leave and take a job somewhere else.
It makes much more than a dent to the ~20 people not laid off, and a likely morale boost to everyone remaining.
> If you feel genuine responsibility for the people, then figure out a way to NOT fire them.
I have never seen that end well. One deep, clean cut, is far better than many little ones.
If you have to do back to back cuts because the first wasn't deep enough people start to panic. If you cut back the niceties, you're telling folks there is trouble and you're likely putting off that inevitability (and making the eventual cut deeper, with smaller pay outs for everyone).
The moment you sense the issue, look at the numbers. Figure out what the worst case scenario is, and look at that. Does a deep cut get the people going severance, and the "lets save everyone" approach mean your locking the front door and handing out last paychecks?
> Or be honest and admit that the company needs to make more money/cut costs.
This isn't the convo you have with the people who are leaving, this is the conversation you have to have with the people you didn't let go. Your choices are A) look like an asshole for cutting too many people or B) look like you did not cut deep enough and people panic or see that it isnt the last round. There is NO in between. The only thing that spares you in scenario A is that you gave people enough runway in their exit - 16 weeks (from the article) is a great starting point, but a week per year is an insult.
This concept is especially not applicable to profitable companies who have layoffs anyway.
Hyper-optimization and AI adoption isn’t actually a business requirement if your business is making a profit. Plenty of businesses refuse to play that game and still make themselves a good living.
Founders who want to claim emotional connection to their employees should think about things like converting the company to full employee ownership rather than thinking of themselves as a paternal benevolent dictator.
> Founders who want to claim emotional connection to their employees should think about things like converting the company to full employee ownership
In a previous (very small) company I worked we have tried something similar that and, guess what, some people refused. They just preferred market level salary, freedom and no ownership worries, rather than take some risks. They were good employees so we just continued with them. But I learned that not everybody has the same views and wishes, and life is quite complex (I was a founder and was always interested by ownership, so was quite surprised about their reaction).
For example when it comes to the IRS bill, the company will literally cease operations and sell all of its assets to pay IRS.
Why the employees do not deserve this?
If the company collapses, those people lose their jobs anyway?
> Why the employees do not deserve this?
It's not about what employees "deserve," it's about the simple fact that the law allows the tax authorities to wind up a business to cover the tax bill. See the UK, where HMRC wound up Rangers FC (https://en.wikipedia.org/wiki/Administration_and_liquidation...).
At this point I assume every employer wants to screw me in one way or another.
My first salaried job replaced me behind my back since I went remote to look after a dying family member.
Corporations by definition are sociopathic entities. They can not ‘care’ about anything aside from maximizing profits.
Once I was on a call receiving the bad news and I immediately texted another job opportunity right then and there.
We’re not family , and we’re definitely not friends.
It's fine to fire people, and the severance here is very generous. Business leaders who need to feel like they are a generous parent or 'different' are weak and lying to themselves.
Finally while the severance is generous and to be applauded, all of the phrasing under the guise of caring about people was very transparently just an excuse to say over and over "we are making money and we aren't doing this because we have to" to his investors, which just rubs it in the face of the people being fired over and over. One final insult I guess.
Explaining why layoffs needed to happen, expressing remorse about it, and giving a good severance package is what serious adults with empathy for their employees do.
It's also a good way to maintain at least a neutral relationship with everyone you're laying off. Compare that to a company that coldly fires you with minimal severance, and delivers that message via some low-level lackey (not the CEO) – you, as the former employee, want nothing to do with that company ever again.
I also somehow didn’t hear that the leadership is taking a pay cut either, if money is so tight.
(Maybe 60 years ago it wasn't hypocrisy, but I lack personal evidence).
So just ignore them and do what's right.
There was an interview with Jay Leno I saw recently and he was talking about his NBC deal where he was going to be getting $30mil/year but they had to cut staff to do that so he decided to cut his own pay/raise to keep staff. That type of move by someone at the top is rare or never happens with CEOs. I think Nintendo might be the only case I can think of where I heard something like that happening. That type of move evokes an "all in it together" type of team vs. a clear delineation of CEO/executives and employees.
The melodrama is performative because they have to maintain the mask/facade that they are "teammates".
Reminds me of Ozymandias speech when he says to Dr. Manhattan, that he has personally exprienced the pain of millions of New Yorkers he is about to decimate in the Nuclear attack.
In both the Watchmen graphic novel and the 2009 film adaptation, Ozymandias (Adrian Veidt) claims that he deeply feels and absorbs the psychic pain and deaths of the millions of people he kills. He views this immense personal suffering as his own tragic sacrifice for the greater good of humanity.
...to be told the truth? Quite a lot.
I've been inside companies that had to right-size their teams, it's not pretty, but my goodness honesty from management is better than pretending.
Attempts at empathy in cases like this read to me as insulting, like how you'd speak to a toddler. I know you're lying, you know you're lying, and now I have to pretend like I don't know you're lying. It's one more indignity of status being used against me and demanding I play a part and accept the lie, primarily for their ego.
Whereas directness feels more equal to me.
But there are ways to reduce headcount without causing waves. Those include things like simply not backfilling for people that leave the company or who are fired for low performance.
Letting a bunch of people go all at once is a sign of poor management and poor planning. Or it's a sign that Patreon wants to go public and ATM the stock market loves layoffs.
(I am making a normative claim, not a descriptive one; I am aware that that both CEOs and laid-off employees do in fact take it personally at times.)
In the US definitely the agreements are more flexible.
In Europe (and probably elsewhere) I feel that the expectation was (at least some years ago) that once you join a company the relation is stronger.
Each variation has pluses and minuses, for companies and individuals.
People expect it and get very angry if such posts do not appear contrite. I share your cynicism and would prefer they just say it like it is, but that doesn't work for most people.
I know it's not usually true, but this is Jack Conte, not Mark Zuckerberg. Maybe he's one of the few CEOs who still has a human brain. I know I would feel legitimately horrible and sympathetic if I had to lay off a bunch of people.
Patreon is profitable. He doesn’t have to fire anyone to continue operations. He just wants more money.
If he cared about them as beautiful people, he wouldn’t fire them.
It’s one thing if you’re bleeding cash and have to cut. Another when you discover a cheaper way to do things and don’t want to retrain and grow in new ways where you’d need people.
Patreon CEO is full of horse apples.
Coarsely, people prefer things that don't hurt their feelings or that don't scare them. Sometimes that's candor; sometimes it is indirectness. Complicating matters further, different people will have different preferences in the same situations.
Some may wax la philosophie politique at times, but we tend to do that in the abstract when things are at an arms length.
At the end of the day, people made a choice between a corporation and a narrow group of stakeholders over employees and the downstream community influence of their buying power, likely a large group and certainly a different group.
You could argue in the long run it is better for society for companies to make these decisions, and many times that may actually be the case. But, in this one instance, when you place it all on the scales, they were not doing it to save a company or make its products and services more competitive in the market. There was nothing "existential" about it. They wanted to go from one profit level to a higher profit level for a certain group, and that is just what they did.
Most of the time it's an attempt to stifle negative opinions of those reading the layoff announcements. But in the modern day it's getting old because we see a new layoff every day now.
Everybody knows we aren't a family, and we're doing this to get paid not for some contrived company mission.
I'm convinced with most of these layoff announcements people would take it better if they literally just said we're getting rid of N people for X,Y,Z reasons and called it at that without the presumptuous bullshit.
Morale. It’s important that the remaining employees are psychologically secure. They’re trying to make sure they know the company isn’t in jeopardy and that management has them in mind.
Some research supports this https://www.researchgate.net/publication/228120426_Survivors...
In my /opinion/ a personal address, one on one assurances from a trusted manager, this might be more effective, but HR also needs to be careful that the messaging is consistent so this kind of post is probably seen as the best alternative
I do not understand why I’m supposed to care.
Real "Oh no! So sorry to see you go totally by your own choice" vibes.
The business is "solid", but is it not profitable? Who is cashing in on cutting these jobs? Which exec is losing their job for overhiring?
If a company is genuinely losing money and needs to boost it's profitability surely the easiest place to cut costs is the top where the lowest ROI positions are.
Always goes back to that story from Nintendo when the Wii U went pear-shaped on release, Satoru Iwata and many other executives all took substantial pay cuts to keep the company healthy without demolishing their own ranks. Be nice to see an American company do that just one time, as a treat.
Who the hell is buying anything if more than 50% of the workforce is unemployed? And among the post-AI employable, every job that isn't highly skilled is going to have the wages pushed to the floor due to rampant unemployment.
None of this shit works unless we figure out "Star Trek welfare"...
If that's what they actually believe, they could just say it.
They don't because optics are more important than honesty. Can't spook would be investors. Must control the market's narrative about the viability and growth-trajectory of your company at all times. It's tiring.
IBM went seven decades without layoffs. Yes, part of that was the unique situation of post WWII America. But read TJ Watson Jr.'s words - they really took seriously the fact that they weren't just a business - they had a responsibility to people who worked for them. IBM went through a LOT of transformation in those seven decades BTW - they somehow found ways to re-deploy people in their growing business each time.
The words of this CEO are about as good as they can be under the circumstances, but all the happy talk about "special, beautiful humans" and "Patreon’s core business is healthy and strong" and "we’re not changing our roadmap or priorities" are obviously self-contradictory. Of course, if your business can't survive with its current headcount, it would be foolish to run it into the ground - then everyone loses. But this doesn't appear to be the case here.
He took a long time to get to the punch line: "AI has fundamentally transformed the tech industry, though, including how we work, how we build products, how we communicate, and more. That does have an impact on how we operate and organize."
So, there it is, finally. Management realized we can do the exact same thing with 20% fewer (more productive) employees. That means the shareholders (including the CEO and the remaining employees), will have a more valuable company. Sorry, we couldn't share this with the 20% we let go, who helped build the company to this point, and we can't even wait for our business to grow into our headcount, which if everything is so rosy, should be a matter of months. So good luck with the "my journey has come to an end, I am so grateful [to have been fired]..." LinkedIn posts!
Patreon is in the media/content business. It is perfectly reasonable to think that they have to rethink their company structure with AI completely destroying/changing the way their industry works.
And just a tip: many of your comments seem to belong on reddit, not here. Different culture, where short obnoxious takes aren't welcome.
personally, i preferred the short version
I'm tired of seeing American workers bear the brunt of the stupidity of the executive teams that have done their job so poorly as to suddenly need to lay off workers. If you are a leader and you are put in this situation, it is because you are a terrible at your job. It's not the market, it's not AI or some unforeseen disaster...it's because you had your head up your ass instead of actively running the business.
I’d like to be convinced of this point.
To be fair, tech companies I've worked at that have done layoffs have had seemingly full-time CEOs. So I guess at least Jack is having a good time.
You're not a slave to your employer. You have all the same autonomy that they have. No one is forcing you to be there.
People are so hopelessly confused about what a business relationship is. They actually drink the kool-aid of "We're a family here". No, you're work is not your family, it's a business, treat it like one, because I can assure you that leadership does.
Is that really true?
https://standout-cv.com/stats/how-long-does-it-take-to-get-a...
They found 3.8 months which sounds realistic. I can't imagine the average being significantly longer (like 6+ months?).
> Graduates take an average of 5.6 months to land a job in the UK. This is almost 2 months longer than the national average
also noting the average includes, at the fast end,
> Job Average time to get a job (months) > Bar staff 1 > Sales assistant (retail) 1 > Waiter/waitress 1.2 > Delivery driver 1.2
It doesn't take 4 months to find a job. Life goes on.
Last I heard they also do their own payment processing, which is a substantial technical problem.
It seems like a wild choice to give a specific figure as additional cash rather than just letting them keep their (wiped) laptop. That additional cash will be taxed (as should a laptop that is left with the ex-employee, but the used laptop can be valued and taxed as a used laptop rather than a $1500 cash payment [and frankly would often be, um, overlooked...).
It seems like it's better for Patreon (cheaper, less IT labor) and approximately as good for the ex-employee to make this be in the shape of the used laptop than a $1500 payment.
Also, many employees likely have their own personal laptops and may not have any use for them.
EDIT: My wife didn't until she got "second job" as volunteer and needed to do some real work. Before that, she was planning entire vacations from her phone.
If you're calling me "special" and "beautiful" and removing my ability to pay my mortgage in the same sentence through no fault of my own, you can absolutely get in the bin.
Fundamentally weird behaviour.
“It's not personal Sonny. It's strictly business!”
>Creators, members, revenue, and processing volume continue to show strong, consistent growth every month.
lol strong consistent growth -> 20% layoff
It wasn’t, I bet executives were laughing reading that
They are just numbers to them
> Second, Patreon’s core business is healthy and strong, and we’re going to be a rock for creators for decades to come. Hundreds of thousands of creators rely on Patreon for their livelihoods, businesses, ...
> We’re reducing the size of our team by 20%, or ...
I guess this is the "reason" but obviously they aren't elaborating. It's odd they picked "6 months" - what changed in "the market"?
Substack is a huge competitor that has grown dramatically in that time. Beehiiv is another competitor that just launched a bunch of new features. Porn and sexy content is now on Onlyfans, which was just becoming mainstream during the pandemic.
More recently, some podcasts have started focusing on YouTube and may be less interested in the paid-elsewhere subscription model.
People really need to look at this stuff more strategically. The knee jerk reactions are not productive.
I’ve worked for startups that will show massive customer churn, tell us that this is “actually a good thing”, do massive layoffs the next week because of the churn, and even while talking about the layoffs say that they’re stronger than ever.
I’ve been doing this long enough that I am mostly used to the gaslighting, and have just accepted that business people have neither the ability nor desire to ever be honest about anything.
Another plausible explanation is survivorship bias: if businesses that are publicly honest when things are going poorly are less likely to survive then eventually surviving businesses are more likely to be dishonest irrespective of the "abilities" or "desires" of individual business people.
Well let’s play out the alternative then: a CEO comes out and says everything is not ok and you’re laying off people because you are in dire straits. I admire the honesty, but what do you think happens next?
I just don’t think causing a panic is the same thing as honesty. You don’t have to freak everybody out about the health of the company or completely lie about the state of things.
It does under reason for reduction, quoting: At the same time, the market in which we operate has undergone profound change over the last 6 months.
> giving reasons why there's no need... Patreon’s core business is healthy and strong
Actually that's the reason. It says Patreon's core business is strong i.e. everything else isn't? You don't state the obvious unless there's a gotcha.
Thst is valid reason to layoff people. If there is no mess to clean, you do not need that many cleaners.
They really should be running sustainable service for like tenth of that many employees... If even that. Most of the people don't care about them just the creators on their platform and less cut they take better for patrons or patronees.
If we don't run a business then we're running a business of a single employee. You are your own employee with 100% concentration risk. All of your income depends on one employee (you) with 1 source of income. If you had a business with 1 single revenue stream, then you would really focus on the health of that stream (Patreon). If you look around and realize most people are coasting and you can't really point any specific action you've taken that's boosted the numbers then you need to start preparing for that client (Patreon) to end its deal with you.
Every tech CEO was watching that closely, and it didn't come out in the workers favor.
I have, but it also publicized seven completely different business units. It is easier to reason about why what are effectively seven different businesses need so many employees. Each unit did not have all that many people, however. They would all be considered small businesses if the company broke up those business units into individual companies. Patreon, on the other hand, seems to have only one obvious business unit.
But also most haven't. Across most of the western world, 70% of workforce work for small businesses and in Asian markets that rises to 80%+. Medium-large businesses are unusual. The USA is a curious outlier where only around 40% of the workforce works for small businesses. Some HN accounts forget it’s a big world out there.
You should talk to someone who works at Patreon. Or a larger creator on their platform.
I wouldn’t be surprised if they were over a billion in revenue at this point.
I would imagine big chunks of the company also aren’t technology. They seem like they have a sizable PR and marketing presence, community liaisons (read: support), HR to support it all, legal for dealing with illicit content that ends up there instead of OnlyFans, etc.
Twitter used to have 7500 employees and now it is working perfectly ok with 1500~
What am I missing from business perspective?
Can you point to some specific instances? I've seen it working just fine.
> Nothing about our core business has changed – it remains strong and consistent
a few paragraphs later
> But our transformation is going to take time
and the next paragraph
> At the same time, the market in which we operate has undergone profound change over the last 6 months. We need to adjust our cost structure
So is the business strong and consistent, or is it facing a rapidly-changing market, requiring that the business transform and adjust it's cost structure?
> To be clear about the impact of AI on today’s decision: we are not making the above changes because we believe AI replaces humans.
A few paragraphs later
> AI has fundamentally transformed the tech industry, though, including how we work, how we build products, how we communicate, and more. That does have an impact on how we operate and organize.
So do you think AI doesn't replace humans, or do you think that you'll need fewer humans because AI will be doing more of the work?
> or do you think that you'll need fewer humans because AI will be doing more of the work?
My bet is this one. To be fair, it isn't exactly an unpopular opinion. If I were starting a business today I'd plan to hire far fewer programmers than I would have just 2-3 years ago.
One which is present in a lot of layoff messages. Things are fine! Don't worry! Half the staff has to go because things aren't fine though.
Going on and on about how good these people are and then how well the business is going, as they are firing them.
"special, beautiful humans" "wonderful humans" "kind, ambitious, hard working, and mission-driven humans"
Please support my efforts through my Patreon account!
/s
Well, they do actually. They have a lot of restrictions on what 18+ content you can publish.
Like you can't publish "real" porn, or that's how I interpret this at least:
> Works depicting sexual activity between real, adult participants are not permitted.
Someone producing adult content within the boundaries of what the guidelines allow did pick the right provider, so I don't see a problem with them becoming a prominent creator on the platform.
I should have probably said I don't expect or want them to micromanage the prominence of creators on their platform that do act in accordance with their guidelines. If for some reason figurines became incredibly popular and someone would complain that Patreon is basically just a platform for figurine painters, so what?
They lay off 93 people so the total # employees before layoffs is 465 and it will be 372 employees remaining after layoffs.
In same post they state there are 300k creators making money on their platform, so the ratio of employees to creators is 1:645 before layoffs and 1:800 after layoffs.
It's a mature business and VC funding has significantly dried up for these kind of middlemen business models.
Why wouldn't 372 people having thousands of meetings between them per week be enough to run such a company?
Edit: If you downvote this without explanation I'd wager you never ran a company.