It’s kind of weird to see people want to work at big corporations but then act surprised or salty about layoffs.
It’s nothing personal. You’re a line number even if you’re some leet coder. It’s a business, and it’s a strategy game of utilizing resources. You might have 400k TC but you’re not god you’re a resource.
If you think these things aren’t fair or suck, then you should try to move out of the leet coder path and get on the capital owner or business operator side.
Sorry but it’s kind of annoying to see people making 200k plus not get this.
"If you think these things aren’t fair or suck, then you should try to move out of the leet coder path and get on the capital owner or business operator side."
Some people like engineering and don't want to have to do an entirely different career. I would love to be treated as a human as an engineer (which is why I'm trying to leave the big companies but it's hard to find a company much better)
Approaching your work as contracting (even if you are regular employee) helps to think about the job more rationally. You exchange x hours of time for y amount of money. Also helps to keep in mind to check you value in the job market.
There are positions where you can just stay put engineering all day but entails being an irreplaceable resource to your employer - so only few generally can get to this niche.
It's kind of weird to see big corporations want to attract talent but then act surprised or salty when people don't like being treated like a line item in a budget.
It's nothing personal. I'm sure your company is great and you truly believe in your mission beyond just providing value to shareholders but humans like stability and to be treated like people. You might be a Fortune 500 but you're not god just a job.
If you think these things aren't fair or suck, you should try treating people better or else deal with the organized labor that will make decisions for you.
Sorry, it's getting kind of annoying to see employers not getting this.
I used to have this attitude in my early 30s when I first made >500k. I thought I was indestructable, irreplacable and had an ego to match it. What a humbling experience it was to be laid off, in fact I think it was one of the best things to have happened to me. My relationship to work and business is much healthier now. I just smile at the silly games tech employers and their staff play.
I told the CISO he was an idiot who didn't understand security (in front of many peers), because we disagreed on implementation. Soon after I was fired for "violating company policy".
I realized being right is not the most important thing in the world, certainly not more important than being employed. The other lesson was to never involve myself in office politics again: it is irrelevant and ultimately lowers your standing in an organization.
> The other lesson was to never involve myself in office politics again
Yea I think the real lesson here is 1. treat people with respect even when you vehemently disagree and 2. You were really bad at office politics. The entire name of the game in politics is to piss off the least number of people possible.
A few years on, it's 650, so I actually did myself a favor getting fired, even though at the time I was filled with regret and resentment. In retrospect, the job was miserable and I was acting out because I was deeply unhappy.
> If you think these things aren’t fair or suck, then you should try to move out of the leet coder path and get on the capital owner or business operator side.
You could also try to improve society.
People don’t have to just take it, they can fight back. All power comes from the consent of the masses, none of these guys have the physical power to compel any of us to do anything at all, including let them live.
Look what is happening to Tesla in Scandinavia right now for an entirely different take on what people can do if they don’t think things are fair.
It's really funny to see hackers fall in line to work at big companies. In the 90s all the true hackers hated large established companies and would show them the finger and work for scrappy upstarts. And now all the kids are bending over backwards to work for these large corporations doing hours of leetcode. What a shame.
The hackers of the 90s and 00s are a different breed than those today. Today, many go through a boot camp and enjoy a cozy job. Might as well be an accountant or in HR.
The hackers of the early days were tinkerers. Odd ones out, often. They are still out there, but absolutely not taking the traditional path.
I think another problem today is that startups do not truly differentiate. They try to be a mini Google. Startups in the 90s were much more brash. Look at Apple's ads against IBM for example. Everything has become far more tame these days. So why join a mini Google when you can join the real Google instead.
In addition to this, there's been a lot of people flooding to tech because the financial incentives are so high and the cost of entry isn't overwhelming. A lot of people want to cash out -- which isn't a crime -- but it's result in a cultural change that's diluted the share of incorrigible hackers.
It's almost as if when kids grow up and have kids of their own, and have bills to pay, they hold their nose and do things they don't really want to do. of course, some of us never grow up and live in hippie communes and eschew the trappings of things like money.
Additionally, HR (Human Resources) reports to the CFO in most companies.
All you have to do is look at the org chart to understand that HR is a function within finance, and everything within finance is about numbers, resources (including human resources).
HR and Finance people think about data and make decisions in spreadsheets. No emotion. They also realize they'll be rewarded (via stock market, or investors) by doing things that are best for their business (according to their spreadsheets..), even if it might create a temporary PR issue or temporary morale issue.
> If you think these things aren’t fair or suck, then you should try to move out of the leet coder path and get on the capital owner or business operator side.
Spotify is a for-profit enterprise and if laying people off is the right financial choice then he's doing his job well. He can sell his shares when he feels like it.
If you agree with the narrative of shareholder primacy and are looking at short term outcomes then sure, nothing is wrong here. But this means that we're ignoring the harm that was done to the people that lost their income and the disruptions that the rest of the org will experience.
Layoffs can be devastating to the people that were terminated; a job loss is one of the higher stress events one can experience. If you take into account the larger impact than "shareholder value" then dumping stock to capture value is an abdication of responsibility on the CEO for over -hiring, and has terrible optics of financial gain right when a number of employees took it on the chin.
> But this means that we're ignoring the harm that was done to the people that lost their income and the disruptions that the rest of the org will experience.
As opposed to the 'benefit' that was done while they were granted income?
I'm unsure what your point is. Is a business never supposed to 'harm' its employees? They're never allowed to fire people? What is the logical conclusion of your statement? A business ought to be liable to keep their employees employed forever even if it means the business becomes unprofitable and eventually has to declare bankruptcy, resulting in the firing of all employees? Who prevents the harm then? Or is this where the magical thinking that government will make it all better using the taxes from the other companies and employees that have yet to go bankrupt despite being unable to fire anyone ever?
It should actually be very very expensive for a company to fire people. Why do stock markets have an automated forced "PAUSE" when stocks seem like they are crashing? It's because companies, investors, people, or even computers don't always act rationally. That pause has prevented a lot of hiccups from turning into full-blown crashes.
Right now, when a company lays people off, the town, state, and federal government are the ones who have to end up picking up the downstream effects of that in the macro sense. And local businesses, families, loved ones have to pick them up in the micro sense. This trade doesn't actually make sense if you think about it, a company _should not_ be able to cause that level of a disruption, without a penalty to itself.
This is why I actually don't mind some specifics of European companies, where firing people is _genuinely really hard_. This also means that when hiring, you simply have to plan better. It is okay to expect a large company to "plan better" than an individual with a single income stream. It is okay to push the burden of the pain of bad markets onto companies, rather than individuals.
The employment laws in many Asian countries make it very difficult to lay people off or fire them. This sounds great on paper, but comes its own host of problems.
One knock on effect is that the job market for anyone that isn't a new grad is tough and extremely hostile. Having been laid off or fired carries such a stigma because it is a rare thing that most people don't encounter. If you're past your 30s and laid off? Good luck landing a new gig anywhere near the level you were at before. This can devastate many families in ways unimaginable to many Americans.
Another secondary effect is that workplace politics become dominant. Many incompetent workers that should've been fired long time ago are allowed to linger on, gaining seniority and accumulating more power. This translates into a workplace where your value isn't tied to the work you output, but which "line" you stand behind.
> when a company lays people off, the town, state, and federal government are the ones who have to end up picking up the downstream effects
If the existing unemployment _insurance_ (forced payroll contributions to each State) are not sufficient, then change that insurance system.
There could be a business opportunity for supplemental market-priced contributions which pay on job loss. That wouldn't be worse than the 'legal assist' ripoff plans HR pimps at employee hiring.
Unemployment insurance can't, and shouldn't be designed around market acting irrationally. That's not a reasonable insurance plan.
> then change that insurance system.
Also, more about this, why? We have a ton of levers and controls we can utilize here. Why does it need to be that the insurance system needs to change? That seems like we're closing off a lot of levers _just because_
Forced unemployment insurance is a supposed safety net, so should be open to discussion as part of solution. Let me opt out, or take premiums to a non-State provider.
In Germany, if you lay off many people you might need to inform the unemployment office beforehand. There are thresholds based on both the amount of people laid off and the size of the company.
This is not exactly a circuit breaker, but combined with other employment law this means laying off many people is quite a lot harder and takes longer.
The argument that businesses should never 'harm' their employees by laying them off is a straw man. No one is suggesting that companies be legally bound to keep all employees indefinitely. However, there is a vast difference between making strategic adjustments and engaging in practices that unduly harm employees for the sake of short-term financial gains.
Moreover, the U.S. government provides ample protections for companies, allowing them to restructure, refinance, or ironically even declare bankruptcy (a process I don't think you understand based on your comment) in an orderly manner to either save the business or ensure that creditors and employees are treated as fairly as possible in the event of a closure.
The implication that government intervention is 'magical thinking' is a misrepresentation. Government policies are not about preventing all harm but about providing a safety net that cushions the blow for individuals while allowing the economy to remain flexible and resilient. This dual approach helps maintain a stable economic environment where businesses can make tough decisions without causing undue distress to employees. I think it's a very easy argument to make that the lack of regulation in the realm of employment has made our economy quite unstable so that a small number of people can extract more wealth.
The logical extension of the argument for employee protection is not to make businesses unviable but to ensure that the economic system is equitable and that the inevitable pains of market fluctuations are not borne disproportionately by the workforce. Capitalism, supported by thoughtful government regulation, provides a framework where both businesses and employees have rights and protections, allowing for a balanced and fair economic landscape.
> The argument that businesses should never 'harm' their employees by laying them off is a straw man. No one is suggesting that companies be legally bound to keep all employees indefinitely.
I believe it was implied in the comment I replied to. The focus on 'harm' would imply that they believe any harm should be minimized if not eliminated outright.
> However, there is a vast difference between making strategic adjustments and engaging in practices that unduly harm employees for the sake of short-term financial gains.
What evidence do you have to make this claim in the context of Spotify? Are you suggesting that because the CFO sold his stock, therefore the layoffs only occurred specifically with short-term financial gains in mind?
> bankruptcy (a process I don't think you understand based on your comment)
We both know what I'm talking about, details of exactly how bankruptcy affects employees, creditors, and shareholders are unimportant. I'll stop reading your comment here, given you wanted to use the old "you're doing a straw man" and then pull this out.
The OC's perspective (that's me) is that there's a massive power asymmetry between the employed and employer. An employee can (typically) only work for one company at a time whereas an employer typically has many employees. The cost for an employee being terminated represents an immediate financial hazard for the employee; when an employee quits then the employer can absorb that shock more easily by distributing outstanding work between remaining employees.
When an employee quits for a new job, that's a speed bump for the employer; when the employer lays someone off, that's life changing for the employee. Employees have many fewer protections than do corporations so layoffs should be done with caution and the cost of layoffs should absolutely be shared with leadership.
> In reality, being laid off is a return to stasis.
Not even close, my dude. Being laid off starts a timer for when that person's finances run out. If that person is, let's say, badly burned out from a months-long crunch period then good luck getting a job. Being laid off is deeply disruptive; if you don't believe me then try it out for yourself sometime.
And going back to the original discussion of the CEO getting a payout as a result of layoffs, that represents leadership financially benefiting at the expensive of the laid off employees. Layoffs indicate a failure of leadership to grow and plan accordingly and leadership should be sharing in the pain rather than cashing in.
Productive, healthy societies survive and thrive when members of that society can afford to take risks can tolerate shocks, and aren't destroyed when they're unable to work. Systems like social security allow elderly people to retire which frees up other productive workers to have careers rather than be caretakers. Systems like unemployment benefits give people time to reorient after a layoff and search for a career where they can be more productive rather than having to reach for the first job that they can find.
These systems are paid for by redistributing income, either temporally with things like employment taxes, or along the income spectrum via progressive taxes. The case of a CEO financially benefiting from layoffs is the exact opposite of this pattern - extracting stock gains from the financial deprivation of employees.
I'm not arguing that we should redistribute all income and it shouldn't be possible to get rich, but I am arguing that we should, shall we say, have a little fucking empathy for people that have been disadvantaged and attempt to support them rather than celebrating the active progression of income inequality.
> If you agree with the narrative of shareholder primacy
I've really begun to notice that there is a large group of people who see this not as a narrative but as objective and external reality. I see it often on this topic, that capitalism (definitional arguments noted) is not just inherently good - it is in fact inherent. However it seems to increasingly apply to many people's perspectives on social and societal concepts.
I love me some internet...have since I was a kid...but one externality of being able to find and interact with people who think similarly to you is increased coalescence around different realities as realities rather than narratives or perspectives.
I agree that many people perceive this as an absolute truth, and I have to reluctantly acknowledge Milton Friedman's success in completely changing the narrative around corporate responsibilities. I don't think that the adoption of this narrative is due to the Internet though; the original Supreme Court decision of Dodge v. Ford legally enshrined it and the narrative has been actively taught for a long time. I know that I took it at face value for a long time as a result of my education along with the overwhelming share of my peers so I'd say this has been pushed by a broad segment of society.
At present we do rely on shareholders in different parts of society to fund new ventures -- most of us are here on HN because we worked at a VC-funded startup. Shareholders should get paid out. But workers have a stake in a company, the community has a stake in a company, and society at large has some small stake in a company. We shouldn't select shareholders as the main voting party in the operations of a company when the impacts of company operations are so much wider.
For good examples of companies whose impact was much larger than the shareholders, see also: DuPont/Chemours with PFAS, the manufacturers of CFCs, oil companies, etc.
> I don't think that the adoption of this narrative is due to the Internet though;
Clarifying…I meant the narratives in general, not this particular one. When your information sphere becomes narrowed, whatever narratives are within it tend to be reinforced and over time become inseparable from reality. Left and right, Russian and American, etc. it doesn’t matter it happens.
You are correct, but the sphere is larger than it ever was today, and the effect was much more pronounced in the past. There was a time when a full 15% of the American population was regularly watching Walter Cronkite each night. A lot of the counter culture movement of the 1970s was a reaction against this prescribed capitalist reality that the vast majority of the population bought into.
Its the C-suite management that makes all the decisions and reaps all the rewards, but when they make mistakes, they don't fire themselves, they fire employees, many who had no control of the strategic mis-steps of their leadership.
I'm not sure Spotify has really made any mistakes here though. They took a risk that didn't pan out. For an omnipotent being that would be a mistake, but for a person that only has the information available at the time it can still have been the right bet.
Firing people when their bets don't pan out just leads to a risk averse culture that dooms any company to failure
Taking a risk that doesn't pan out can also be a bad idea, though. It depends on what the possible outcomes were and what the chances of each outcome were.
The important thing to evaluating someone's decision making ability is to look at the decision they made with the information they had. Was it a good bet to dramatically overhire? I don't know!, but analysts can and should (rather, have no excuse not to). It's possible to determine what information the C-suite had access to and how risky they believed the decision to be. Did they play fast and loose with peoples' livelihoods for a tiny chance of unsustainable profit? Might be a bad decision.
It is board's job to evaluate C-suite's decisions. It is shareholders' job to appoint a proper board. Ultimately, the system has some flaws but generally it has worked pretty well over the past many decades.
I'm not talking about who is doing the evaluation. That's an obviously flawed process because the board has a stake in the company making unethical decisions for short term profit.
I'm just describing what good decision making actually is. If you take an option with 20% chance of success, but few downsides if it fails and large returns if it succeeds, that's usually a good decision. If, however, the downsides are catastrophic, that's probably a bad decision.
The situation here is that the downsides were arguably catastrophic, but completely externalized. The C-suite selfishly made bad decisions because it didn't affect them negatively. Doing so should reasonably have repercussions for them, but where's the incentive? An organization that places profit above all is intrinsically immoral and/or corrupt. This is obvious, we've just been allowing it for generations because we keep telling those who get hurt that things should probably work out on their own, eventually, or in the aggregate. And we convince people that an organization that places not being evil (not even martyring itself, just not doing horrible shit) just above profit can't exist. Would it be competitive? Maybe not, which is why regulation is actually useful - it can change the playing field so a company doesn't have to make that decision. (Of course, we already do this exact thing, but for extremely limited definitions of evil, and we also don't punish those evils very badly when they're committed.)
I agree, but the last time a major company tried to fire the C-Suite, the employees mutinied...
More seriously regarding this decision in particular- I think there is an interesting and not straight forward question about whether companies should hire and fire freely, allowing for high employment at times as well as layoffs and low employment at other times (as well as risk taking), or should they be more careful and therefore have less employment when money is flowing freely and fewer layoffs when money is tight? The answer seems to be somewhere on a continuum, but different folks find a different point optimal. It seems there are successful societies built on policies promoting different answers as well.
I can't default to faulting an individual for simply making a different decision than I might have preferred they make. I don't even know how much the Spotify CFO was involved in making these decisions in this case, maybe a lot, maybe a little, maybe they were against it but were over-ruled.
* This is a classic highlight of company leadership focused on quarterly results. The stock has a good quarter, the CFO is now much richer.
* At a base level this is one person profiting off misfortune he caused other people. This isn't the pro-social type of behavior I would want to be encouraged.
* Companies primary focus is on satisfying Wall Street, while avoiding too much scrutiny from DC.
All business is profiting off misfortune of other people. That is the cornerstore of post-industrial capitalism: maximize the externalization of the costs of production. Name one product, service or industry which does not harm people, animals or the environment - impossible!
Growing food and bringing it to you is one example of millions. And no it doesn’t “harm the environment” to dig a potato out of the ground every year or whatever.
Growing food absolutely harms the environment. Maybe not one potato, but modern agriculture is a leading cause of climate change (mostly animal ag, but the point remains).
This is not nihilism. This is what capitalism is by definition. Says Rob Urie:
> Economic production that produces toxic externalities like global warming, dead oceans, undrinkable water, unbreathable air, etc, depends on assigning little or no value to these. To make this very clear, Western economic ‘accounting’ places no value on these, on the most fundamental necessities of living beings, by design. As Oscar Wilde put it, a cynic is someone who knows the price of everything and the value of nothing. This is in fact a summation of Western economics; circumscription of the ‘knowable’ world by what has had a price tag put on it. The externalized costs of capitalist production are real— more real than the stuff in stores that is only ‘cheap’ because the true costs were lobbed off on people who haven’t yet fought back.
Sure there are things that you can do while growing food that do harm the environment, and certainly modern agriculture could be improved.
But since we’ve found an example inconsistent with your blanket statement (which starts with “all”) it is now disproven.
There’s a lot of other examples besides one potato.
And let’s not even talk about the ludicrous idea that any change to the environment equals harm. By that definition all living things harm the environment.
There is no way to know what effect a layoff will have on stock price in advance. This sale would have happened in the exact same way if the stock had tanked after the layoff.
Sure. It's possible he decided he wanted to use a layoff as a way to make a gamble on the stock price before a scheduled sale.
However there is no actual evidence of this, so let's be careful about breaking out the pitchforks. This sale would have happened even if the stock tanked 50%.
It's not just Spotify layoffs that have caused stock pumps this year. Plenty of other large tech companies have experienced the same pump due to layoffs. It's a pretty good gamble.
The 10b5-1 schedule is referenced often by executives as an alibi against insider trading. Let's just be realistic that it likely doesn't prevent anything of the sort.
It is. At best. A gamble. There are more than enough examples of companies doing layoffs and experiencing stock losses.
Let’s be realistic that this trade was a) always going to happen no matter the stock price, b) the CEO does not have a crystal ball, and c) there is no evidence of the CEO timing layoffs as a ploy for personal gain.
It’s easy to get caught up in conspiracies that we want to be true.
Imagine if the timing were juuuust a little different, what the headlines would be. "Spotify CEO cashes in on millions before announcing layoffs". Hmmm.
It's weird to deny that executives can comprehend the impact of their decisions on the price of their ticker, but ok.
> It’s easy to get caught up in conspiracies that we want to be true.
I'm not saying there even needs to be a conspiracy for this specific case. I'm pointing out that there is nothing in the law that would stop them from taking advantage of this timing. Also that previous layoffs have resulted in a bump in share price multiple times in a row, and what do you know, it happened again. Even if it was a gamble, how can you deny that they're able to time information drops to their personal advantage? Isn't that a problem in itself?
>I haven't denied any such thing. I'm literally just saying it's a gamble.
Well, you said it was "at best a gamble". I don't know how else I'm supposed to interpret that besides you saying there was "at best" a 50/50 shot of either outcome happening from the perspective of the ones that announced it. I'm going to assume this is not what you meant.
Anyway, since it's established that we're in agreement (maybe? It's not easy to figure out your point of view) that executives are generally able to know with some degree of certainty >50% that their actions will create a specific effect on their stock price. And we also can agree that it is their decision when to announce and execute these actions. It's clearly and obviously a problem that they also are aware of when the stock that they hold in large quantities will be bought and sold.
> Is it a problem? It seems unsolvable if so, unless we should ban CEOs from receiving stock compensation?
If we can agree on the previous bit, then I have no idea why we should throw up our hands and be like "well I guess this is an impossible problem to solve". It's really not. Just be more restrictive with the windows in which executives are allowed to sell. Better yet spread their entire buy/sell order over the course of the year. Or even better still, don't allow them to sell stock AT ALL until they are not in charge or aware of high level decisions at the company.
CEO pay is on average 399x their average employee(https://www.epi.org/publication/ceo-pay-in-2021/). Then, we also allow them to pump their portfolio on a whim at the expense of their employees. I would say personally I don't really care if their compensation suffers, since they've probably already 10x'd my lifetime earnings in their last year of work, and I'd happily switch places with them financially if they're so hard done by.
> Just be more restrictive with the windows in which executives are allowed to sell.
I feel like I'm on crazy pills.
Executives. Do. Not. Have. Windows. To. Sell. I don't know how many times I have to repeat this.
They have exact dates with exact numbers of shares on which sales will execute with exactly zero input from them. It's literally the most restrictive thing you can imagine, short of not allowing them to engage in stock sales at all.
Here is what you seem to think happened: Daniel Ek fired a bunch of people during an open trading window, saw that the stock price went up, and sold a bunch of shares.
Here is what actually happened: Daniel Ek put together a schedule of specific stock sales at the beginning of 2023 that executed automatically on his behalf throughout the year. At some point during the year, he decided to fire a bunch of people.
> Better yet spread their entire buy/sell order over the course of the year.
They do. It's on a schedule. Over the course of the year.
> Or even better still, don't allow them to sell stock AT ALL until they are not in charge or aware of high level decisions at the company.
This is effectively banning equity pay for executives. Unless you think we should make C level executives somehow not in charge of high level decisions.
> CEO pay is on average 399x their average employee
> Here is what you seem to think happened: Daniel Ek fired a bunch of people during an open trading window, saw that the stock price went up, and sold a bunch of shares.
Nope.
> Executives. Do. Not. Have. Windows. To. Sell. I don't know how many times I have to repeat this.
You can stop whenever? Obviously I know this. Windows are just further restrictions to add to the schedule. I'm certainly not an expert, but I dunno why the concept of combining restrictions is so hard to comprehend.
You're on your own for the rest of the misinterpretations though. I think those ones are easier if you think a little harder about it.
> I guess they can still conveniently schedule when the layoffs are announced and make it happen right before the 10b5-1 schedule?
This is still a gamble at best. Let's not go down a conspiracy rabbit hole here.
CEOs have their trading schedules set well in advance, they do not know how the market will respond to their actions ahead of time. They can at best make an educated guess.
But the idea that he scheduled this layoff specifically for personal gain is pretty unfounded.
I meant on a "moral" level, not legally speaking. If he's doing his job as a CFO and he wants to sell shares when people are laid off, that's up to him.
> and he wants to sell shares when people are laid off, that's up to him.
That's what I am saying...it's not up to him. It's up to him if he wants to lay people off right before he has a sale scheduled. But what he most definitely did not and cannot do is: lay people off, observe that the stock went up, decide to make a sale.
I thought that as a corporate officer he kind of can't sell his shares when he feels like it?
My layperson's understanding is that people like him have to decide in advance when they're going to sell shares and tell the SEC (by filing a 10b5-1 with a preset sales schedule and cooling-off period before sales start). I thought that the most control he would get is choosing to suspend the plan (i.e. keep shares instead of selling them on the pre-decided date).
Are there other ways he can sell his shares whenever he wants? Can he borrow using them as collateral whenever he likes, for example?
This is my understanding as well. It's also my understanding that it's not illegal to coordinate with other executives when you're selling throughout the year and then drop news that influences the price in a particular direction just before or after time of sale in order to ensure that you profit.
As I understand it, the law is that they're not allowed to trade while in possession of material, non-public information, but beyond that most of the practices are there to just entirely avoid the suspicion or appearance of foul play. Sometimes executives are allowed to trade during windows immediately after announcing results, etc. The law would still dictate that they do not trade if they know about upcoming acquisitions or changes, etc. but someone would still have to prove that, and it's a risk that is removed if the executive just follows a preset schedule.
As a legal matter, no, he can't really sell his shares when he feels like it. (Disclaimer: IANAL and this is not advice.) The Spotify insider trading policy [1] prohibits transactions during "blackout periods," which start with the last month of the fiscal quarter (so December 1, in this case) and end after earnings are released.
These share sales were presumably executed pursuant to a 10b5-1 plan, so he did something like set up a target price ahead of time at which he would sell. It just so happened that the plan was triggered when the stock surged on news of layoffs. I don't think the optics are great there! But it's at least sort of a coincidence.
Our society is inches away from extreme violence at all times and the relative peace and legitimacy of that society depends on securing broad consensus and consent of the governed and a reasonable distribution of resources. He can be killed and eaten for his protein content when someone feels like it too.
Well, as a member of society, my vote goes to the market over, you know, cannibalism. Pretty sure that vote isn’t hanging in the balance of the Spotify CFO.
On the one hand this is true. On the other hand, it's reasonable to expect extraordinary leadership from executives paid extraordinary amounts of money. Cashing in millions in stock options after layoffs is bad optics, and diminishes trust in company leadership, and employee loyalty. One might expect executives to put off cashing in shares for some time to avoid these optics, even if it cost them a small amount off the top.
Does it? Should Spotify keep employing people if it's not in their business interest?
It sucks if you're fired but they went to work for a publicly traded company that drove the income from streaming music to almost zero for musicians, not a charity.
Not necessarily, the article didn't say what percentage of his stock he sold. It's pretty normal risk management to diversify your portfolio and he could have just needed the cash. Interest rates are pretty high right now, maybe he wanted to pay off something instead of using his line of credit.
It's about being able to predict what happens in the future that matters, unless you're supposing that he would have bought immediately before the announcement and sold after.
Executives aren't able to time their sales of stock to events and they shouldn't be able to as it would lead to more manipulation. It is likely the sale of stock was planned ahead of the layoff announcement timing.
the only time this really makes sense (in my head at least) is selling prior to something that KNOW will tank you stock and make your shares worthless. If you just hold... sure you're making a decision to not sell, but other than looking VERY VERY bad to employees on the timing of things... the stock went up, he sold....
now if he sold a boatload of stock before a horrific earnings report... thats another story
Instead of speaking about his right to do this or not, I think this conversation should be about the rise in C-suite executive compensation and Jack Welch style business decisions.
For comparison, that's enough to have saved almost all of the jobs that were cut...
1500 lives were ruined so this guy could add some zeroes to his bank account.
(For all those commenting on 10b5 sales: note that the layoffs were timed to match the scheduled sales so that the executives could reap the windfall from the increased stock prices resulting from the layoffs. This has been a strategy for at least a decade now and is drawing increasing scrutiny because it's basically an endrun around insider trading rules.)
Just because he executed within a legal trading window doesn't mean he didn't make the decision to trade. It absolutely has everything with the stock going up right after the layoffs.
>He sold the stock after the material became public knowledge.
Are there rules about how long you need to wait after the news goes public to sell? Otherwise, it still seems kind of unfair because you could sell 100 milliseconds later before the market can react.
He traded on publicly available information, didn't he? Like, literally, what's the difference between him or you logging into a trading platform and issuing a sell on Tuesday morning?
You literally want to indict someone based on something they hypothetically could have done, not what they actually did? Good thing the courts doesn't work that way..
No. As far as I know, blackout periods are usually before a major announcement, except in cases like a change in leadership. In any case, blackout periods are defined and enforced by companies, they are not rules made by the SEC: the purpose is to avoid the appearance of impropriety. This is not insider trading either, since insider trading involves making trades based on non-public information, and this all happened after the information was made public.
Too early to tell. If the company is in far worse condition than the public realizes, than maybe. But this could just be rebalancing due to the increase in price.
They've reached market saturation, are not profitable, continually fail to find ways to become profitable, and yet they have a nearly $40 billion market cap. Any concept of valuation is meaningless these days.
The takes in this thread are incredibly poor. They’re poorly informed, they are often contradictory, they are frequently some weird antiwork spillover or something? Bizarre.
Basically, if you are interested in actually understanding this, don’t look to the top comments here. Wow.
Maybe the CFO can take one for the team, just once. Maybe cut their own pay to keep a few employees around instead of laying them off. Just a little selflessness, as a treat.
"the nature of a CFO" makes it sounds like some kind of mystical force. It's not! it's just humans making decisions. They can choose to be greedy or not.
The distinction here is the nature of a CFO as an individual vs a CFO as a role. It's true that individuals ultimately have control over whether to be greedy or not, but if individuals who are averse to greed aren't encouraged or allowed to become CFOs, then the CFO as a role loses the ability to make that choice.
If he had the power to raise the price on-demand, he'd do so all of the time since he owns stock and might even have performance bonuses tied to stock price. I highly doubt layoffs are execs sitting in a room scheming to make money but more likely they are trying to keep the company alive.
> If he had the power to raise the price on-demand, he'd do so all of the time
I can also light my couch on fire to warm the living room but that doesn't mean I should. Short term jumps are fairly predictable if you're calling the shots. Doesn't mean that you can do them indefinitely or without cost.
The rise in price really just means that people think they can cash out even higher. If it was already overvalued, it would still jump because people expect stocks to pump during layoffs.
We should stop acting like this reflects a large increase in the inherent value of Spotify, it's just another speculative market. Tech is particularly bad for this.
Could you please stop posting unsubstantive comments and flamebait? You've unfortunately been doing it repeatedly. It's not what this site is for, and destroys what it is for.
We've had to ask you this multiple times in the past, and I don't want to have to ban you, so if you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and sticking to the rules when posting here, we'd appreciate it.
You say all this as though we didn't get to capitalism by iterating. What, are we supposed to stop iterating now because we're more comfortable than we were before?
Iterating means refining what works, which means we have to take a step back and recognize the successes of capitalism over the past couple of centuries.
Only then can we intelligently try to address any failures in a non-destructive way.
You say "Only then", but in the US these failures already were being addressed (see: New Deal) until they were pulled back in the 80s. I think people are rightly frustrated by this.
You can't attack another user like this on HN, no matter how wrong they are or you feel they are. We have to ban accounts that post like this, so please don't do it again.
Edit: could you please stop posting flamewar comments generally? We've had to ask you this repeatedly over the years, and your account is still doing it - e.g. https://news.ycombinator.com/item?id=38529405 and https://news.ycombinator.com/item?id=38528691. I don't want to ban you, but if you keep posting like this, we won't have much choice—so if you'd please stop, that would be good.
I think it's reasonable for people to be frustrated that laying people off (lost value/income/security for many) consistently translates into big payoffs (more money) for fewer others (CEOs, shareholders). It feels like a moral inversion.
Of course it’s reasonable - they wouldn’t play on your emotions and outrage otherwise.
That isn’t newsworthy. And this isn’t the place to vent about a “moral inversion.” Make a new forum where you have 2 minutes of hate every day and eventually you’ll realize how programmed you are to be frustrated at things you have no power over and how much of a rage-cycle the so called “news” industry have put you in.
Sure, lots of people saying it's totally legal and "capitalism gonna capital", which is fair.
Except imagine the absolute kicking morale will take as a result of this. I'm sure it was bad enough, internally, when 17% of staff were made redundant. (I'm sure their internal channels are pretty salty and uncomfortable right now.) I'm sure there was plenty of anger internally at the C-levels. PR school would tell them to keep quiet and wait for the storm to pass; _not_ look to be publicly, personally, profiting from it to the tune of many millions of dollars.
Poor morale leads to greater attrition of those your company needs to hold on to, especially at an inflection point such as this. It leads to it being harder to hire in the future (and more expensive.)
It's up to the CFO to decide if that's worth it. It may be in the short-term; but long-term it's a much tricker equation.
To pay their bills. Such is the system that small businesses cant survive, and people are forced to work in large enterprises funded by massive amounts of venture funds. Without competition said enterprises can do whatever to employees. Those elected to ensure balance are rewarded well for their ignorance.
A bit like in communism where people could only work in large enterprises while small business owners have been wiped out.
Instead we should have hundreds of Spotify alternatives each focused on varying genres. Competition would solve not just working conditions but also artist pay and end user pricing.
It’s nothing personal. You’re a line number even if you’re some leet coder. It’s a business, and it’s a strategy game of utilizing resources. You might have 400k TC but you’re not god you’re a resource.
If you think these things aren’t fair or suck, then you should try to move out of the leet coder path and get on the capital owner or business operator side.
Sorry but it’s kind of annoying to see people making 200k plus not get this.