Submitted 10 months ago by L4s@lemmy.world [bot] to technology@lemmy.world
https://techcrunch.com/2024/01/11/discord-lays-off-170-people-blames-growing-too-quickly/
Discord lays off 170 people, blames growing too quickly | TechCrunch::Discord has become a mainstay for many online communities in recent years, but its relative success hasn’t shielded the platform from the financial woes Discord is laying off 17% of staff, or 170 people.
Since they were overstaffed that means the executive team messed up. I am sure they will be held accountable….
They didn’t mess up. The government interest rates were 0% when they borrowed money to increase their workforce from a couple hundred to a thousand people. The interest rate has risen to 5.5% - an interest rate hike that hasn’t been seen since the “stagflation” crisis fifty years ago.
It’s unfortunately for the 170 people being fired, but what’s the alternative? Keep going until they’re bankrupt and then all 1000 people are out of a job?
No, they messed up. Regardless of user count, and economic context, there is a limit to how fast you can grow a company. Going beyond that limit means that you’re diluting internal company knowledge so much that everyone just ends up doing their own thing— it’s chaos. Quality control, standards, procedures, etc go out the window. You also loose your ability to create accurate, data-backed plans with a high degree of confidence the farther you get from where you are now. You can predict the impact of a few new hires pretty easily, but hundreds, when your current team is only a couple hundred? You simply can’t forecast what holes you are creating, and challenges you will encounter with that many new people (specifically, that high of a growth percentage) in that short a time period. Growing that fast is incredibly risky, and in almost all cases, a terrible business decision. I’ve worked for SEVERAL companies that have worked this way, and it always destroys the company from the inside out.
Cool blame the government for the decisions of the executive team…
They weren’t FORCED to hire like crazy, they did it because they got greedy, thought the money train would never stop and got caught with their pants down. Many companies stayed within normal growth estimates and many didn’t.
Executive teams should be expected to predict these things accurately or be held accountable. But they won’t. They will cut staff and will happily pretend they did everything they could cash the checks and do the Bronze Medal meme Celebration as they MBA the fuck out of a company until it is dead and do the same to the next one.
I dint think Discord will ever be profitable. But there is extreme value in communication. The need for profit destroying good things once again.
How the fuck does a chat program justify a workforce of one thousand employees in the first place?! How do they expect to ever get in the green when they’re spending that much money on staff?
Is their entire business model to just endlessly pull in V.C. money and “grow” until they can’t get investors on board anymore? Actually, don’t answer that one, I assume that’s how almost every tech company works these days, and at some point it’s all going to crash.
I swear this is the nerds fault. We showed the Kubernets “Hey look, if we need more we can make more. If we need less we can just turn off the ones we don’t need automatic” and some manager is like “I can do that”
Etterra@lemmy.world 10 months ago
So basically… they’re doing so well that they have to fire people. Cool story Discord. Out of curiosity how much are your Executives getting paid?
LufyCZ@lemmy.world 10 months ago
If you read at least the summary from the bot, you’d see that discord isn’t and never was profitable.
I wouldn’t call that “doing too well to fire people”, just means they fucked up and hired more people than they could financially/operationally afford
Donut@leminal.space 10 months ago
You can read the internal memo here. They increased their workforce by 400% in 3 years so it was bound to happen.
The severance package is 5 months of pay plus a week for every year they worked there, and a slew of other things to help the transition to a new job.
RootBeerGuy@discuss.tchncs.de 10 months ago
Aw damn, not growing fast enough… better fire some people.
SkaveRat@discuss.tchncs.de 10 months ago
growing too quick in the number of employees, not users/revenue.