The only possible positive thing out of this cringy article is that the severance is decent (for a US company). 4 months of pay and healthcare coverage through Year end. Everything else could have just been a couple of sentences.
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.
It’s because, and I say this as a person who has made these calls, some leaders do feel a genuine responsibility for the people that work for them. Perhaps too, the ones that don’t, want people to think that they do. But as a founder and CEO by far the most emotionally taxing thing I have ever had to do is cut staff for the good of the company. You want to treat people the way you would want to be treated if you were in their shoes, but it doesn’t change the realities of the operation.
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.
I am a founder/CEO myself (a very small company so I don't have experience of mass layoffs for full disclosure). However, I don't get this explanation. If you feel genuine responsibility for the people, then figure out a way to NOT fire them. Or be honest and admit that the company needs to make more money/cut costs. Trust me, no one wants to hear "we love you so much but we have to fire you and I feel so bad". It just doesn't land. Be honest, be open and be willing to provide a good severance.
It reminds me of that meme template. “I feel responsible for this layoff.” “Responsible enough to mitigate it or lay yourself off?” “Well, no, not that responsible…”
It's not illogical, it's called leading by example. You consider it unrealistic because most corporate leadership, especially in America, never feels like doing it.
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.
Yes, much like the “we’re all family but we’re reducing headcount by…”
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”.
This is a good idea in theory, and in a lot of situations it's definitely under-used. But I don't think it's realistic to expect companies to never have to lay off employees.
That’s not always an option, and with the reckless exceptions aside, that’s usually been thoroughly explored. Any company would rather grow revenue and employ more people that shrink to accommodate changing markets.
Needing to make more money is a given, and they’ve probably explored that as thoroughly as possible. Cutting costs assumes that they have been so wasteful that the costs they can cut for meaningful savings doesn’t include employees that are no longer fuelling growth or revenue. Because if they were, they wouldn’t be letting them go.
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
1.) The c-suite is like 6 people, reducing their salary isn't going to make much of a dent.
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.
Ah, no, for sure you can just cut the salary by 50%?
And believe me, most people in well-managed company would accept it to keep the company alive. And y CTO with 400k wont "just find a new job with same payment" next day, thats an illusion. Especially nowdays in these times.
If I would be asked: "reduce your salary by 50% or get fired", for sure I would stay if there is a perspective that the situation may recover in the future. If the company has no perspective future, then you would leave anyway (either implicitly or explicitly by them)
>1.) The c-suite is like 6 people, reducing their salary isn't going to make much of a dent.
It makes much more than a dent to the ~20 people not laid off, and a likely morale boost to everyone remaining.
Edit: who are the sociopaths who downvote this? You don't think that someone not being laid off isn't going to have a much better outcome than had the been laid off? At least make an argument to the contrary...
There's a large contingent of HN users that are all too happy to brown nose their corporate overlords.
Also, this is still a ycombinator forum, it wouldn't be surprising if some people around are the ones that lay people off. You know, the sociopaths themselves.
Let 'em have em. They already messed up this company, let them go mess up the competition now. Sounds like a plan. Encourage the lowest performers to go.
There's perfectly fine reasons for a company to fail that are not the fault of anyone working there. Small startups relying on revenue from a bigger client at the beginning that shifts their spend, market changing quickly etc.
Which I think are all in the domain of the C-Suite to anticipate and handle, aren't they? If they aren't preparing for those situations then maybe they aren't the right folks for the job.
The paradox can be resolved by assuming they are fallible and limited human beings - they're laying a bunch of people off, they understand at some level that this is evidence that their poor hiring and management decisions have caused some amount of unnecessary suffering, so they feel bad.
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.
Is it? Another is that modern society has created a system where advancing to the top ranks of corporate and political leadership requires mediocrity, and excellence is actively discouraged past a certain level of authority.
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?
> So they go into "soft skills" that their more talented peers aren't interested in, and sandbag themselves with authority once they get it.
Maybe their more talented peers should learn some of these soft skills and take an interest in authority positions instead of acting like losers? Is there some smart-person conspiracy to put idiots in charge that nobody has clued me in to?
I don't want to be going too far in telling my talented peers their business, but if capable people aren't interested in doing anything to take a leadership position then the leadership is going to be incapable by definition.
In my experience, when someone (not being euphemistic, I've witnessed it many times) too mission-focused tries to get beyond program-level leadership they inevitably get sidelined and either coast to retirement or demote themselves back down. At a certain level making good products on time and on budget is no longer the game, and feeling an obligation to do so is looked down upon as naive. Additionally, failure is not punished in any material sense.
Boeing's leadership doesn't care about their aircraft quality beyond legal liability, Meta hasn't cared about the quality of the facebook newsfeed in over a decade, Elon Musk doesn't care about making cars or colonizing Mars anymore, and rest assured Pateron's leadership will be just fine in every material sense, the worst they have to worry about is reputational loss that will likely be short-lived.
Put it all together and you get an incentive structure where outside of small companies/divisions, and the rare exceptional leader, the people who care about the products the least are the ones that make it into leadership, and good luck convincing that club to change their priorities.
I have been through the process of cutting staff in a few different roles (director, outside consultant), more times than I care to count.
> 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.
> If you feel genuine responsibility for the people, then figure out a way to NOT fire them.
That kind of sounds like saying "if you're poor, make more money". It's not bad advice but odds are, they tried.
If a company can take a hit to its bottom line by being bloated and inefficient but saves jobs, is that the right thing to do?
Edit: I can see good arguments either way. The neoliberal idea that all waste should be eliminated seems almost communist / soviet IMO. The USSR grew like crazy by putting people into factories and working them as hard as possible, removing all waste. But with no slack they couldn't innovate and productivity growth stalled. Our productivity growth has also stalled. We outsource or privatise so much that everything is just a race to the bottom with no space to grow, and finding looopholes in metrics or rules is the way to get ahead (like soviet factories finding out that they can churn out crappier products that no one wants but it helps hit a quota).
Employees are a disposable product. Need to ramp up fast? Hire some bodies. Don't worry you can ditch them in 3 months just in time to make shareholders happy.
Ofcourse the corporate class starts complaining nobody has loyalty and passion anymore.
I think what you’re describing is only a fraction of leaders and possibly a small minority of them.
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.
The profit by itself does not tell the whole story. There are loan repayments, investments and possibly other financial deals.
> 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).
Just as most organizations beyond a certain size will have a few people who reach a plateau where they are content and do not want any more responsibilities or pay. They don't want a new title, they don't want more prestige, they don't even want a raise. They just want to do what they do.
Even founders that don't naturally empathize with employees they need to cut encounter a process that is emotionally taxing. It's just not an easy thing to do. If you handle layoffs badly it can impact your earnings potential, your social image and your psychological health.
> Why a company has to survive but not its people?
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...).
Keep whitewashing those idiot CEOs and companies, because of people like you, we have fascism in USA.
Muh muh company!!! It will collapse and everybody will lose theirs job, YEAH fucking right. Patreon gonna collapse if they won't make a fucking 5% increase by lynching their own employees. Stop being so centrist for god's sake.
You should really look into who Jack Conte is and why he created Patreon. He's a smart guy who relies heavily on maintaining a positive social image and is more emotionally aware and stable than most tech founders. I imagine from his perspective the decision, severance and post were all just the smart thing to do.
His name is Jack, and I would describe him as a deeply weird narcissist. You got the "relies heavily on maintaining a positive social image" part right.
They feel a genuine responsibility to avoid the buzzing sound in their head that results from trying to believe and make other people believe they feel a genuine responsibility for people while taking actions that are the polar opposite of anything that you do to someone you feel responsible for purely to increase your own and your investors wealth.
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.
Because part of being a CEO is having social skills, and doing what you suggested is extremely socially inept.
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 tend to agree. But the devil's advocate in me says that then they'd be accused of not having empathy. That sort of thing might work in Europe — but for a US company, I think you have to pay some lip service to emotions.
"Not having empathy" may have made sense 20-30 years ago when mass layoffs weren't as common as nowadays. Nowadays, everyone knows how it works and how much they really care about the employees. Nothing is worse than someone faking empathy especially CEOs (and I am a small time founder/ceo myself even though of an extremely small company).
Even big US companies today are full of "Is this good for the company?", "Our company values" and other cringe-inducing loyalty/ethics-related propaganda, about as much as 30 years ago. So they are keeping the charade, for better or worse, even though it is as much hypocrisy today as it was 30 years ago.
(Maybe 60 years ago it wasn't hypocrisy, but I lack personal evidence).
20 to 30 years ago was 1996 to 2006. Layoffs were very common, due to outsourcing to cheaper countries. It was common knowledge in my college years of the early 2000s to not expect a long tenure at any employer, and to always be applying to new positions.
There is no way to fire a lot of people in a way everyone likes, only ways which suck more than others for different people. Whether you think they are dramatic is not one of the sucks they are very concerned with as you're one if the ones who will forget this layoff in a few hours
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.
Not trying to be snarky, but how exactly? How would it help your mental health to be told "your work was borderline useless anyway and we needed to get rid of you to boost shareholder value. Goodbye!"
Because that's the truth and just because you fake empathy, the person getting fired knows what their worth to the company was. Sure there are people who don't prefer to hear the truth but most employees would. In fact, I would go as far as to say that firing someone by accepting the truth is more empathetic than lying to their faces and crying crocodile tears.
I prefer extremely direct communication because it signals respect to me.
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.
You can have cutesy names for employees and a culture with mission statements/purpose, etc. but when it comes down to it, if you're doing layoffs no collection of words is going to appease those that are let go and no collection of words is going to appease those left behind. "Teammates" is probably less cutesy than other companies but still evokes some sort of "we're all in this together" vs. straight up employees when in fact they aren't all in it together, at least not the execs.
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".
> First, the people who work at Patreon are special, beautiful humans, through and through. The energy that our team has for Patreon’s mission is a force of nature. So many wonderful humans are going to lose their jobs today in an especially painful moment and market. I am the person responsible for that decision, and I take that with the utmost seriousness.
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.
Apparently this is an unpopular opinion on HN, but a job isn't an output that companies produce, it's an agreement to compensate an employee in exchange for services, and just as the CEO shouldn't take it personally when one leaves to go work elsewhere, nobody needs to act like it's some kind of invidious social contract violation when the company no longer needs some of those services. In other words: resignation and termination are ordinary exercises of each's right to reallocate its resources.
(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.)
Humans are tribal creatures, and joining a company and working with the same people every day creates bonds, a feeling of loyalty, and feelings of betrayal and unease when told they no longer belong.
> 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 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.
What if he actually cares, and this is him being honest?
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.
Businesses don't exist in a vacuum. If you discover a cheaper way to do things, and don't do it, a competitor probably will, and you will then find yourself in the "bleeding cash" scenario (or, more likely, starving for cash).
Generally, but this is also an exaggeration we tell ourselves about the cut-throat world of business. In reality, you don't have to be number one in any given metric to be profitable.
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.
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.
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 just got laid off after sitting through a company town hall meeting explaining why the reason we’re all being laid off (replaced with Cognizant + Anthropic colab) is totally awesome and great for the company’s future.
Because it was never about you. They have to fake empathy and provide "explanations" because they think its the "Safer" way. You already know that of course.
Most of the time I'm convinced its just an attempt to garner sympathy from the general public/outsiders. While obviously not true for all but the vast majority of these executives and C-levels could not name any of the people they are getting rid of in the first place.
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.
Of course the public relations is all spin. Corporations do not have feelings. Individual managers may feel one way or the other. It is likely those feelings are highly rationalized by how the change affects them individually. Will they make more money? Will they take on added duties without an increase in money?
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.
Because they have to get back to work after. It's a shit leader attitude to admit you just traded humans for profits - you have to keep pretending. On the other end, employees keep pretending they are passionate about X, Y or Z and not just there for the dough. It's a delicate balance.
And why not fire that exec who doubtlessly costs the company far more money while adding substantially less value than any of these employees?
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.
I still don't understand the economics of the full AI rollout.
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"...
When you think about it, we're only "useful" to billionaires because we have something that they want, and that something is not called "work". Work is just that thing that people must figure out before they can generate wealth. Money is the goal, work is just something in the way.
As most human tasks are automated away, the bargaining power of the (figurative) 99.9% of people who were actually producing wealth by doing actual work will converge towards zero.
I wish I had something positive to share, but if you don not happen to be a billionaire, then the future looks grim.
Agreed. That said, when it does get grim, a few billion of net worth probably isn't as consoling as it used to be for the billionaires when the head of your security team has instated himself as chief warlord of your bunker and you're no longer allowed to make eye contact with your former wife and mistresses.
in the short term, ai has been job-creating and unemployment remains quite low. The technology has mostly been augmentative (like every other technological revolution beforehand)
if (big if) the technology continues to improve at the current rapid pace, then we would need to organize welfare for the bottom % of population that cannot compete with ai or robotics in any feasible way, but that kind of presupposes insane productivity growth such that living off 'welfare' is a life of luxury compared to the average life right now
In the year of our Lord 2026 when you can be fired for not churning enough tokens, you can believe any corpo-post corpo speak has been checked by their LLMs for "compassionate voicing" and "low risk wording"
No matter what, people who write articles about layoffs like this go straight onto my 'people to stay far away from' list. He is on it since the crying video of the last round of layoffs.
I watched this dudes youtube channel where he makes music for years before I ever knew he was the CEO of pateron. It was a bit of a wtf moment when I found out.
That they should be so lucky to have such a present CEO! Why ours sits on the board of multiple companies in unrelated industries, and manages some entirely unrelated business side of another conglomerate all by himself. Thankfully he's been promised several 10s to 100s of millions of dollars to make our company better now
I'm the opposite - I wish people wrote like this more often. Basic humanity needs to make a comeback before we all kill each other.
With the enormous caveat that this writing is honest, and I imagine you are implicitly including "it's not honest" in your grievance, which is a totally reasonable guess. We rightly assume CEOs are usually not honest when it comes to sympathizing with employees.
Saying that would be a much more reasonable layoff announcement. "Shit is good. But not that good. If we don't change course now, things may be less than good."
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.
We like to point this out - but it's very rarely the actual stakes on the table. It's just something we point to to justify layoffs. It's very rare that the thing standing between a business existing and not being able to exist is a round of layoffs. We almost always do layoffs to make more profit, not to save ourselves existentially (which are two related-but-different things, as much as some of us would like to pretend that they are the same thing).
The negative metric is more important - if you can cut staff costs by 20% with only 5% reduction in revenue/innovation that’s a win from an investor’s perspective.
Not really. Investors want profits yes, but value is based on largely on expectations of growth. Declining revenue is not a sign of a healthy, valuable company.
Why does someone always say this about a tech company when they have layoffs, regardless of company size?
465 employees is not that large. Patreon handles millions of transactions. They need support, sales, engineers, etc. If anything I'm surprised they're not well over 1000.
Ahh, but do you think it’s not large because other companies you’re familiar with are even larger, or because you can actually imagine breaking the necessary tasks into 465 parallel 40+ hour weeks?
I struggle to make sense of the employee counts at large companies too, and I own a small business and have started or managed several others in various industries. It really seems like it’s a circular employment scheme of sorts. On Monday JackPak releases version 2.0.31, which fixed nothing but now the blue is red and doit(task) has been deprecated and replaced by do_it(task). Incessant “new version = yass” mentality provides pay justifications on Monday to install it. Oops, do_it() is a performance regression and check_it() doesn’t work with JackPackER 1.98.03 - that’s critical stuff - so the support team justifies pay on Tuesday while engineers justify the rest of the week putting out fires. Designers scramble to “take advantage” of the new display_text(), which displays the same text as before, but with a method that isn’t supported by client programs older than a year, so a slice of traffic goes away. Someone is paid to report the dip in sales due to reduced traffic while someone else is paid to pump it back up. Had to build 20 new servers to handle the do_it() regression; someone wake up the NOC.
Entire buildings were kept busy, the service runs slower on supported client systems due to 100 new dependencies (they’ll want to upgrade soon, but will be forced to with the next version bump anyway), and the only discernible change is that the logon button has double the white space around it. Someone should change that so it has rounded corners, then make it triangular, transparent, retro-square again, put it in the hamburger, make it blue, 18 megabyte PNG, someone wake up NOC.
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!
I think this is an uncharitable take, and judging by these comments, a pretty common one today on HN – probably because there are less and less founders posting here, and more bitter employees. Patreon isn't IBM, it's not even Google or Amazon. IBM was above even FAANG in its day, it was practically an extension of the US government for decades.
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.
I would be more inclined to give to people via Patreon if there was a way to set a desired income amount and a transparent "overflow pipeline" for what happens with any extra money.
apart from the fact they are trying to make it in the most possible human way, it feels like they did not need to do it, or at least not at this scale at this moment. everything feels kinda weird in this letter.
> A $1,500 stipend to replace your company laptop.
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.
This seems more like a bounty for the laptop potentially full of company information, passwords, code, secrets, etc., which Patreon does not want out in the wild or to have to deploy lawyers to demand back. The carrot, rather than the stick.
I would assume they are company managed Macs so they could just order a remote wipe and then remove them from iCloud so they revert to their out of box setup.
Sure, but they’re still potentially sitting in limbo and turned off in the trunk of an employee’s car or whatever. If you’re concerned about leak issues, why not wipe them and have them shipped back for less than the cost of an extra week of severance.
Also, many employees likely have their own personal laptops and may not have any use for them.
In my experience, so many people these days do not have personal computer at home. Their personal computing is phone/tablet and if they game, it's done via a console.
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.
Might be different in USA? But while just about every reimbursement or perk is indeed taxable here in the EU… It is also used as a measure of how much you earn when calculating unemployment benefits, parental leave, and pension and such. For my own part about 23% of my pre-taxed income is paid to my pension fund.
What is it with companies doing mass-layoffs and stating no reasons whatsoever, in fact giving reasons why there's no need:
> 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 ...
What market is Patreon even in – the "facilitating crowdfunding for anyone looking to create things" market? There's not much competition there and I can't imagine it's profoundly changed in the last 6 years, let alone months.
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.
Despite what they're saying, I'd guess it's the totally-not-a-recession that's happening and they foresee people cutting luxury expenses (ie patreon subs) and they're trying to get ahead of it.
Locally at least, luxury services are booming. Patreon probably isn't a "luxury" in the traditional sense, but it's certainly a luxury for the lower/middle class. Agreed on the "totally-not-a-recession" reasoning - I'm just always curious which businesses are insulated from this type of economic headwind.
You usually do lay offs because finances aren't doing so good, so you do it to stop the bleeding. Especially if you're a publicly traded company this tells investors you're doing SOMETHING, but for private companies, it's really up to you when and how you do it. I imagine companies with a reasonable war chest that are private try to hold on as long as possible.
This isn't true. You usually do layoffs when you anticipate financial won't be good in coming quarters. If you wait until they aren't good then you're too late and the damage is done. This is why layoffs happen so frequently during "good" quarters.
Recession isn't the driving factor. Many companies will actually increase staffing during recession to "grow" out of it. My former company used to go on merger and acquisition sprees during deep recessions so they would be well positioned when it was over.
People really need to look at this stuff more strategically. The knee jerk reactions are not productive.
I think that they must teach in business school or something that you never, ever, EVER acknowledge or admit that things have ever or will ever go bad in your business.
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.
> 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.
Business schools teach advertising, not business management. In modern business it is a crime to tell the truth about the dire situation a business is in, unless a CEO is starting anew to fix a situation left by another, and even then it rarely happens.
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?
This assumes that it’s always a lie… The point is you’re supposed to say that it’s a hard time, but you’ve made the necessary changes and you’ll come out stronger (hopefully), because otherwise why would you have made them?
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.
Depends on jurisdiction, in many European countries a company with more than 300 employees can't do these kind of layoffs without giving a concrete reason, and if they do they need to close down a whole office location (e.g. we're closing our LA office, only SF office remains).
Read between the lines. "This thing ain't getting bigger so everyone we needed to get it here but don't need to keep it going has to go." Like a game studio laying half the team off once the product ships.
He sees what is coming. Crowd funding HAS to be dropping off as people choose between feeding their family or their favorite content creators (the creator will be fine as they have lots of other patrons is a guilt-free rationalization too).
I see others mentioning the severance package being decent for a US company. I'm glad they received something, but I'm sorry, can we stop calling this decent? It's markedly lopsided when a company can one day decide to lay off a large portion of their workforce and think 4 months is anywhere near acceptable. The average time to find a new job is significantly longer, especially depending on role and seniority.
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.
It's decent compared to the severance I just got for getting laid off: 2 weeks of pay and healthcare through the end of the month (at a tech company too)
I once worked for a company for 3 years, and during layoffs was offered... to work until the end of the month, and be paid for that. With no severance afterward.
If the executive team is stupid, and the company making bad decisions, you should be actively searching for a different job. I've never worked at a place where it was any secret when things were getting rough.
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.
What about your CEO actively spending their time pursuing their own creative interests and doing speaking gigs railing against AI? And posting them on the company YT and his own YT just a week before somberly announcing layoffs where you cite AI as part of the reason... https://www.youtube.com/watch?v=17_HcR95YBc
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.
Patreon entered my brain again recently only because Jack went to talk to The Verge on a podcast (text: https://www.theverge.com/podcast/952607/patreon-ceo-jack-con...). If you write a book or star in a film, you try to appear on every late night show there still is, etc. He’s trying hard to be relevant and position his company as good guys.
Now the rail against AI while laying off due to AI… would be quite ironic, but he seems more anti-theft while still excited about the tech. (Like me, theft is bad and open-source tech is neat.)
That doesn’t super shock me. They claim to have sent over $150M to creators in 2017, which is probably several million transactions. I think they do video and image hosting as well, not sure. It’s probably way more now but that’s the most recent number I saw.
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.
Make me always question what is going on in these companies. They are essentially a middle man reoffering payment providers services. Host some content. Lot of time just links to external platforms. There is some marketing but not really that much.
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.
I never understand these replies. Has nobody ever worked for a medium sized, yet global-reach company? I think a lot of HN has a very narrow view of how many different roles are required to run a company bigger than a local diner. Feels like a weird confirmation bias where “I only see a dozen engineers around me every day, therefore companies only need engineers to function.”
Hard disagree, the concrete evidence is that that can delete 20% of that bloated workforce and operate just fine.
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.
It's gone up in the ranking of most-visited websites [1]. I'm not even a Twitter/X user but that's a far cry from what the pundits were saying was inevitable.
True. Your comment prompted me to take a trip down memory land and look at the accounts I followed. A few are still at it, but the vast majority of them stop posting around 2016, which matches my recollection of the timeframe when most everyone stopped thinking about Twitter.
However, that doesn't answer why a company that wasn't what it used to be still needed so many people for so long.
> Has nobody ever worked for a medium sized, yet global-reach company?
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.
Twitter had a lot of side projects and people that were not needed to run their core business. E.g. they used to have a Linux kernel engineering team [1]. They argued their value, but I was always a tad skeptical. Even if they earned their keep in terms of ROI, Twitter can definitely be run without kernel engineers.
> First, the people who work at Patreon are special, beautiful humans, through and through.
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.
You could divorce a special and beautiful partner, and be making the right decision. A business decision that wrecks your life does not necessarily speak to any faults of your own.
“It's not personal Sonny. It's strictly business!”
The CEO probably believes it, which would make the difference to me. I think I would skim that line but perhaps it would have a subconscious benefit. Feels more human than weird to me.
We'll agree to disagree on that one. Feels more like a CEO trying to absolve himself of the human cost of a strictly business decision. Instead, he should own that business decision openly.
Being told I'm "special" and "beautiful" by my boss feels strange enough, but to have it paired with my termination? The dissonance is too much.
I am pretty sure they opened their excel sheet, ordered the employees by salary, and got rid of the highest paid 10% of each department. Or the lowest performing 10% based on a score in the excel.
There are so many contradictions in this statement that either the person who wrote it is completely muddle-headed, or just a bad liar.
> 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?
AI prompt: “Write a melodramatic layoff announcement that blames our problems on vague market/economic changes, suggests we need to transform, yet reassures investors that business fundamentals are strong.”
Nothing in there contradicts. A business that works well today may not work well tomorrow; it's management's job to change the business to better meet future conditions.
> 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.
I don't understand why this is problematic for some:
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.
The one time I ever paid for access to a creator on there, within the first month I got banned for being a bot (I'm not) and their customer service wouldn't help me. So my money was essentially stolen. Maybe all of these companies maximizing their automation so they can minimize headcount isn't a good thing for world.
The only possible positive thing out of this cringy article is that the severance is decent (for a US company). 4 months of pay and healthcare coverage through Year end. Everything else could have just been a couple of sentences.
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.
It’s because, and I say this as a person who has made these calls, some leaders do feel a genuine responsibility for the people that work for them. Perhaps too, the ones that don’t, want people to think that they do. But as a founder and CEO by far the most emotionally taxing thing I have ever had to do is cut staff for the good of the company. You want to treat people the way you would want to be treated if you were in their shoes, but it doesn’t change the realities of the operation.
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.
I am a founder/CEO myself (a very small company so I don't have experience of mass layoffs for full disclosure). However, I don't get this explanation. If you feel genuine responsibility for the people, then figure out a way to NOT fire them. Or be honest and admit that the company needs to make more money/cut costs. Trust me, no one wants to hear "we love you so much but we have to fire you and I feel so bad". It just doesn't land. Be honest, be open and be willing to provide a good severance.
It reminds me of that meme template. “I feel responsible for this layoff.” “Responsible enough to mitigate it or lay yourself off?” “Well, no, not that responsible…”
What an illogical and unrealistic meme template that is...
It's not illogical, it's called leading by example. You consider it unrealistic because most corporate leadership, especially in America, never feels like doing it.
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.
Yes, much like the “we’re all family but we’re reducing headcount by…”
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”.
We are all family!
They just forgot to mention it is a pretty dysfunctional one.
This is a good idea in theory, and in a lot of situations it's definitely under-used. But I don't think it's realistic to expect companies to never have to lay off employees.
That’s not always an option, and with the reckless exceptions aside, that’s usually been thoroughly explored. Any company would rather grow revenue and employ more people that shrink to accommodate changing markets.
Needing to make more money is a given, and they’ve probably explored that as thoroughly as possible. Cutting costs assumes that they have been so wasteful that the costs they can cut for meaningful savings doesn’t include employees that are no longer fuelling growth or revenue. Because if they were, they wouldn’t be letting them go.
> then figure out a way to NOT fire them
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
1.) The c-suite is like 6 people, reducing their salary isn't going to make much of a dent.
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.
Ah, no, for sure you can just cut the salary by 50%?
And believe me, most people in well-managed company would accept it to keep the company alive. And y CTO with 400k wont "just find a new job with same payment" next day, thats an illusion. Especially nowdays in these times.
If I would be asked: "reduce your salary by 50% or get fired", for sure I would stay if there is a perspective that the situation may recover in the future. If the company has no perspective future, then you would leave anyway (either implicitly or explicitly by them)
How does adding $200k back to payroll help pay for 96 employee salaries (plus benefits which tend to be an invisible 25-30% on top of salaries)?
There is a reason he hasn’t made it to management yet ^_^
If the CEO is only making $400k, that's not a very big company
> for sure I would stay if there is a perspective that the situation may recover in the future
And if you could support your family on that 50% for an undefined period of time.
Many of the C suite are just nepo babies.
citation needed
> The c-suite is like 6 people, reducing their salary isn't going to make much of a dent.
Depends on how much those 6 people make.
Have you seem C-level compensation in comparison to worker's salaries?
The corollary to 2 is: reduce all CEO pay across the board because of how disproportionate it is.
>1.) The c-suite is like 6 people, reducing their salary isn't going to make much of a dent.
It makes much more than a dent to the ~20 people not laid off, and a likely morale boost to everyone remaining.
Edit: who are the sociopaths who downvote this? You don't think that someone not being laid off isn't going to have a much better outcome than had the been laid off? At least make an argument to the contrary...
>Edit: who are the sociopaths who downvote this?
there are some people on this venture capital company forum that are venture capitalists. layoffs to boost profits is just another monday
> Edit: who are the sociopaths who downvote this?
There's a large contingent of HN users that are all too happy to brown nose their corporate overlords.
Also, this is still a ycombinator forum, it wouldn't be surprising if some people around are the ones that lay people off. You know, the sociopaths themselves.
> Like reduce the salary of the c-suite staff by 50%
Perfect way to lose your staff to your competitor.
Let 'em have em. They already messed up this company, let them go mess up the competition now. Sounds like a plan. Encourage the lowest performers to go.
There's perfectly fine reasons for a company to fail that are not the fault of anyone working there. Small startups relying on revenue from a bigger client at the beginning that shifts their spend, market changing quickly etc.
Which I think are all in the domain of the C-Suite to anticipate and handle, aren't they? If they aren't preparing for those situations then maybe they aren't the right folks for the job.
if a company is doing poorly enough to lay off people the c suite has already taken drastic pay cuts from their stock compensation
it's not as if stocks can't go up in value following a layoff. https://www.cnbc.com/2024/01/26/tech-layoffs-jump-in-january...
nor is it unheard of to lay off people even after highly profitable years
The paradox can be resolved by assuming they are fallible and limited human beings - they're laying a bunch of people off, they understand at some level that this is evidence that their poor hiring and management decisions have caused some amount of unnecessary suffering, so they feel bad.
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.
Is it? Another is that modern society has created a system where advancing to the top ranks of corporate and political leadership requires mediocrity, and excellence is actively discouraged past a certain level of authority.
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?
> So they go into "soft skills" that their more talented peers aren't interested in, and sandbag themselves with authority once they get it.
Maybe their more talented peers should learn some of these soft skills and take an interest in authority positions instead of acting like losers? Is there some smart-person conspiracy to put idiots in charge that nobody has clued me in to?
I don't want to be going too far in telling my talented peers their business, but if capable people aren't interested in doing anything to take a leadership position then the leadership is going to be incapable by definition.
In my experience, when someone (not being euphemistic, I've witnessed it many times) too mission-focused tries to get beyond program-level leadership they inevitably get sidelined and either coast to retirement or demote themselves back down. At a certain level making good products on time and on budget is no longer the game, and feeling an obligation to do so is looked down upon as naive. Additionally, failure is not punished in any material sense.
Boeing's leadership doesn't care about their aircraft quality beyond legal liability, Meta hasn't cared about the quality of the facebook newsfeed in over a decade, Elon Musk doesn't care about making cars or colonizing Mars anymore, and rest assured Pateron's leadership will be just fine in every material sense, the worst they have to worry about is reputational loss that will likely be short-lived.
Put it all together and you get an incentive structure where outside of small companies/divisions, and the rare exceptional leader, the people who care about the products the least are the ones that make it into leadership, and good luck convincing that club to change their priorities.
>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.
But I was told that CEOs were descended from Mount Olympus itself! Billionaires too!
And trillionaires are directly shipped from Mars!
It's like that scene in Moneyball where they have to tell the player that they've been traded/cut
That's a whole lot easier to do in a small company, but not very realistic beyond that.
I have been through the process of cutting staff in a few different roles (director, outside consultant), more times than I care to count.
> 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.
> If you feel genuine responsibility for the people, then figure out a way to NOT fire them.
That kind of sounds like saying "if you're poor, make more money". It's not bad advice but odds are, they tried.
If a company can take a hit to its bottom line by being bloated and inefficient but saves jobs, is that the right thing to do?
Edit: I can see good arguments either way. The neoliberal idea that all waste should be eliminated seems almost communist / soviet IMO. The USSR grew like crazy by putting people into factories and working them as hard as possible, removing all waste. But with no slack they couldn't innovate and productivity growth stalled. Our productivity growth has also stalled. We outsource or privatise so much that everything is just a race to the bottom with no space to grow, and finding looopholes in metrics or rules is the way to get ahead (like soviet factories finding out that they can churn out crappier products that no one wants but it helps hit a quota).
OTOH boated orgs kinda suck.
Employees are a disposable product. Need to ramp up fast? Hire some bodies. Don't worry you can ditch them in 3 months just in time to make shareholders happy.
Ofcourse the corporate class starts complaining nobody has loyalty and passion anymore.
I think what you’re describing is only a fraction of leaders and possibly a small minority of them.
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.
The profit by itself does not tell the whole story. There are loan repayments, investments and possibly other financial deals.
> 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).
Just as most organizations beyond a certain size will have a few people who reach a plateau where they are content and do not want any more responsibilities or pay. They don't want a new title, they don't want more prestige, they don't even want a raise. They just want to do what they do.
The "realities" being that increasing profits for a few people is more important than the lives of the people doing the actual work?
The "realities" being that increasing profits for a few people is more important than the lives of the people doing the actual work?
Why is AI enabled right sizing inevitable for companies that are profitable but not seeing explosive growth?
Even founders that don't naturally empathize with employees they need to cut encounter a process that is emotionally taxing. It's just not an easy thing to do. If you handle layoffs badly it can impact your earnings potential, your social image and your psychological health.
Why a company has to survive but not its people?
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?
> Why a company has to survive but not its people?
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...).
Exactly. With stroke of a pen a company is less important than its ability to pay taxes.
So we can put people above companies. With a stroke of a pen.
Did you miss this part?
> If the company collapses, those people lose their jobs anyway?
We can do what you suggest but the result is the same for the people being laid off.
Keep whitewashing those idiot CEOs and companies, because of people like you, we have fascism in USA.
Muh muh company!!! It will collapse and everybody will lose theirs job, YEAH fucking right. Patreon gonna collapse if they won't make a fucking 5% increase by lynching their own employees. Stop being so centrist for god's sake.
As someone who has been laid off or fired a few times. Just tell me when my last day is and cut my check.
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.
These posts seem more like emotional therapy for the founder, helping them cope. It's not about the people being let go at all.
You should really look into who Jack Conte is and why he created Patreon. He's a smart guy who relies heavily on maintaining a positive social image and is more emotionally aware and stable than most tech founders. I imagine from his perspective the decision, severance and post were all just the smart thing to do.
His name is Jack, and I would describe him as a deeply weird narcissist. You got the "relies heavily on maintaining a positive social image" part right.
That was a typo... thanks. I wasn't suggesting that he or anyone else is 100% altruistic but he seems like he genuinely thrives on collaboration.
yeah right, ceo's fighting for their people. stop this fucking bullshit, and go fuck yourself
They feel a genuine responsibility to avoid the buzzing sound in their head that results from trying to believe and make other people believe they feel a genuine responsibility for people while taking actions that are the polar opposite of anything that you do to someone you feel responsible for purely to increase your own and your investors wealth.
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.
Because part of being a CEO is having social skills, and doing what you suggested is extremely socially inept.
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.
If we are going to be honest we should be completely honest. "We want to increase our profits and hence we choose to lay people off."
> I am the person responsible for that decision, and I take that with the utmost seriousness.
I also somehow didn’t hear that the leadership is taking a pay cut either, if money is so tight.
I tend to agree. But the devil's advocate in me says that then they'd be accused of not having empathy. That sort of thing might work in Europe — but for a US company, I think you have to pay some lip service to emotions.
"Not having empathy" may have made sense 20-30 years ago when mass layoffs weren't as common as nowadays. Nowadays, everyone knows how it works and how much they really care about the employees. Nothing is worse than someone faking empathy especially CEOs (and I am a small time founder/ceo myself even though of an extremely small company).
Completely agree. That doesn't change the fact that people are fickle and want to have their cake even as they're eating it.
Even big US companies today are full of "Is this good for the company?", "Our company values" and other cringe-inducing loyalty/ethics-related propaganda, about as much as 30 years ago. So they are keeping the charade, for better or worse, even though it is as much hypocrisy today as it was 30 years ago.
(Maybe 60 years ago it wasn't hypocrisy, but I lack personal evidence).
20 to 30 years ago was 1996 to 2006. Layoffs were very common, due to outsourcing to cheaper countries. It was common knowledge in my college years of the early 2000s to not expect a long tenure at any employer, and to always be applying to new positions.
The media will spin whatever you do in whichever direction is maximally outrageous because that's what gets more clicks, eyeballs and ad bucks.
So just ignore them and do what's right.
There is no way to fire a lot of people in a way everyone likes, only ways which suck more than others for different people. Whether you think they are dramatic is not one of the sucks they are very concerned with as you're one if the ones who will forget this layoff in a few hours
All at once? Sure, no good way.
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.
Exactly. I would be insulted if I was part of this layoff, brutal honesty would be much better
Not trying to be snarky, but how exactly? How would it help your mental health to be told "your work was borderline useless anyway and we needed to get rid of you to boost shareholder value. Goodbye!"
Because that's the truth and just because you fake empathy, the person getting fired knows what their worth to the company was. Sure there are people who don't prefer to hear the truth but most employees would. In fact, I would go as far as to say that firing someone by accepting the truth is more empathetic than lying to their faces and crying crocodile tears.
> How would it help your mental health [...]
...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.
I prefer extremely direct communication because it signals respect to me.
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.
You can have cutesy names for employees and a culture with mission statements/purpose, etc. but when it comes down to it, if you're doing layoffs no collection of words is going to appease those that are let go and no collection of words is going to appease those left behind. "Teammates" is probably less cutesy than other companies but still evokes some sort of "we're all in this together" vs. straight up employees when in fact they aren't all in it together, at least not the execs.
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".
> First, the people who work at Patreon are special, beautiful humans, through and through. The energy that our team has for Patreon’s mission is a force of nature. So many wonderful humans are going to lose their jobs today in an especially painful moment and market. I am the person responsible for that decision, and I take that with the utmost seriousness.
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.
Apparently this is an unpopular opinion on HN, but a job isn't an output that companies produce, it's an agreement to compensate an employee in exchange for services, and just as the CEO shouldn't take it personally when one leaves to go work elsewhere, nobody needs to act like it's some kind of invidious social contract violation when the company no longer needs some of those services. In other words: resignation and termination are ordinary exercises of each's right to reallocate its resources.
(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.)
I think depends on the culture/country.
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.
Humans are tribal creatures, and joining a company and working with the same people every day creates bonds, a feeling of loyalty, and feelings of betrayal and unease when told they no longer belong.
> 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 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.
Agree. Also, protip: saying "right sizing" makes all your employees want to stab you in the eye.
What if he actually cares, and this is him being honest?
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.
I don’t buy that he cares.
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.
Businesses don't exist in a vacuum. If you discover a cheaper way to do things, and don't do it, a competitor probably will, and you will then find yourself in the "bleeding cash" scenario (or, more likely, starving for cash).
Generally, but this is also an exaggeration we tell ourselves about the cut-throat world of business. In reality, you don't have to be number one in any given metric to be profitable.
> People would prefer honesty.
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.
Appearances still matter, and IMO it will be really ugly if we all decide they don't.
It sounds like you don't know Jack Conte. This isn't a melodramatic AI written tome... The guy is heartbroken
> Why these melodramatic posts ?
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
So why not send this out as an email? What purpose does a public proclamation serve?
This type of BS wouldn’t make me psychologically secure. It would make me afraid because I can’t trust what leadership says.
I just got laid off after sitting through a company town hall meeting explaining why the reason we’re all being laid off (replaced with Cognizant + Anthropic colab) is totally awesome and great for the company’s future.
I do not understand why I’m supposed to care.
Because it was never about you. They have to fake empathy and provide "explanations" because they think its the "Safer" way. You already know that of course.
Most of the time I'm convinced its just an attempt to garner sympathy from the general public/outsiders. While obviously not true for all but the vast majority of these executives and C-levels could not name any of the people they are getting rid of in the first place.
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.
Of course the public relations is all spin. Corporations do not have feelings. Individual managers may feel one way or the other. It is likely those feelings are highly rationalized by how the change affects them individually. Will they make more money? Will they take on added duties without an increase in money?
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.
Because they have to get back to work after. It's a shit leader attitude to admit you just traded humans for profits - you have to keep pretending. On the other end, employees keep pretending they are passionate about X, Y or Z and not just there for the dough. It's a delicate balance.
The rich get richer and the poor get more AI edited and toned condolence posting.
That close out is brutal, "to our teammates who are leaving".
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?
And why not fire that exec who doubtlessly costs the company far more money while adding substantially less value than any of these employees?
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.
I still don't understand the economics of the full AI rollout.
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"...
When you think about it, we're only "useful" to billionaires because we have something that they want, and that something is not called "work". Work is just that thing that people must figure out before they can generate wealth. Money is the goal, work is just something in the way.
As most human tasks are automated away, the bargaining power of the (figurative) 99.9% of people who were actually producing wealth by doing actual work will converge towards zero.
I wish I had something positive to share, but if you don not happen to be a billionaire, then the future looks grim.
Do you think 99.9% of people will elect to just lay down and die?
Agreed. That said, when it does get grim, a few billion of net worth probably isn't as consoling as it used to be for the billionaires when the head of your security team has instated himself as chief warlord of your bunker and you're no longer allowed to make eye contact with your former wife and mistresses.
in the short term, ai has been job-creating and unemployment remains quite low. The technology has mostly been augmentative (like every other technological revolution beforehand)
if (big if) the technology continues to improve at the current rapid pace, then we would need to organize welfare for the bottom % of population that cannot compete with ai or robotics in any feasible way, but that kind of presupposes insane productivity growth such that living off 'welfare' is a life of luxury compared to the average life right now
As someone not good at identifying this myself, what about this post indicates AI editing?
In the year of our Lord 2026 when you can be fired for not churning enough tokens, you can believe any corpo-post corpo speak has been checked by their LLMs for "compassionate voicing" and "low risk wording"
Patreon just does this every few years. At least Jack Conte didn’t post a video of himself crying about it this time.
For anyone wondering, I looked it up and even managed not to mindlessly delegate it to an LLM—you're welcome!
First layoff was in 2022, 17%, claimed reason: economic downturn.
That was the last layoff.
So by "every few years" you mean, a single time a few years ago, yea.
Buckle in, our economy is flushing!
oh but he did - just in the conext of AI instead of his workers:
https://youtu.be/17_HcR95YBc
timestamp(s): ~33min and ~41mins
Kind of tone deaf of him to post a somber layoff message below his open-mouth laugh-smiling profile picture.
Lol imagine if he had changed his profile pic just for this. I don't think that would make him look any better.
An accompanying photo of the executive team saddened by the news sounds like just what folks need
He needs to be frowning and wearing all white.
His smile really says, "I'm so happy, healthy and am quite fond of my life while making music with my really cool celebrity friends!"
It was small enough I didn’t mind.
The page-blocking newsletter modal wasn’t disabled - boo.
No matter what, people who write articles about layoffs like this go straight onto my 'people to stay far away from' list. He is on it since the crying video of the last round of layoffs.
I'd prefer a crying video over the obviously Claude-written article.
I watched this dudes youtube channel where he makes music for years before I ever knew he was the CEO of pateron. It was a bit of a wtf moment when I found out.
He's playing the piano in this video too: https://www.youtube.com/watch?v=fiShsfvbFUA
Appears to be a full time musician and a part time CEO.
That they should be so lucky to have such a present CEO! Why ours sits on the board of multiple companies in unrelated industries, and manages some entirely unrelated business side of another conglomerate all by himself. Thankfully he's been promised several 10s to 100s of millions of dollars to make our company better now
Wow, I follow his band on Instagram. Had no idea he was the CEO of patreon.
Decent keyboard player too
Turns out, playing the keyboard for a ton of time makes you really good.
Can confirm
Upvoting this so more people see how cringey it's written.
I'm the opposite - I wish people wrote like this more often. Basic humanity needs to make a comeback before we all kill each other.
With the enormous caveat that this writing is honest, and I imagine you are implicitly including "it's not honest" in your grievance, which is a totally reasonable guess. We rightly assume CEOs are usually not honest when it comes to sympathizing with employees.
Bottom line: How do these layoffs increase the successful outcome of product launches on the platform in any way?
i think the goal is to increase profit by reducing operating expenses, not to increase the successful outcome of product launches.
Well if the company goes out of business because its not making enough profit then all product launches will cease.
Saying that would be a much more reasonable layoff announcement. "Shit is good. But not that good. If we don't change course now, things may be less than good."
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.
We like to point this out - but it's very rarely the actual stakes on the table. It's just something we point to to justify layoffs. It's very rare that the thing standing between a business existing and not being able to exist is a round of layoffs. We almost always do layoffs to make more profit, not to save ourselves existentially (which are two related-but-different things, as much as some of us would like to pretend that they are the same thing).
The negative metric is more important - if you can cut staff costs by 20% with only 5% reduction in revenue/innovation that’s a win from an investor’s perspective.
Not really. Investors want profits yes, but value is based on largely on expectations of growth. Declining revenue is not a sign of a healthy, valuable company.
In my subjective opinion, they don't. Layoffs almost always cause an atmosphere where taking risks is disincentivized.
They have 465 employees? That seems like a lot for what Patreon is.
They provide a lot of services and support to their bigger creators.
Last I heard they also do their own payment processing, which is a substantial technical problem.
Why does someone always say this about a tech company when they have layoffs, regardless of company size?
465 employees is not that large. Patreon handles millions of transactions. They need support, sales, engineers, etc. If anything I'm surprised they're not well over 1000.
Ahh, but do you think it’s not large because other companies you’re familiar with are even larger, or because you can actually imagine breaking the necessary tasks into 465 parallel 40+ hour weeks?
I struggle to make sense of the employee counts at large companies too, and I own a small business and have started or managed several others in various industries. It really seems like it’s a circular employment scheme of sorts. On Monday JackPak releases version 2.0.31, which fixed nothing but now the blue is red and doit(task) has been deprecated and replaced by do_it(task). Incessant “new version = yass” mentality provides pay justifications on Monday to install it. Oops, do_it() is a performance regression and check_it() doesn’t work with JackPackER 1.98.03 - that’s critical stuff - so the support team justifies pay on Tuesday while engineers justify the rest of the week putting out fires. Designers scramble to “take advantage” of the new display_text(), which displays the same text as before, but with a method that isn’t supported by client programs older than a year, so a slice of traffic goes away. Someone is paid to report the dip in sales due to reduced traffic while someone else is paid to pump it back up. Had to build 20 new servers to handle the do_it() regression; someone wake up the NOC.
Entire buildings were kept busy, the service runs slower on supported client systems due to 100 new dependencies (they’ll want to upgrade soon, but will be forced to with the next version bump anyway), and the only discernible change is that the logon button has double the white space around it. Someone should change that so it has rounded corners, then make it triangular, transparent, retro-square again, put it in the hamburger, make it blue, 18 megabyte PNG, someone wake up NOC.
On Monday JohnnyPak releases version 3.0.34.
Well, they _had_ 465 employees...
Yeah, they are not Discord, Gumroad, OnlyFans or Fansly.
Just going to lay this here: https://www.marketplace.org/story/2016/06/13/profit-ibm
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!
I think this is an uncharitable take, and judging by these comments, a pretty common one today on HN – probably because there are less and less founders posting here, and more bitter employees. Patreon isn't IBM, it's not even Google or Amazon. IBM was above even FAANG in its day, it was practically an extension of the US government for decades.
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.
My favorite part was when he clarified whether it is/isn't AI replacing jobs
I migrated off Patreon awhile back. It's extremely clunky, and the service charge is pretty high comparatively.
comparatively high compared to what alternative? are you getting the same support/services/exposure/etc. on whichever platform you moved to?
I would be more inclined to give to people via Patreon if there was a way to set a desired income amount and a transparent "overflow pipeline" for what happens with any extra money.
apart from the fact they are trying to make it in the most possible human way, it feels like they did not need to do it, or at least not at this scale at this moment. everything feels kinda weird in this letter.
> A $1,500 stipend to replace your company laptop.
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.
This seems more like a bounty for the laptop potentially full of company information, passwords, code, secrets, etc., which Patreon does not want out in the wild or to have to deploy lawyers to demand back. The carrot, rather than the stick.
I would assume they are company managed Macs so they could just order a remote wipe and then remove them from iCloud so they revert to their out of box setup.
Sure, but they’re still potentially sitting in limbo and turned off in the trunk of an employee’s car or whatever. If you’re concerned about leak issues, why not wipe them and have them shipped back for less than the cost of an extra week of severance.
Also, many employees likely have their own personal laptops and may not have any use for them.
In my experience, so many people these days do not have personal computer at home. Their personal computing is phone/tablet and if they game, it's done via a console.
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.
Might be different in USA? But while just about every reimbursement or perk is indeed taxable here in the EU… It is also used as a measure of how much you earn when calculating unemployment benefits, parental leave, and pension and such. For my own part about 23% of my pre-taxed income is paid to my pension fund.
With RAM prices how they are right now the used laptops might be more valuable than $1500.
I mean, I wouldn't want to have to bulk-purchase a large number of well-spec'ed laptops in this market. But you aren't wrong.
What are you bulk purchasing them for?
What is it with companies doing mass-layoffs and stating no reasons whatsoever, in fact giving reasons why there's no need:
> 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 ...
> At the same time, the market in which we operate has undergone profound change over the last 6 months.
I guess this is the "reason" but obviously they aren't elaborating. It's odd they picked "6 months" - what changed in "the market"?
What market is Patreon even in – the "facilitating crowdfunding for anyone looking to create things" market? There's not much competition there and I can't imagine it's profoundly changed in the last 6 years, let alone months.
Six years ago was a long time — summer 2020.
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.
Despite what they're saying, I'd guess it's the totally-not-a-recession that's happening and they foresee people cutting luxury expenses (ie patreon subs) and they're trying to get ahead of it.
Locally at least, luxury services are booming. Patreon probably isn't a "luxury" in the traditional sense, but it's certainly a luxury for the lower/middle class. Agreed on the "totally-not-a-recession" reasoning - I'm just always curious which businesses are insulated from this type of economic headwind.
You usually do lay offs because finances aren't doing so good, so you do it to stop the bleeding. Especially if you're a publicly traded company this tells investors you're doing SOMETHING, but for private companies, it's really up to you when and how you do it. I imagine companies with a reasonable war chest that are private try to hold on as long as possible.
This isn't true. You usually do layoffs when you anticipate financial won't be good in coming quarters. If you wait until they aren't good then you're too late and the damage is done. This is why layoffs happen so frequently during "good" quarters.
It's wild how there isn't officially a recession but many companies are acting like there is
Recession isn't the driving factor. Many companies will actually increase staffing during recession to "grow" out of it. My former company used to go on merger and acquisition sprees during deep recessions so they would be well positioned when it was over.
People really need to look at this stuff more strategically. The knee jerk reactions are not productive.
Generally you’re right damn dude 20% of their staff? They needed to stop the bleeding a long time ago clearly.
I think that they must teach in business school or something that you never, ever, EVER acknowledge or admit that things have ever or will ever go bad in your business.
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.
> 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.
Business schools teach advertising, not business management. In modern business it is a crime to tell the truth about the dire situation a business is in, unless a CEO is starting anew to fix a situation left by another, and even then it rarely happens.
Same with dentists
> say that they’re stronger than ever.
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?
A society that doesn't value honesty deserves to be deceived.
This assumes that it’s always a lie… The point is you’re supposed to say that it’s a hard time, but you’ve made the necessary changes and you’ll come out stronger (hopefully), because otherwise why would you have made them?
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.
I assume it is legal reasons.
Patreon is founder-led.
> stating no reasons whatsoever
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.
> core business is healthy and strong
Thst is valid reason to layoff people. If there is no mess to clean, you do not need that many cleaners.
Depends on jurisdiction, in many European countries a company with more than 300 employees can't do these kind of layoffs without giving a concrete reason, and if they do they need to close down a whole office location (e.g. we're closing our LA office, only SF office remains).
Read between the lines. "This thing ain't getting bigger so everyone we needed to get it here but don't need to keep it going has to go." Like a game studio laying half the team off once the product ships.
His gurning profile image with that post is certainly quite the juxtaposition.
>Creators are earning billions of dollars each year on Patreon, and those earnings have continued to exhibit steady, strong growth.
>Creators, members, revenue, and processing volume continue to show strong, consistent growth every month.
lol strong consistent growth -> 20% layoff
He sees what is coming. Crowd funding HAS to be dropping off as people choose between feeding their family or their favorite content creators (the creator will be fine as they have lots of other patrons is a guilt-free rationalization too).
I see others mentioning the severance package being decent for a US company. I'm glad they received something, but I'm sorry, can we stop calling this decent? It's markedly lopsided when a company can one day decide to lay off a large portion of their workforce and think 4 months is anywhere near acceptable. The average time to find a new job is significantly longer, especially depending on role and seniority.
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.
It's decent compared to the severance I just got for getting laid off: 2 weeks of pay and healthcare through the end of the month (at a tech company too)
I once worked for a company for 3 years, and during layoffs was offered... to work until the end of the month, and be paid for that. With no severance afterward.
4 months is not bad.
If the executive team is stupid, and the company making bad decisions, you should be actively searching for a different job. I've never worked at a place where it was any secret when things were getting rough.
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.
>instead of actively running the business.
I’d like to be convinced of this point.
What about your CEO actively spending their time pursuing their own creative interests and doing speaking gigs railing against AI? And posting them on the company YT and his own YT just a week before somberly announcing layoffs where you cite AI as part of the reason... https://www.youtube.com/watch?v=17_HcR95YBc
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.
Patreon entered my brain again recently only because Jack went to talk to The Verge on a podcast (text: https://www.theverge.com/podcast/952607/patreon-ceo-jack-con...). If you write a book or star in a film, you try to appear on every late night show there still is, etc. He’s trying hard to be relevant and position his company as good guys.
Now the rail against AI while laying off due to AI… would be quite ironic, but he seems more anti-theft while still excited about the tech. (Like me, theft is bad and open-source tech is neat.)
> The average time to find a new job is significantly longer
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?).
From the article
> 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 says senior engineer almost 8 months right in that article
Ok cool, but he just said the average. Not the average for senior engineers.
This attitude is why US engineers are 3x more than your European ones.
It doesn't take 4 months to find a job. Life goes on.
Seems like it was AI but not AI ;)
Honestly the most interesting thing to me here is that to took nearly 500 people to run Patreon.
That doesn’t super shock me. They claim to have sent over $150M to creators in 2017, which is probably several million transactions. I think they do video and image hosting as well, not sure. It’s probably way more now but that’s the most recent number I saw.
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.
Make me always question what is going on in these companies. They are essentially a middle man reoffering payment providers services. Host some content. Lot of time just links to external platforms. There is some marketing but not really that much.
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.
I never understand these replies. Has nobody ever worked for a medium sized, yet global-reach company? I think a lot of HN has a very narrow view of how many different roles are required to run a company bigger than a local diner. Feels like a weird confirmation bias where “I only see a dozen engineers around me every day, therefore companies only need engineers to function.”
Whatsapp had 55 employees until the buyout (of reported 19B).
And how much money did they make and distribute at that time?
My point is that pure tech-plays are relatively easy as far as headcount, right?
Hard disagree, the concrete evidence is that that can delete 20% of that bloated workforce and operate just fine.
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.
There's a lot of nice to have time and responsibility that an extra 20% of people get you.
Elon cut 80% of twitter staff and...well it's still there.
Every tech CEO was watching that closely, and it didn't come out in the workers favor.
Twitter is nothing like it used to be.
It's gone up in the ranking of most-visited websites [1]. I'm not even a Twitter/X user but that's a far cry from what the pundits were saying was inevitable.
[1] https://en.wikipedia.org/wiki/List_of_most-visited_websites
Unfortunately the litmus test wasn't a vibe check, but a technical check.
True. Your comment prompted me to take a trip down memory land and look at the accounts I followed. A few are still at it, but the vast majority of them stop posting around 2016, which matches my recollection of the timeframe when most everyone stopped thinking about Twitter.
However, that doesn't answer why a company that wasn't what it used to be still needed so many people for so long.
Yea Twitter is a terrible example. It’s not even a shell of what it used to be.
> Has nobody ever worked for a medium sized, yet global-reach company?
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.
They are not a “pure middle man.”
You should talk to someone who works at Patreon. Or a larger creator on their platform.
To me it's always mindblowing how the headcount of a startup can massively increase and the company still be considered a "success story".
I really don't get.
Twitter used to have 7500 employees and now it is working perfectly ok with 1500~
What am I missing from business perspective?
Twitter had a lot of side projects and people that were not needed to run their core business. E.g. they used to have a Linux kernel engineering team [1]. They argued their value, but I was always a tad skeptical. Even if they earned their keep in terms of ROI, Twitter can definitely be run without kernel engineers.
[1] https://danluu.com/in-house/
Ok now do the other 5990 employees.
no really, search is appalling, web version for mobile is full of bugs
Twitter does not work at all lol
It works as well as it ever did. Or the same level of not working.
> Twitter does not work at all lol
Can you point to some specific instances? I've seen it working just fine.
Haven't thought about patreon since they got political years ago and I canceled all my subscriptions.
> First, the people who work at Patreon are special, beautiful humans, through and through.
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.
You could divorce a special and beautiful partner, and be making the right decision. A business decision that wrecks your life does not necessarily speak to any faults of your own.
The CEO probably believes it, which would make the difference to me. I think I would skim that line but perhaps it would have a subconscious benefit. Feels more human than weird to me.We'll agree to disagree on that one. Feels more like a CEO trying to absolve himself of the human cost of a strictly business decision. Instead, he should own that business decision openly.
Being told I'm "special" and "beautiful" by my boss feels strange enough, but to have it paired with my termination? The dissonance is too much.
Have we ever had a boss like that?
It’d be weird if a boss were super rude to me but for those who worked for Steve Jobs, it would’ve tracked.
Maybe still have to agree to disagree!
>it was a hard decision
It wasn’t, I bet executives were laughing reading that
Getting rid of headcount was probably an easy choice, but picking how many and who stays can still be hard.
I am pretty sure they opened their excel sheet, ordered the employees by salary, and got rid of the highest paid 10% of each department. Or the lowest performing 10% based on a score in the excel.
They are just numbers to them
Maybe, more likely in my experience is that each manager solely selects for most obedient and flattering managees.
Pretty much, if you have a spine (even a scoliosis spine), you are out.
There are so many contradictions in this statement that either the person who wrote it is completely muddle-headed, or just a bad liar.
> 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?
AI prompt: “Write a melodramatic layoff announcement that blames our problems on vague market/economic changes, suggests we need to transform, yet reassures investors that business fundamentals are strong.”
If we throw all the arguments at the wall, one must stick right?
I think it's a bit more sinister. If they write everything they can claim later they "considered" it.
Nothing in there contradicts. A business that works well today may not work well tomorrow; it's management's job to change the business to better meet future conditions.
> 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.
They quoted text declaring both that things haven't changed, and that things have changed. There is a basic contradiction there.
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.
I can never take such statements seriously.
It is pretty serious for all those people who has been laid off.
I'm not saying the situation isn't serious. I'm saying I can't take these performative fluff statements seriously.
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"
I don't understand why this is problematic for some:
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.
The one time I ever paid for access to a creator on there, within the first month I got banned for being a bot (I'm not) and their customer service wouldn't help me. So my money was essentially stolen. Maybe all of these companies maximizing their automation so they can minimize headcount isn't a good thing for world.
How could Chapo do this? /s
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