11 ms·

Why even bother with such a small layoff? Is there a reason to not just dial up your attrition for a while?

by bigyikes 3mo ago

trgn 3mo ago
i dont understand this either. just dont hire for half a year or so, a generic globocorp gets to that 7% easily.
- Avicebron 3mo ago
  That doesn't boost the stock after the announcements, why would they do it?
  - trgn 3mo ago
    i dont think this announcement will boost the stock either, for the same reason we are wondering here why 7% is noteworthy for a globocorp.
- mh- 3mo ago
  One challenge is that when the market stops hiring as aggressively, voluntary attrition retracts as well. Large companies model attrition in their financials, and those assumptions start to break when macro conditions around the job market shift like that.
film42 3mo ago
I've seen companies put a percentage of the team on a PIP as a "this is not a layoff but we do need to cut costs" situation. Hopefully Elastic is just being honest about it?
Legend2440 3mo ago
Your best employees are the most likely to leave via attrition, because they have the most opportunity elsewhere. In theory, a small layoff can target the least productive employees.
- georgemcbay 3mo ago
  > Your best employees are the most likely to leave via attrition, because they have the most opportunity elsewhere. But this remains true after a layoff and the layoff often acts a motivator for your best employees to start looking even if they weren't previously. Usually they aren't thinking "well, glad I survived that layoff and now my job is safe forever", they are thinking "huh, is this a sinking ship? Maybe I should look around and see what else is out there..." ...speaking as someone that has been at several companies during layoffs...
  - rconti 3mo ago
    yeah, it seems like it would have to be accompanied by a pay bump for the ones you really want to retain... which is challenging from an optics perspective.
    - wrs 3mo ago
      Perhaps, but there are optics only when someone sees. It's not unusual to fund retention increases using some of the budget freed up by a layoff, but that won't be explicitly stated in a public announcement.
SpyCoder77 3mo ago
In human terms, this is not a small layoff. Around 281 people's lives are being shaken up by this.
r-w 3mo ago
I think that might be even worse for the mental health of the folks on the ground.
- tonyedgecombe 3mo ago
  The anticipation is worse than the event itself.
jollyllama 3mo ago
7%? Small? 10 years ago, 5% was significant, and that was in a fairly mature sector. Granted, in that context, you'd be laying off 5% every two-ish years until industry trends changed direction.

Why even bother with such a small layoff? Is there a reason to not just dial up your attrition for a while?

trgn 3mo ago

i dont understand this either. just dont hire for half a year or so, a generic globocorp gets to that 7% easily.

Avicebron 3mo ago
That doesn't boost the stock after the announcements, why would they do it?
- trgn 3mo ago
  i dont think this announcement will boost the stock either, for the same reason we are wondering here why 7% is noteworthy for a globocorp.
mh- 3mo ago
One challenge is that when the market stops hiring as aggressively, voluntary attrition retracts as well. Large companies model attrition in their financials, and those assumptions start to break when macro conditions around the job market shift like that.

film42 3mo ago

I've seen companies put a percentage of the team on a PIP as a "this is not a layoff but we do need to cut costs" situation. Hopefully Elastic is just being honest about it?

Legend2440 3mo ago

Your best employees are the most likely to leave via attrition, because they have the most opportunity elsewhere. In theory, a small layoff can target the least productive employees.

georgemcbay 3mo ago
> Your best employees are the most likely to leave via attrition, because they have the most opportunity elsewhere. But this remains true after a layoff and the layoff often acts a motivator for your best employees to start looking even if they weren't previously. Usually they aren't thinking "well, glad I survived that layoff and now my job is safe forever", they are thinking "huh, is this a sinking ship? Maybe I should look around and see what else is out there..." ...speaking as someone that has been at several companies during layoffs...
- rconti 3mo ago
  yeah, it seems like it would have to be accompanied by a pay bump for the ones you really want to retain... which is challenging from an optics perspective.
  - wrs 3mo ago
    Perhaps, but there are optics only when someone sees. It's not unusual to fund retention increases using some of the budget freed up by a layoff, but that won't be explicitly stated in a public announcement.

SpyCoder77 3mo ago

In human terms, this is not a small layoff. Around 281 people's lives are being shaken up by this.

r-w 3mo ago

I think that might be even worse for the mental health of the folks on the ground.

tonyedgecombe 3mo ago
The anticipation is worse than the event itself.

jollyllama 3mo ago

7%? Small? 10 years ago, 5% was significant, and that was in a fairly mature sector. Granted, in that context, you'd be laying off 5% every two-ish years until industry trends changed direction.