[–] 7e link

The launch market is very small and it's always taken longer to build a satellite than to provision the launch vehicle.

These layoffs are a direct result of SpaceX's recent failures to raise money.

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[–] TaylorAlexander link

The key I think is that the launch rate has increased, but the market has a years long delay due to build times. The result is that the existing supply of launchable satellites has been consumed, so fewer launches are available to pay the bills.

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[–] icpmacdo link

Can you link to the failure to raise money? I thought they just secured 500 million.

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[–] azernik link

$500M was the size of the offering; as of 3 January, they had only managed to raise $273M

https://www.sec.gov/Archives/edgar/data/1181412/000118141219...

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[–] aey link

They should open it to the public with a reg d/s. I would love to be able to invest into SpaceX.

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[–] garmaine link

That would endanger the long term plan of Martian colonization, which is not the most financially responsible thing to do. Elon is keeping SpaceX private so as to have some control over who invests, to make sure they’re onboard.

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[–] aey link

Reg d or s is still private. But there are limits to number of investors.

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[–] gaius link

it's a great opportunity to get rid of underperforming employees and restructure the company.

Positions are made redundant, not people. Individual performance is irrelevant, if not the company needs to be taken to the cleaners at a tribunal.

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[–] MarcysVonEylau link

It all makes sense when you look at basic facts.

Rocket reuse became a normal occurance, probably earlier than the majority of the industry anticipated. Their competitive pricing took the market by storm, changing the equation of sending anything to space. There are less new payloads to launch in 2019, because it takes much longer to contract and build a satellite than to send it to space, and the market hasn't yet adapted to this new mechanic.

Their need for manufacturing new boosters scaled down greatly because of reusability. You cannot reasign all engineers to other projects, some must go.

On top of that SpaceX is moving to new risky projects like the Starship, and they need to cut any fat that poses risk to their long term plans.

Lastly, as few pointed out, it's a great opportunity to get rid of underperforming employees and restructure the company.

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[–] HeadsUpHigh link

SpaceX switched from carbon fiber construction for their next rocket to stainless steel. My guess is at least a big part of this workforce reduction relates to people involved in cf which are no longer needed. Additionally they had a lot of people working on crew dragon which as it now nears it's launch might not be needed any more( e.g. pica heatshield, electronics, software developers etc). Same goes for the now mature f9( block 5 was supposed to be the last iteration but there might have been some small improvements. Furthermore with the speed up on the Starship timeline the potential need for an elongated 2nd stage is reduced). So it makes sense for these divisions to move people to the new projects and at least some of them end up getting fired, either due to expertise or performance or whatever.

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[–] kurthr link

I just don't buy the Carbon Fiber vs Stainless construction. They aren't used for the same thing (low weight structural stiffness vs heat conduction, radiation & appearance).

From what I understand it was a water tank contactor that did the hopper in Boca Chica... and it will never face lanch/re-entry stresses. That won't replace anyone.

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[–] HeadsUpHigh link

The starhopper( test article) is indeed made by a water tank contactor. The actual starship will be made by stainless steel in LA as confirmed by Musk on twitter. Also he mentioned something about stainless steel having better properties than cf.

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[–] theptip link

> They aren't used for the same thing

The old BFR design had a large carbon-fiber hull, the new one has a stainless steel hull. Unless I'm missing your point, that's a major piece of the rocket that's no longer made with carbon fiber. (The giant molds that they were building for the BFR hull, for example, are now redundant.)

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[–] kurthr link

It's not for production, it's for testing and looking cool.

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[–] caconym_ link

From what I understand, the plan is for the production Starship to have a stainless steel skin. I'm sure it will be a much more refined construction than the hopper, but skinned in stainless steel nonetheless.

See https://en.wikipedia.org/wiki/BFR_(rocket)#Second_stage_and_...

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[–] theptip link

Wat. Sources please to back up this wild assertion?

The stainless steel hull is a viable design (though obviously given how many times it has changed it might not be final).

Scott Manley did a deep dive: https://www.youtube.com/watch?v=XVgEKBwE2RM

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[–] solotronics link

How will they inspect and test all the welds required... I am still shocked that the BFR is not carbon fiber.

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[–] HeadsUpHigh link

How do you inspect small creaks in a cf build? If I had to guess inspecting welds is probably easier.

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[–] kurthr link

It's just a hopper to test new methanol engines... it will never see flight.

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[–] Robotbeat link

SpaceX has like 7000 employees, about twice as many as ULA (their domestic competitor). There are reasons why (Dragon, BFR, Starlink, in-house engines, higher flightrate, more in-house everything), but that's a lot of people.

What I hope is we'll see new startups form out of these folk. What I'd like to see is an ESOP/co-op newspace company bent on similar goals. A lot of these employees have vested stock (or likely will vest soon) that might help capitalize such an effort.

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[–] roedog link

Well, Space X costs less than half than a ULA launch. I suspect that ULA spends that additional money on large sub-contracts to Boeing and Lockheed for the Delta and Atlas vehicles. This makes me think that when we add up the employees on the subcontracts the space X staffing number will be much more impressive in it's leanness.

I hope they all join my company, we've got a lot of work they would find interesting. With the retirement rate increasing it's the time to change things for the better. I want their experience at Space X on how to do things faster and better. But perhaps that's wishful thinking...

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[–] syncmaster913n link

Launch price does not necessarily tell us anything because we do not know what profit margins SpaceX has.

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[–] roedog link

hmm. So they could be losing money on each launch? But, why would they would they choose to sell at a loss when they could beat the competition at twice the price?

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[–] Traster link

I don't beleive this, but it's possible that SpaceX are selling launches at below cost to drive demand so that they can get up to a scale where they're economical and in order to establish a dynamic in the industry where known low cost launches enable new projects that will cause higher demand in the future.

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[–] spaceandshit link

Which company?

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[–] Drdrdrq link

Probably Northrop Grumman [0]?

[0] https://news.ycombinator.com/item?id=14689610

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[–] consumer451 link

> What's odd is why SpaceX is cutting staff with the new development underway on the larger rockets and the satellite business. I'm curious about how they're going to increase development while cutting staff.

The oddness diminishes when you look at their open jobs listing [1], as it looks that they have >300 open positions.

[1] https://www.spacex.com/careers/list

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[–] ricardobeat link

At <5% of the employee count, those hires might barely cover churn.

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[–] consumer451 link

That’s a really good point.

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[–] roedog link

Yep, attrition was over twice that last year at some firms in the area. Partly demographics, lots of folks who can retire do. The rest due to competition for staff.

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[–] undefined link
[deleted]

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[–] kemitchell link

> I've reached out to my former colleagues who left to join Space X.

Good on ya.

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[–] teleclimber link

> What's odd is why SpaceX is cutting staff with the new development underway on the larger rockets and the satellite business.

You're missing that they finished up falcon heavy development last spring, falcon 9 block 5 a little later, and crew dragon is finishing up now. That's a lot of development manpower freed up. To much for starship probably, and I don't know if many of the launcher skills are applicable to satellites.

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[–] erikb link

Well, naturally every company has talent drain. The rockstars will not work long in one company and jump from one gig to the next. But if you have bad luck and hired some slackers, which will happen with the tightest of hiring schemes, then they will certainly stick around.

Thus over time you still have to re-hire people you really need, but get a bigger and bigger amount of people who are just there for the social benefits.

So what can you do to achieve your ambitious goals? Reduce the workforce and try to find a cutting point where you get rid of mostly parasites while keeping your ambitious work bees around.

Usually at the same time of the cut, some of the work bees also get raises and promotions, because then there's some free budget. So if you are an ambitious work bee, then "cutting staff" is actually also good news.

Finding the right cutting point is really the important point and hardest part. For instance you don't want to lay off people who really are performers but for some reason or another (e.g. they just got a baby) they don't perform right now. So at least in the companies I could look inside until now the cutting point is usually well inside the slackers group, so that the people who would recover and then start performing again have a chance to continue.

In the end, even the most tyranical ass-hole leader wants to have as many people as possible work as hard as possible to achieve his goals for him, in exchange for an amount of money that in most cases is peanuts for him. And not all leaders are even tyranical ass-holes.

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[–] acdha link

You left out the part where managers are held accountable for failing to help their staff be productive. It’s easy to rant about slackers but in my experience they’re rare (and 100% protected by management) compared to people who are given conflicting or bad incentives or – by far the most common – work which appears simple only from a distance (e.g. how enterprise software developers can take 3 months to add a button because that involves 600 edits on 20 servers and a labyrinthine test plan).

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[–] erikb link

> in my experience [slackers are] rare (and 100% protected by management)

Can you give an example of how you see slackers being protected by management? I wonder if we have the same definition of the word slacker.

In my experience the people protected by management are not doing much in terms of daily work, but they work a lot to always stay on top when it comes to prestige and taking credit from other people's work. So from my perspective they are working hard, just not to improve the teams results. That's why I call them parasites. They suck out the value of the team for their own gain.

What I call a slacker instead tries to do nothing but reading facebook (or HN) all day. Most of the time these are people who have given up hope to improve their careers for one reason or another. In many cases it is connected to a parasite sucking too much out of them and them not being able to recover self-motivationally.

I bet at least before readign this post your understanding of slacker and my understanding of parasite would be similar, right?

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[–] acdha link

My thought was just that this doesn’t happen in a vacuum: their management should know that they’re not performing, irrespective of exactly how. I’ve seen some egregious examples (e.g. F500 online store which was down every morning from 5am to whenever the DBA rolled in, a dude who’d head to the bathroom at 9:30 with a coffee mug & the newspaper, someone who went out to lunch 10-3, regularly being VERY drunk, etc.), and in every case this was well known but there were reasons why nothing was done (members of the same frat, having an affair, being drinking buddies, too lazy to do the paperwork, being high enough in the management hierarchy that you’d have to explain not having acted before promoting then, etc.). So while I blame the person for taking a paycheck they weren’t earning, I attribute more blame to the people whose job it is to correct problems like that, especially since they’re paid more and given greater status and authority for [theoretically] improving the performance of the larger group.

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[–] AdrianB1 link

In many companies slackers are the norm, they cover each other and help them promote to cover even better. It happens a lot in non-technical companies where techies do the work, but the think layer of management and other positions are mainly paper-pushers and PowerPoint champions.

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[–] roedog link

The SoCal aerospace job market is hot right now. The driver is multiple large program starts at multiple contractors who are competing for people. This should make it possible for everyone to land on their feet. (I've reached out to my former colleagues who left to join Space X)

What's odd is why SpaceX is cutting staff with the new development underway on the larger rockets and the satellite business. I'm curious about how they're going to increase development while cutting staff. The big aero firms have room for improvement on productivity. But SpaceX has been lean from the start. I wonder how they'll get more out of an already highly productive team. That'd be something to learn from.

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[–] AdrianB1 link

It is normal to layoff about 5% per year, you trim the one in the 20 that is the weakest and it has positive, not negative effects. Going to 10% is a bit stretch, but still workable. In the last companies I worked, if up to 20% of the people left one day it would have an immediate positive impact on the performance, less complexity to deal with and more focus to work on real stuff.

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[–] ecshafer link

5% is insane, I would never work for a company that regularly laid off that many people. Firing under performers is one thing, but to systematically clear house is toxic. How are you supposed to build a career if one of your coworkers/friends is canned every year, so everyone is wondering what year is theirs? So people overwork themselves to make sure it doesn't happen to them. You need to show your employees safety, so one bad project doesn't ruin their lives.

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[–] mirsadm link

Personally I would be leaving any company that was laying off 5% of people immediately. That sends a signal that they are underperforming and it would destroy morale. Doing it every year is obscene.

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[–] cal5k link

I doubt you'd notice, since it would tend to happen throughout the year.

Anecdotally, sales times have MUCH higher attrition rates than this - if they don't they're probably retaining too many underperforming staff.

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[–] AdrianB1 link

5% is normal attrition in a company, depending on the specifics it can be even higher. The difference is between people that leave on their own (good or bad) and shaving the lowest 5% out. In this world most companies don't have very high standards, even mid-performers can be quite bad. If you are in any way competent, you'd never have any such problems.

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[–] rmdashrfstar link

I think it's less about building a career and more about accomplishing the goals of the CEO and the company.

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[–] riffraff link

Having a workforce that is unhappy and worried about their career and life is not a recipe to achieve goals sustainably, maybe.

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[–] __m link

I doubt the ceo will accomplish any goals without employees. if you want them to align with the company’s goals you have to help them achieve their goals, otherwise you might as well outsource the work.

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[–] screye link

Wasn't that a big reason for Microsoft under-performing in the Ballmer era ?

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[–] vkou link

> if up to 20% of the people left one day it would have an immediate positive impact on the performance, less complexity to deal with and more focus to work on real stuff.

Maybe in a fairy tale. In the real world, the 20% that were laid off are unlikely to be the 20% that should have been laid off.

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[–] njarboe link

Probably would depend on who was in the 20% who left. Having the people in the management structure select the correct people to fire is probably not that common. Especially in big, old companies where management has evolved over a long time to select for people who don't get fired instead of people who work well together and do a good job.

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[–] syntaxing link

To expand on this point, when you hear layoffs you probably immediately think about the engineers given the demographic of this site and how you wouldn't working for a company like this. However, layoffs have a tendency to hit sales and production harder than the technical team. Production and sales usually outnumber engineers to begin with and has a higher turnover rate due to the nature of the work.

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[–] HeavyStorm link

That's, of course, totally dependant on your line of business.

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[–] strangemonad link

This seems to be confusing attrition with layoffs.

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[–] syntaxing link

It's not unsual to layoff 10% of your workforce in hardware companies but it is unusual for a "growing" company. To put in perspective Pratt and Whitney laid off about 10-15% a couple years ago when they were in between the phasing out of the old engine and ramping up the new engine. Sometimes companies are unlucky because there is a drought where the demand for the new stuff is lower than the demand of old stuff but you have to phase it out to maintain product lifecycles for sustainable growth.

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[–] stupidcar link

Maybe, maybe not. Consider it in terms of your own workplace: if you worked on a team of 10, and one person got laid off, would that seem so huge? I think the question is whether this round of layoffs is in response to an acute cash flow issue or just part of long-term financial prudency. They fact that they waited until after Christmas and are providing 8 weeks of pay and benefits makes me hopeful that it's the latter.

Also, given that Falcon 9 is now essentially "done", I expect there probably is a fair bit of internal capacity that's accumulated during its development which can be cut. For example, SpaceX is famous for building a lot of components in house, but perhaps they'll move more to using subcontractors for Falcon 9 parts. That might free up money to spend on R&D. The challenge will be to become leaner and save money in the core launch business without compromising standards. It'll only take a couple of accidents to trash their reputation.

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[–] takeda link

Waiting until after Christmas is indeed nice, but the 8 weeks is actually mandated by law.

California WARN act applies to any site that has at least 70 employees and lays of at least 50. When this is triggered, the employer needs to provide at least 60 days notice.

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[–] mdorazio link

WARN only applies to notice, not to severance pay. As far as I know, even in a mass layoff situation in CA like this, they are not required to provide any compensation. You could look at it as "hey we're going to fire you in 60 days per WARN, so just stop working now and we'll pay you for that time" but it's not quite the same - they could just notify them, make them work the 8 weeks and not provide any actual severance pay.

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[–] sjburt link

Likely they would rather send people home and pay them than risk theft or sabotage.

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[–] paulie_a link

While there have been cases of that the average person is going to fullfil their obligation and collect the check. Any manager that really is concerned about theft and sabotage in that scenario should not be a manager. Employees steal and sometimes sabotage while gainfully employed too.

Everyday the company is already risking that.

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[–] garmaine link

> While there have been cases of that the average person is going to fullfil their obligation and collect the check.

It only takes one. Risk to the company is much bigger when you’re building rockets than your typical software shop, too.

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[–] paulie_a link

My point was that risk already is there. That person that got passed over for a promotion for instance. It only takes one that is still employed at a company.

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[–] mlthoughts2018 link

8 weeks of pay as severance is insultingly horrible, even for very junior employees. If a company hopes to grow and be taken seriously as a professional workplace, you have to do much, much better than 8 weeks pay & benefits for severance.

I’ve said it before and I’ll say it again. Always negotiate severance up front as part of any job offer, and consider 4-6 months as an absolute minimum for junior or mid-level employees, and at least 12 months of pay for senior employees. Simply turn down job offers when a company won’t offer this and take a longer time to find an offer at one of the (many) companies that will.

Most companies will negotiate severance with you but you have to ask and make it clear that in-writing severance details to serve as protection against unexpected unemployment from layoffs is a dealbreaker for you.

Most candidates won’t negotiate this, which is why most companies don’t have to offer it except to the few special case people that require it.

If we all, as candidates, unilaterally make it impossible to hire us without adequate severance, we’ll all be better off.. instead of just the minority of candidates who put forward the effort to negotiate it and aren’t afraid to turn down offers that don’t include defined severance agreements.

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[–] chucksmash link

> I’ve said it before and I’ll say it again. Always negotiate severance up front as part of any job offer, and consider 4-6 months as an absolute minimum for junior or mid-level employees, and at least 12 months of pay for senior employees. Simply turn down job offers when a company won’t offer this and take a longer time to find an offer at one of the (many) companies that will.

Have you put this into practice? It'd be a nice contingency to have in place but seems like it'd put a damper on the tone of the negotiations ("I'm already thinking about being let go and want to make it really expensive for you to do so").

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[–] mlthoughts2018 link

Yes, I have absolutely put this into practice. I have encountered companies that have blanket policies about either low or no severance, and I simply reject any offer or request to continue negotiations without severance. This has certainly made job searches take longer and certainly left me feeling frustrated after investing time in take-home tests, on-site interviews and negotiations, only to learn that severance agreements weren’t possible in some cases.

But I gained a lot of experience regarding how to negotiate it and talk about it, and ultimately found that most companies are perfectly happy to negotiate it as part of the job offer.

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[–] whamlastxmas link

I think most every job I've had as a developer would think it ridiculous for me to ask for severance. Severance is meant for high end positions where there's a large cost to the employee to switch jobs because of how illiquid management and executive roles can be. Developer jobs are extremely easy to switch between.

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[–] mlthoughts2018 link

It’s wrong thinking like this that allows companies to continue omitting severance from many basic developer job offers. Meanwhile, if you don’t assume “it’s ridiculous” and actually ask for it, you find many companies are perfectly willing to negotiate it, even for junior level software engineering positions.

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[–] wolco link

It is more like you work at a company with 10 people. One person is fired but that person happens to be hr. The remaining 9 somehow get payroll done but someone is always short.

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[–] sonnyblarney link

10% is huge by any measure.

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[–] RachelF link

Good ol' Roman army strategy of "Decimation", in 1 in 10. https://en.wikipedia.org/wiki/Decimation_(Roman_army)

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[–] onetimemanytime link

"SpaceX decimates its WorForce" would have been just as correct but then Swat Teams might have moved in :).

On topic, probably just cutting out the fat (I'm sure most companies can fire 10% and a month later very few would notice the difference). But then, why not move them to R&D? I doubt SpaceX has cash problems to fire (more or less) essential workers.

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[–] wolco link

As long as the company is planning on doing 10% less than most will not notice.

10% usually means 10% to 40% of company productivity is affected shortterm. 10% leave, 5% wanted to get fired but didn't, 25% will think they are next and change how they work (some positive some negative).

It is usually a signal for top performers to start moving on. In this case the story is spacex is growing conflicts with the layoffs.

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[–] fma link

I work for GM (for now). 15% layoffs were announced before Christmas... No one knows when the ax will drop. Rumor is Monday or Tuesday.

Moral is low and the office has been pretty damn quiet. Meanwhile we just raises earnings forecast today...

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[–] tyfon link

The forecast increase is probably a direct result of the layoff and they needed it to "meet the quarter".

I have the quarterly cycle. I find it extremely bad for both the society and companies when nobody takes the long term view.

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[–] fma link

No... It was part of the 2018 announcement. 2018 was better than expected so they revised 2019 forecast.

"Early Friday, GM said 2018 EPS will exceed previous guidance of $5.80-$6.20. It also expects to surpass an earlier view of adjusted automotive free cash flow of $4 billion."

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[–] undefined link
[deleted]

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[–] pbhjpbhj link

Which is kinda just how capitalism "works".

In certain circumstances, once the means of production are created [most of] the workers are no longer needed, but the means being privately held (by a narrow group of owners) means they alone can benefit going forward.

You can make a feast together and share it; or you can make a feast together, kick out most of the helpers and gorge yourself.

Capitalism says the second option is better because you get to have more.

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[–] CryptoPunk link

>>but the means being privately held (by a narrow group of owners) means they alone can benefit going forward.

No, capital expanding has social benefits in reducing consumer prices, which increases purchasing power.

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[–] roenxi link

Strictly speaking, Capitalism says that the Capitalists get to choose which option they go with.

In a system with healthy incentives, we might expect Option 1 to be the sensible capitalist equilibrium, because capital needs to be maintained and the builders/maintainers become the same people.

Don't forget that, in theory, the workers can become capitalists themselves if they aren't getting a good share of the benefits. In my view usually when they don't it is because of government interference (eg, the pre-Uber situation in taxis, or how regulation tends to entrench existing players).

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[–] ambicapter link

You don't "become" capitalist, a capitalist has capital, and if you don't have any capital, you're not a capitalist.

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[–] FakeComments link

I disagree.

As an example, someone who switches from working as a landscaper to running a landscaping business has switched from a worker role to a capitalist role — even though they likely spent less money doing so than a software engineer worker owns. Being a “capitalist” is defined by capitalizing ventures, not the mere volume of capital.

I would argue that the reason society has become so disequitable is that we’ve made it difficult to transition between worker and small capitalist — that is to say, that we’ve undermined small and lifestyle businesses.

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[–] CryptoPunk link

Anyone saving/investing a portion of their income is becoming a capitalist.

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[–] computerex link

I am not sure why you're getting downvoted. Imagine if Apple/iPhone lost 10% of its growth, people would start panicking. Context is extremely important. 10% of a dollar is not a lot of money, but 10% of a billion USD would be many times what I'd need for the rest of my life.

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[–] catmanjan link

By that logic no company with less than 11 people should ever fire anyone...

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[–] cyberferret link

Firing one person in a 10 person company could mean that you lose your entire accounting/finance skillset in one fell swoop. Or your sole developer. It is a big deal in terms of intellectual property and skill pool within your organisation.

Down stream impact of how to cope with that loss is another factor. Fire your book keeper and does your remaining engineering team have to spend 10% of their time doing invoices and reconciling bank accounts?

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[–] wongarsu link

It could also mean firing that one developer who vastly underperforms, but you still have 5 other skilled developers because developing happens to be what your company does.

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[–] undefined link
[deleted]

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[–] hannasanarion link

Pretty much, yeah. In an 11 person company, each individual is basically a whole department. That one person might be your only marketer, or your only frontend developer, or your only accountant. That's a really big deal.

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[–] whatshisface link

To be fair, a firing in an 11-man company can be a pretty big deal.

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[–] rb666 link

Really? Look around you next time you're in the office, could you really not lose at least 1 of those 9 slackers around you?

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[–] Fomite link

I mean, if nothing else, 'decimate' has the meaning it has for a reason.

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[–] TeMPOraL link

Its gravitas comes from indiscriminate killing, not from the number.

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[–] mango7283 link

And if you can't find a slacker, that means you must be the slacker, I suppose!

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[–] jon-wood link

You must be fun to work with. I’ve worked in 10 person companies, and it’s the sort of place where there’s nowhere to hide. By extension you generally won’t find slackers in a small company.

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[–] yholio link

> towards sitting on the falcon 9 and launching to LEO.

That would still leave them with many thousands of redundant employees. Falcon 9 is done and the production is dropping due to reusability. Recently, they had a 3rd re-flight of the same core, which, coupled with the slowdown of the global launch market, means that in the next years they will need to produce a third to a half of the number of cores they used in 2017. The same for Merlin engines.

They basically fulfilled their mission and drastically reduced the cost of getting into orbit - which for the space industry is dominated by labor costs. Without a greatly increased demand, they can't justify keeping those people around.

And they can't roll all the Falcon production workforce towards BFR, Raptor and Starlink since those are still strongly R&D dominated projects and the skill set is incompatible. At the same time, they have hundreds of engineering positions open for those projects.

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[–] sitkack link

> they can't justify keeping those people around

I would have put them on other Musk projects to keep them from going to the competition. SpaceX doesn't have a monopoly on low cost launch. The next place to figure out how to 3d print a tungsten titanium copper nickel chromium iron one piece rocket nozzle will also have that advantage.

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[–] njarboe link

If Musk is really more interested in getting humanity into space as soon as possible then padding his already large bankroll, having some competition can really keep people and companies focused on making quick progress. I have heard him say he would like some more companies competing with SpaceX in interviews for just this reason and his actions seem to suggest he his main goal in life really is making humanity a multi-planet civilization.

He also said that he joined Tesla to help jump start the electric car revolution by a decade and his total asset liquidation in 2008 to support Tesla and SpaceX seems to support that this attitude is not just some PR move, but who knows for sure.

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[–] yholio link

Musk is incredibly stretched and has very nearly missed bankruptcy several times. It seems highly unlikely he can afford the largesse to hand over any business to his competitors. A SpaceX-2 without billions sunk in R&D could drastically undercut their launch prices and capture the lion's share of the market, without having any intention to go to Mars. This would be great for the launch market and access to LEO but would delay colonization.

It's pretty clear Musk sees his for profit endeavors - Tesla, commercial and government launches, Starlink - as cash cows for a long term investment into something no one in the market is yet ready to finance. Until that changes and Mars becomes an interesting commercial proposition, Musk will ruthlessly pursue his business and leave nothing on the table, precisely to acquire the funds to bootstrap his vision.

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[–] sitkack link

This is an interesting take, they weren't laid off, they graduated.

The same thing is used to train a talent pool in a vendor eco system, hire contractors to build demo apps and integrations, but cycle them out after every project. All those people can now put Tech X on their resume.

SpaceX definitely transformed the entire endeavor of space travel.

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[–] jccooper link

Depends on management style. Stack ranking companies, which used to include MS and GE) would fire 10% (theoretically the bottom 10%) every year. It's no longer fashionable, but there are probably some that still do this more or less.

Musk does seem to believe in occasionally "trimming the fat" when the numbers get tight. SpaceX did this exact thing in 2014, and Tesla has done it recently (and is now back over the headcount post-layoffs).

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[–] inferiorhuman link

It's a big fraction but it's not necessarily unheard of. For example Autodesk laid off about 13% of its workforce at the end of 2017. Additionally, in California you've got to give plenty of advance notice and as a result the state tracks mass layoffs[1].

1: https://www.edd.ca.gov/jobs_and_training/Layoff_Services_WAR...

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[–] sova link

Thanks very much for the link. They only show how many layoffs, and not percentage of workforce. Still, good data.

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[–] tamasrepus link

10% = literally /decimated/. https://www.wordnik.com/words/decimate (to reduce by 1 in 10).

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[–] usrusr link

Maybe reusability is already having the desired effects? When a reusable launch is cheaper than using an expendable rocket, a big chunk of the savings must be labor (the raw materials are cheap) SpaceX, I think, is doing unusually deep manufacturing (vs contracting out, where most of the the hit of reduced labor demand would happen at component suppliers), so the reduction is at their own workforce if the increased efficiency is not fully compensated by increased demand.

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[–] entity345 link

In my experience, the larger the company the less painful it is to fire 10%.

In large engineering organisations, laying off 10% makes no difference at all on anything apart from the ego of managers whose teams shrink.

On the topic, wasn't Jack Welsh/GE that popularised the idea of firing the bottom 10% every single year? Not saying that this is necessarily a good idea but that shows the amount of slack in large organisations.

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[–] JKCalhoun link

Must be great for morale.

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[–] Spooky23 link

It encourages all of sorts of dysfunctional behavior. I know one guy who would horde orphan teams to use as cannon fodder and protect his core team.

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[–] pferde link

It really is. After every such round, I think to myself "finally!". And things start getting done slightly faster afterwards.

Edit: In any big corp, there are usually many employees who act as "barriers" to others. Either because they feel secure enough in their job and don't really care about performing, or because they lost sight of why things are being done, and are focusing on bureaucracy and "processes" for the sake of those two things.

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[–] jjoonathan link

The rounds of firing reliably identify the low productivity people? I'd have expected the opposite -- that they reliably identify those least able to swing the politics necessary to win high-visibility work, who in my experience are typically high-productivity individuals.

If the decimations have been going on for some time, I'd expect them to reliably hit low-performers, but only because the obvious low performers were hired as sacrificial lambs in the first place, which puts the whole exercise deep in "cobra effect" territory.

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[–] pferde link

Of course, it's not 100% accurate, but so far, it looks like there's some good observation behind the firing decisions.

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[–] rwj link

The one time I lived through a 10% reduction, the results were not catastrophic, but still pretty bad. Morale took a huge hit. What's worse, is that it spooks everyone. Resumes get updated, networks get activated, and you find a lot of people leaving after the layoff for new jobs.

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[–] fuddle link

I would think SpaceX isn't like most large, stable companies as their primary goal is the colonization of Mars.

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[–] ATsch link

If you ask the PR department or look at the "About Us" section of any company, you'll find some fantastical story how they're improving humanity by earning millions doing whatever they do too.

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[–] 7952 link

Sure, but you get impression that spacex is actually serious about its mission, unlike most companies with those kind of pages.

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[–] CryptoPunk link

Affordable orbital and interplanetary transportation would massively improve the state of humanity.

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[–] undefined link
[deleted]

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[–] kevin_thibedeau link

First we need a self-sufficient Antarctic colony. Any takers?

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[–] XorNot link

The Antarctic is actually heavily protected by treaties preventing colonisation and exploitation of resources.

This all goes up for grabs when the treaties expire in a few decades and it's presently an environmental issue to try and get them resigned rather than have an oil rush there.

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[–] turtlecloud link

Yes. Will be keeping an eye for the polar ice war over Antarctica

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[–] adrianN link

When we establish a Mars colony it will probably take centuries before it's truly self-sufficient. I don't see the point of starting with a self sufficient colony on Earth, especially if the challenges are quite different from Mars.

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[–] mnl link

Well, those challenges are fairly trivial in comparison, so it'd probably be good training.

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[–] sitkack link

Take Mars, I am heading to Mercury.

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[–] 14 link

What would you do when you got there? Thought it was sort of inhabitable for humans with such temperature swings.

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[–] marktangotango link

Read up on mercury, it’s tide locked one face to the sun, other side dark and cold. There’s dusk/sunrise zone that’s probably livable.

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[–] stretchwithme link

I think it's just refocusing on Starlink. Their hoped for capital raise was only half subscribed.

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[–] Spooky23 link

All of the time. Big banks cull numbers like that annually.

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[–] someguydave link

Perhaps Musk wants to employ only the most committed zealots and pay them in hope.

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[–] undefined link
[deleted]

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[–] whatshisface link

10% is a big fraction. How often do large, stable companies execute a layoff like that? Sometimes layoffs can be not so bad, for example when that's the company's way of clearing off the managers' firing wishlist without incurring legal trouble. However at 10% of the workforce, this may be a change of direction away from R&D and towards sitting on the falcon 9 and launching to LEO.

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[–] mellow-lake-day link
[–] swampthinker link

This isn't the first time SpaceX has done a 10% layoff round [1]. It seems like they do this at key inflection points where they're relatively sure they can make the next tech leap, and need to retool their workforce.

[1] https://forum.nasaspaceflight.com/index.php?topic=35254.0

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[–] wcoenen link

If those employees go to China with trade secrets, they might be violating ITAR. ITAR is enforced with big fines and prison time.

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[–] nickthemagicman link

Not easy to catch though.

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[–] dogma1138 link

Define easy anyone who works on such technologies is on some FBI database somewhere and likely more than just one.

SpaceX doesn’t hire non-US citizens due to how hard it is to get the security clearance needed for them if they try to go to China they will likely get caught maybe not everyone, but enough to prevent any real knowledge transfer and more importantly the first one that will get caught is going to be made an example for the rest.

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[–] jamiek88 link

They can and do hire approved permanent residents too.

It’s harder but they can work on ITAR information too.

However the point stands that those people are vetted and tracked. How effective that is once they are in China or Russia etc I don’t know.

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[–] dogma1138 link

They can but I don’t think they do that Elon was asked several why don’t they hire non citizens.

I’m sure some special cases do happen but the bulk of their workforce is US citizens.

And again you assume that they won’t get caught going to Russia or China to begin with or that they won’t be tasked with assets in country once they arrive.

We’re talking about 500-600 people here out of them it’s not clear how many would be really critical for technology transfer prevention but say it’s 25% so what we have is about 150 people or so that need to be tracked say 10% out of those will be contacted by a foreign entity that’s what 15 people?

It’s really not hard to track them at that point.

In fact I would guarantee you that this likely will be covered by their exit interview, they might even get a “scary” federal agent explaining them the do’s and don’ts and likely many of them already know them.

And again this isn’t a new thing, NASA and the defense industry have fired people before it’s jot like it’s the first time that 500 people with security clearances lose jobs.

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[–] lutorm link

They don't care if you're a citizen or not, they care about whether you're legally allowed to work on rockets. From an ITAR perspective, a green card holder is the same as a US citizen, and from a recruiting perspective there is no difference.

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[–] saberience link

They do definitely hire many green card holders, I know because I was going to be one if their offer had been better.

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[–] onetimemanytime link

zaktly, and one is enough. No doubt in my mind that China has at least a few spies in all major US companies. It's hard to catch, especially if you have a nation state teaching you how to.

But then a job is nothing compared to what China can pay them for a thumb-drive full of Tesla's secrets so even highly paid employees might do it for money. (Tesla is opening a factory in China though...so they might be ready to have some secrets stolen /priced in)

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[–] gruez link

so is espionage and treason

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[–] marcinzm link

>It was my understanding that the degree to which those can be enforced in California is limited.

California limits non-compete agreements and anti-moonlighting clauses however, as far as I know, does not limit NDAs.

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[–] onetimemanytime link

Ok, but they might know classified information. Maybe when they worked or accessed it they agreed to keep it secret forever. That trumps usual NDAs.

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[–] Nokinside link

NDAs are used to protect both confidential information and trade secrets but trade secrets are treated differently from confidential information by the courts.

In typical NDA you specify a defined period of time to avoid the risk of a court declaring that an NDA is too restrictive. This should not apply to trade secret. Trade secret lasts indefinitely even after NDA time period expires if all other conditions for trade secret are met.

There are some cases where NDA expiring invalidates trade secret but it's mostly due to specific circumstances or badly formed NDA. You should inform the employees when they are dealing with a trade secret and use all means to keep them secret.

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[–] late2part link

In general, in USA and California, NDAs are extremely enforceable.

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[–] bunkydoo link

Well I'm not sure trade secrets matter when you have someone like Musk behind the wheel of an operation like this. For example: most of Tesla's stuff is open sourced and there are no electric cars that currently come close.

From personally seeing some of their stuff with my own two eyes: anyone trying to copy even off stolen diagrams would end up with the Chinese or Russian version of the Challenger.

In the case of the Russians, they STOLE the blueprints for the shuttle and built one at Baikonur, that thing never saw the light of day and is rotting in a decomposing hangar in Kazakhstan.

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[–] Fuckyourself link

Also, i assume with a workforce of 7K not every single one of them is actually working with classified information every day.

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[–] ginko link

Not sure if this is still the case but didn't SpaceX make a point to stick to trade secrets instead of patents[1] for fear of Chinese rocket agencies copying them anyways?

If they lay off 10% of their workforce, how do they ensure that their trade secrets are kept safe? Lay off only low-risk employees? NDAs? It was my understanding that the degree to which those can be enforced in California is limited.

[1] https://www.nasdaq.com/article/is-elon-musks-spacex-protecte...

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[–] btrask link

> imagine they were 'robots'

No. Don't.

Edit to add: I understand you were using this as a thought experiment. Sorry for knee-jerking.

If you're employing people to do something robots can't, you need to understand that the way to treat them is also different. This goes double if your mission is to improve the world instead of outright capitalism.

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[–] gdy link

"If you're employing people to do something robots can't, you need to understand that the way to treat them is also different"

And if you're employing people to do what robots can do, you can treat them as robots?

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[–] taurath link

Presumably, one doesn’t want to prune a spaceflight organization quite as aggressively if it jeopardizes mission safety...

Could also be that they consider themselves “done” with major design phases of the heavy, while the people mover stuff is too far away to engage mid level designers with effectively?

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[–] gaius link

hey, design/build the thing, then fire those who designed it' type thing, which definitely happens

That’s OK if you hire contractors and pay them premium contractors rates. It’s sleazy and underhanded to make people believe that job security is part of the “package” then bait-and-switch.

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[–] aviv link

Yep, pruning is essential. It's the HR equivalent of code refactoring.

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[–] sonnyblarney link

My gut says this is an aggressive Muskian decimation.

1) Maybe brought on themselves: 'hey, design/build the thing, then fire those who designed it' type thing, which definitely happens. It happens to companies in a crunch, or those who just put the outcome ahead of everything else.

2) A decimation: let's use this as an opportunity to drop anyone we feel is not cutting it - and teams that we created/hired we realize we don't want/need.

3) General organizational shakeup.

4) A true and real opex cutback ahead of anticipated future needs.

The thing is - outside of human terms - it's a big cut but it might be highly rational.

'Pruning' I think is a essential aspect of any healthy organization, forcing entities to rethink, to shake them out of their settled positions, getting rid of organizational cruft.

Of course, there are humans behind every decision which makes it quite fundamentally something else.

But if you could imagine they were 'robots', as if to remove any issues of compassion and concern for externalized outcomes, and this were simply a simple dispassionate re-org ... then you can see where the economics might be pointing.

We also don't know the terms of the layoff: maybe some of them are voluntary. Maybe the payouts are huge. Sometimes these things work out well for a lot of those involved, obviously it doesn't for others.

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[–] dmichulke link

That's because the DoD is probably the most cash-strapped ministry of all ministries of all nations /s

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[–] killjoywashere link

For comparison, DoD is reducing its medical workforce for 13%, 17,000 jobs. Makes total sense to me. I only work 12 hours a day, 6-7 days a week, so really, less than half-time.

https://www.military.com/daily-news/2019/01/10/more-17000-un...

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[–] viraptor link

Whatever the reasons for the workforce reduction, this way of doing it is just unnecessarily cruel.

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[–] m0zg link

I disagree. What would be more cruel is to keep people guessing for weeks, or to do several smaller layoffs. That's how it's usually done, and it utterly decimates the morale, and causes the best people to leave.

The best way to do a layoff is to cut once, cut deep, and do it quickly. And of course to not be an asshole and offer severance compensation to folks who were laid off.

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[–] abalone link

> I disagree. What would be more cruel is to keep people guessing for weeks, or to do several smaller layoffs. That's how it's usually done

No it's not and you're presenting a false dichotomy. They made the decision who to fire (to "cut once"). The question is email vs. having managers meet with their impacted direct reports which can definitely and is regularly done inside of one day.

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[–] entee link

I've been at a company where the 1-1 firings occurred over a morning. I was fortunate to keep my job, but I can tell you it was a pretty awful day for those staying (obviously not as bad as for those leaving :(). There's no good way to do this, layoffs of this sort are awful. I actually am not sure this is better or worse. You have a horrible Friday night, with untold stress, but at least you're not sweating at your desk with people being walked in to the back to be canned, afraid of the mere mention of your name or a tap on the shoulder.

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[–] deelowe link

There is a right way to do this. You announce it to the staff and at the same time you let those affected know. It's best to do this at the end of the day.

Telling people "you may or may not still have a job, you'll get an email within the next 72 hours" is ridiculous. So what happens if it's Monday morning and I didn't get an email? Am I still employed? What if there was a glitch? What if I show up and I'm escorted out?

This screams of mismanagement.

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[–] Faark link

> You announce it to the staff and at the same time you let those affected know.

To do this you would have to already have finalized this list of people to let go. Specifying that list beyond rough department targets to actual individuals probably requires involvement of many managers and might be what happened in those 72 hours, but I'd love to hear from someone with actual experience. Could larger organizations actually prepare that without leaking the layoff anyway?

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[–] pbhjpbhj link

Can't you email those not listed for termination, at the same time, and tell them they still have their job.

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[–] drusepth link

>So what happens if it's Monday morning and I didn't get an email?

You still have a job.

>Am I still employed?

Yes.

>What if there was a glitch?

This seems rare, and it seems like people would double check to ensure this doesn't happen (and if it did, to re-send an email).

>What if I show up and I'm escorted out?

Sounds awkward at worst, but now you know.

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[–] nnutter link

As if the slow trod all day long to go through one-by-one doesn’t have its own consequences.

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[–] soapboxrocket link

You are correct about the false dichotomy, but the correct way of doing it would have been to let everyone know who was being let go before they made the announcement. No reason to leave people wondering for any period of time.

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[–] sokoloff link

> No reason to leave people wondering for any period of time.

Play that out a bit. Is the notification a scheduled slack message or email for those terminated? Or do you want each employee being let go to be notified in a face-to-face conversation with their manager and where the details of financial arrangements, healthcare continuity, and other aspects are prepared and with a chance for the employee to ask questions, and for HR and leadership to assess if they appear in a condition to commute home and offer other transport or acute support arrangements if needed?

I think the latter is more appropriate, but a series of those things takes time to execute [longer if managers or layers of managers are being eliminated], and the time between when the first such meeting ends and the last such meeting begins, people are left wondering.

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[–] berbec link

I agree with you. Uncertainty and fear brings a horrible toll on the employees.

I was a teenager in the 90s and my mother worked for IBM. My parents were divorced and I lived with mom. She came home every day exhausted and scared, not knowing when the axe would drop. It went on for years. No one knew the logic of which departments were next; solid performance reviews didn't protect you, seniority, skillet, being management: nothing made you safe. Everyone we knew went to work not knowing if they would make it to lunch.

It was horrible. I'm sure everyone would have much rather the SpaceX method than months or years of agonizing waiting.

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[–] viraptor link

You can still tell everyone immediately at the end of the day. Or just send the email on the weekend. You don't have to say you're going to do it first and keep everyone worried.

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[–] wonderwonder link

There is no great way to do it. If they told people in person, people would frame it as being humiliated and then forced to walk through the office with everyone knowing. If they did not warn people, they would complain about being blind sided. Layoffs are a terrible thing to go through and all things considered I don't think this was a bad way at all. No one had to do the walk of shame, everyone had a day or so to prepare themselves for it.

But that is just my preference, others would prefer something else. Everyone though would prefer not to get laid off. Unfortunate for all involved.

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[–] undefined link
[deleted]

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[–] m0zg link

You can't when you're dealing with 6000+ people. Likely even the managers didn't know so as to avoid feeding the rumor mill. They'll now need to make up their minds about their reports whom they wouldn't mind losing.

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[–] Too link

Are you saying top executives selected 10% out of all 6000 employees without consulting their direct managers who to fire? That would be a random 10% sample at best. Obviously managers would be involved in deciding who is worth to keep or not.

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[–] m0zg link

No, I'm suggesting that managers might have been made to select them on the spot. I worked as a manager. This is usually a very easy question to answer unless your team consists entirely of rockstars, which I haven't experienced in practice. As a manager you are acutely aware of who's producing and who's dragging their feet.

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[–] cortesoft link

No way are the managers going to all stay late on Friday and figure out who to fire on Saturday. Those discussions have already happened, and they know who is being let go.

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[–] m0zg link

This is Musk we're talking about here. He might have decided this over lunch a few hours before the announcement.

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[–] PopeDotNinja link

I worked at a company that did layoffs. They basically sequestered everyone in there work areas, killed Internet access so people couldn't go online (pre smartphones), and walked people out one at a time. It was pretry lame.

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[–] GuiA link

You want to minimize the time where employees who are not being laid off are wondering “am I being laid off?”. Ideally you want that time to be 0, because it can wreck havoc on morale and those 24 or 48 hours of doubt can be enough to push people who are not getting laid off to reach out to their network, recruiters, etc. Now you’re losing high performers.

If indeed everyone was told “check your email over the weekend to find out if you’re laid off or not”, that’s terrible. Tell people who are being laid off that they are being laid off, tell people who are not being laid off why there are layoffs and that they’re not a part of it, but don’t keep everyone in the dark - even if it’s “just” for a day or two.

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[–] topmonk link

Totally agree, if I was laid off I'd like to know right away so I could start job hunting right away.

And if it turns our I wasn't I'd like to know that, too, so I don't lose focus of whatever it is I'm doing.

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[–] api link

Agreed. There is no way to do layoffs that doesn't suck and doesn't harm morale. This avoids some of the worst of it and also keeps it somewhat private.

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[–] mulmen link

What's less cruel? Face to face meetings? Layoffs suck, how is this particularly egregious?

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[–] cyberferret link

Seriously, if you cannot see that "fire by email" is far more impersonal and disconnecting than compassionately meeting with the employee 1 on 1 and giving them a definitive exit path along with the financial support to do so, then please do not ever work in HR or be responsible for employing people in the future.

To subject ALL your employees to the 50/50 prospect that they will have a job come next working day is tantamount to playing Russian Roulette with them using a gun with a 2 bullet chamber - one loaded. The psychological toll even on the 'survivors' will be brutal.

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[–] dorfsmay link

What do you think goes through people's head as their managers walk to them "can we talk" during a staff reduction exercise?

Have you ever sit across an HR person saying all the right things and putting an as empathic as possible face on, and telling you "it's not you, it's us"?

Personally I'd prefer the email, as long as, I have a contact to talk to for the next steps.

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[–] zamadatix link

"Fire by email" isn't a bad option for layoffs in the double digit percentage as long as the delay between notification and sending the emails is low. Meeting 1 on 1 only works in non targeted low scale layoffs, anywhere else and it just creates hysteria.

Also fire by email doesn't mean there isn't a definitive exit path or no financial support. The article itself states the email claimed a minimum of 8 weeks of pay for those laid off.

Also it's 90/10 not 50/50. If you were firing 50% of your workforce there is no avoiding a "brutal" psychological toll for the remaining.

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[–] SampleBourgeois link

Elon Musk is sticking to the Roman definition of decimation

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[–] SEJeff link

The roman definition involved beating 1 in 10 to death by the "coworkers", so no, I don't think 8 weeks of severance and helping them write resumes plus get new jobs elsewhere is a very good definition of decimation.

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[–] mc32 link

In percentage yes, but not in the manner of choosing the affected. Or at least one would hope it’s not every tenth person regardless of role, contribution, etc.

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[–] cyberferret link

I didn't want to like this, but all respect to you for the etymological accuracy and black humour here.

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[–] cyberferret link

> Also it's 90/10 not 50/50.

If 90/10 from the company perspective. From the employee perspective, it sounds like everyone at SpaceX went home on Friday wondering "Do I have a job come Monday?". To each and every one of them, the prospect of having a job versus NOT having a job would have been 50/50 as they had no insight into the decision making process for the layoffs.

Sure, for an employee who may have known they had made a lot of mistakes or were obviously underperforming etc., their knowledge that the chances of them being fired could have been skewed higher, but I am willing to bet that there will be many people thinking "My work is mission critical and I am a hard worker, I think I will be safe..." who will still unexpectedly get the pink slip on Monday.

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[–] mark-r link

Psychologically, if you don't know if you're affected yet the odds feel like 50/50.

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[–] tuesdayrain link

As someone who has been laid off, I would have much preferred an email over the awkward 1 on 1 meeting I got with my boss instead. I've been looking at other jobs already and just wanted to move on with my life. Instead I got stuck in a long conversation which was basically him just showering me with pity that I didn't want but had to graciously accept.

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[–] kerng link

I can see why an email is the better option, seems much cleaner and less awkward. I have seen people go to meetings and while they are in the layoff meeting all there access is cut off - so its purely done to lure the poor employee away to avoid any odd mails afterwards. Pretty lame and distrusting honestly.

Space X seems to still trust everyone fully, most companies dont.

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[–] porpoisely link

That's overly dramatic. I'd prefer an impersonal email over an uncomfortable and humiliating meeting with an HR employee where emotions are running high. What's to be gained by being laid off in person - other than discomfort on both sides and humiliation by laid-off employee?

Just send me an email with all the options and terms and contact information for HR. If I need clarification, let me be the one that seeks HR out.

Also, HR exists to protect the company, not to be your friend. There aren't there to offer compassion. That's not how business or HR works.

But maybe it's because I'm from the younger generation who grew up with email, text, IM, etc. I can see older generations being used to and preferring face-to-face interaction.

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[–] mark-r link

If they're at all afraid of retribution via your computer, notification via email would be impossible - you can only get the email if you still have computer access.

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[–] freewilly1040 link

The 1x1 scenario still involves calling the laid off employees into meetings in sequence while everyone else stresses out wondering if they are next. Layoffs are brutal no matter what you do.

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[–] derekp7 link

Not only that, but as someone who has been through this in the past...

What happens is you find out your department or wing of the building is next. You continue to try to do your job, meanwhile your manager starts walking towards you and stops at a couple cubicles down from you. You breath a slight sigh of relief. Meanwhile you and everyone else is prairie-dogging as others in the office start getting called out, and the VP strolls by and yells at everyone to "have some respect and quit gawking, get back to work". So now you keep your head down, and eventually get a tap on your shoulder from your manager.

You can't help but fight back tears, as you get lead to the conference room where an HR drone explains the package, benefits, and next steps. You are handed a box, escorted back to your desk, and put your personal belongings into the box while being watched like a hawk to make sure you don't do anything stupid. Some things you aren't allowed to put in the box until they are thoroughly examined. A forever half finished document is on your monitor. An email you were about to reply to is still visible, and will go unanswered. Your laptop is shut down, your accounts already locked.

Now you start on the walk of shame carrying the lonely box out to your car, start driving, and then your family wonders why you are home from work so early. But the look on your face tells the whole story, with the look of concern on your wife's face and the look of horror from the kids (of course, being kids, they start asking questions about how this will affect them). "Hey, kids, looks like we will be taking that camping trip a bit early, got some saved up for it, will figure out tomorrow when it gets here. It will be alright."

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[–] perl4ever link

My only experience with layoffs is when one morning we suddenly had a departmental meeting, and it turned out none of us was being laid off, but our manager of over a decade was, and he was already gone, no chance to say goodbye.

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[–] amunategui link

Great description - horrendous thing to go through.

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[–] mc32 link

This is true. Nothing like deer in the headlights when the person is singled out for the meeting. It’s a terrible thing.

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[–] wonderwonder link

It all depends on the person, personally I would prefer the spacex method as I don't have to put on a brave face for someone who is firing me. I also don't have to walk through the office knowing everyone is feeling sorry for me. The warning also gives me a day or so to brace myself in private at my home for the email so I am not caught completely off guard.

Also they fired 10% so there was a 9/10 chance they would be keeping there jobs.

No matter the method its done, everyone emerges from a layoff knowing that they are just a line item on a spreadsheet. Its unfortunate but true.

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[–] raz32dust link

"SpaceX is offering a minimum of eight weeks’ pay and other benefits to laid-off workers, according to Shotwell’s email. The company will also provide assistance with career coaching, resume help and job searches." - They are supporting them through it. I think this is as bad as any other way of lay off. Those 1:1s are farcical anyway. Only thing that could be better is to just send the mail only to the laid off employees.

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[–] derekp7 link

Again, having gone through this a decade ago, that assistance gets outsourced to a company that specializes in it. Effectively it feels like you are attending a community college class on "how to find a job". It's not like they are going to call up a bunch of employers and try to match you to another position somewhere, you are still going to have to do a lot of legg work (home work) yourself. In my case it was somewhat beneficial, although the advice they had for me on my resume got totally shredded by the recruiters I worked with. At least it got me out of the house for 2 hours a day for the next 5 days.

The big lesson I try to pass on to everyone. Don't ever assume you will have a job next week. Be polite to any headhunters, assuming they are the professional kind, keep your resume up to date, network like crazy, have a few side project plans, don't be afraid of small jobs on the side, and most importantly keep a 3 - 6 month emergency fund. That fund doesn't have to be what you make in 6 months, but at least what your bare bones expenses are (mortgage, utility bills, minimum credit card payments), and try to keep your have-to recurring monthly expenses lower (mortgage / car payments, etc). That doesn't mean you can't spend on extra stuff, just make sure you can cancel them at any time.

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[–] Fronzie link

The 6 month emergency fund is good for another reason, as f-you fund: in case working conditions get bad, you know you can just walk away. Somehow the knowing is enough, you never have to mention it, the confidence somehow shines through if you have a difficult chat with your manager.

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[–] rayj link

Lol it's not that big a deal if you lose a job when you have around 12months living expenses saved up. So that goes twords living expenses, then you get unemployment at 60% of income. People need to move on, and stop being so emotionally invested in their work.

You are most likely an at-will employee. You or the employer can terminate the relationship immediately giving any reason or no reason. Just have money saved up and don't be afraid to quit without notice to something better if you need to.

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[–] BeeOnRope link

Personally I would prefer to be fired by email versus an 1 on 1 face to face meeting. The financial support and other helpful tools seem like an orthogonal issue.

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[–] qudat link

No offense but I completely disagree. I would prefer an email over a 1v1 conversation. The employee is not getting fired, they are getting laid off. There are no conversations that need to be had beyond severance discussions.

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[–] mulmen link

I've been laid off face to face, it sucks. How is SpaceX supposed to lay off 600 people in 1 on 1 meetings and what significant difference does that even make?

We don't know the content of the all hands, they could have outlined the support plan there.

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[–] bredren link

Why? People are hired by email all of the time. Full time positions are more transactional now than ever before. There is no real loyalty either way.

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[–] cyberferret link

You skipped right over the hiring facts of: the face to face interviews, consideration, and most importantly, the option for the (potential) employee to exercise their choice of whether to take the job or not.

None of which is available to the employee in a 'fire by email' scenario.

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[–] puppymaster link

you are assuming you know the content of the email. As others have said, severance and support programs could be outlined in the email.

I prefer email over HR walking past all the cubicles praying they won't stop at mine.

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[–] refurb link

Because firing is a much different experience for employees than being hired? That should be obvious.

Having gone through many layoffs, there is no way to do it where it doesn’t suck for everyone involved (those that stay or go).

However, doing it in a way that show management understands the gravity of the situation goes really far in reducing how unpleasant the experience is.

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[–] SECProto link

I've been laid off twice, once in a one-on-one meeting with a manager, and once via an email. The email was much preferable. (Both were in short-term positions, so not really a fair comparison)

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[–] chomp link

The logistics of laying off 6000 people makes it very difficult to hold one on ones. Assuming 30 minutes per person, 8 hours in a day to hold meetings and 5 day work week, that's 75 person-weeks (!) just to hold one on ones.

On top of that, there are security concerns with hanging onto employees and letting them have access to company property during a time that they know they will be fired. Especially for a company that performs services for top secret government projects.

The easiest (though you won't catch me arguing that it's the best) way is to hold a staff meeting, and then let corp IT churn through the 6000 person list over the weekend and remove access.

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[–] mulmen link

They're laying off 10% of 6,000 employees. Not everyone.

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[–] cyberferret link

Firing via SQL query or an email filter. Is this what we have come to?

SELECT * FROM employees ORDER BY last_performance_review_score LIMIT 600;

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[–] rightbyte link

This is acctually probably how they do it.

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[–] mulmen link

Typically higher scores are better. If SpaceX used this query they would fire their 600 best employees. Or they use bad column names.

On top of the lame SQL reference this diminishes the true severity of firing 600 real people. We have no reason to think the firing was this nonchalant. This diminishes the work and humanity of everyone involved.

It appears to be a weak reference to stack ranking.

Do you have any reason to believe this is probdbly how they identified people to be let go?

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[–] dwd link

Default ordering would be ascending order, smallest to largest. You would need to specify DESC to order the higher numbers first.

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[–] mulmen link

Yep, too late and too many beers to be commenting on HN.

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[–] dwd link

I did find it amusing, as the first thing I did seeing the SQL was also run it through my head.

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[–] megablast link

> To subject ALL your employees to the 50/50 prospect that they will have a job come next working day is tantamount to playing Russian Roulet

How is it 50/50? It is 10%.

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[–] cyberferret link

As I mentioned above - it is 10% from the company perspective.

However, it sounded like every employee at SpaceX went home on Friday thinking "Do I still have a job come Monday??". Because no other information seemed to have been imparted as to the selection criteria for the redundancies, every single employee wouldn't have known if they would keep their jobs or not.

Unless they knew they were blatant underperformers or had lots of black marks against them on file, their chances of keeping their jobs was the same as the chance they could be on the 'hit list' for redundancy. 50/50. I am willing to bet that even employees who thought their job was as safe as houses and that they were considered good employees would find them self on the 'let go' list.

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[–] rhizome link

I imagine it's possible that dehumanizing layoffs like this will put SpaceX at a competitive disadvantage, its lunch eventually getting eaten by companies who do care enough about their employees to interact with them in person regarding the business of the company and their place in it, good or bad. This would come out in increased efficiencies due to no surprise-axed-or-not email always threatening to land in their inboxes.

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[–] kerng link

What is dehumanizing? Either way is awful, but companies have to make tough decisions and communicating those is not easy. Many people prefer an email over awkward semi-genuine HR discussions. Coworkers and manager will reach out afterwards in private and in person if they really cared about the connection.

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[–] rhizome link

It's dehumanizing in the strictest sense of the word: communicated by text on a screen rather than in-person.

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[–] mulmen link

That’s a superficial focus on human interaction that ignores he reality of business dealings.

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[–] rhizome link

You're at the "contradiction" level of PG's pyramid of disagreement: https://en.wikipedia.org/wiki/Paul_Graham_(programmer)#Graha...

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[–] zorga link

A business has no responsibility to financially support an ex-employee. If it does so, it's a gift, not something that should be expected.

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[–] fzeroracer link

And employees have no responsibility to stay at a company that treats ex-employees like shit. Actions like these are a great way to demoralize your workforce and entice higher-level employees to jump ship.

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[–] Marsymars link

In many jurisdictions, such a responsibility does exist as mandated by law.

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[–] zorga link

Not in this country.

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[–] airstrike link

1. Prepare the e-mails in advance for each employee that

2. Schedule the "Town Hall" meeting for an important announcement at 4pm on Friday

3. Start the meeting by talking about the company, vision, challenges, recent wins, etc. [Insert a positive announcement here]

4. Tell everyone at 4:20pm that the company will be laying off 10% of the workforce, explain why, etc.

5. At 4:25pm, as you prepare to wrap up the town hall meeting, tell everyone that they will receive an e-mail either letting them know they will be laid off or that they will remain with the company. Thank everyone for their hard work for the company.

6. [Insert another brief, unrelated positive announcement about the company].

7. At 4:31pm, as people walk out the door, have IT send all of the e-mails at the exact same time to everyone who's being laid off. Review the list of employees compulsively beforehand to ensure no mistakes are being made.

8. Together with step 7 send another e-mail to everyone who remains with the company ensuring them they are not being laid off.

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[–] sitkack link

Turn this into a SaaS.

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[–] tux1968 link

Last time I experienced something like this there was a company wide meeting for an hour and a half where everything was explained. When we went back to our desks, there were pink slips waiting for anyone who got let go. No waiting or wondering, no dragged out second guessing.

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[–] war1025 link

My preferred method if this were to happen to me would be: 1. Receive notification not in person 2. Have the option of discussing with my manager in person after I had a chance to process it.

Big news like that takes a while to process. I believe I've read before that if you are firing someone, you are supposed to tell them and then not say anything else until they do. That seems unnecessarily cruel to the person getting the bad news since it puts them very emotionally on the spot.

But I've never been on either side of that, so who knows.

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[–] dilyevsky link

Yes face to face with the person who made the decision (presumably your direct or skip manager) not the random hr person is “less cruel” (really it’s about integrity).

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[–] undefined link
[deleted]

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[–] Cyclone_ link

Firing by email is just not a professional way to do things. Imagine if someone resigned by email.

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[–] madengr link

I worked with someone who did. He came in at 6 AM, sent off an email, and left at 6:15.

I don’t blame him, as our employer has walked out 25 year employees with no notice.

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[–] mark-r link

My employer has done the same. They have done more than one round of layoffs, and it's always the same - you get called into a 1-on-1 meeting, and you never return to your desk.

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[–] qudat link

Business runs on email. I would prefer to be laid off via email.

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[–] kerng link

How else would you resign then writing an email? Are you writing a piece of paper? Written seems much more professional then just verbal, leaves no doubts. Sure, you can tell before in person but email seems the best way.

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[–] rifung link

Layoff by email is like breakup via text message.

The end result is the same and either way it sucks but certainly doing it in face to face seems to generally be considered more personal and perhaps less cowardly.

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[–] mulmen link

Romantic, business and employment relationships aren't the same thing. At all. Do you collect resumes from your dates?

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[–] dylz link

Anecdote from friends' parents, this is done in China for some romantic relationships.

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[–] matz1 link

Its kinda the same thing, what you put on your online profile at dating site work like a resume.

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[–] PhasmaFelis link

If you've got to do it by email, how about "go back to your desks and check your work email" instead of "go home and stew about it for a while"? Extending the delay is sadistic.

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[–] mulmen link

And your usage of sadistic is hyperbolic.

We don’t know the details, employees may have known before walking out the door.

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[–] PhasmaFelis link

> And your usage of sadistic is hyperbolic.

Obviously. It's still a shitty thing to do.

> We don’t know the details, employees may have known before walking out the door.

Huh? We have multiple SpaceX employees on Reddit saying they were told to go home and wait for emails. Some took hours, some are still waiting.

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[–] mulmen link

Source: reddit is not compelling, ever.

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[–] PhasmaFelis link

That's your comeback? "Literally every single person who posts on Reddit ever is a liar"?

You can just admit that you didn't read the top-level comment that we're discussing, you know. It wouldn't look as silly as this.

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[–] ryanmercer link

>What's less cruel?

ANYTHING is better than telling the entire company "go home and compulsively refresh your email all weekend to see if you get to come to work Monday"

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[–] mulmen link

Do we know that is necessary? Why would it take all weekend for 700 emails to be delivered? Why not send an email to all the remaining employees to reassure them they are not being fired? That may have happened, we don't know.

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[–] ryanmercer link

From the reddit comment there's no indication they said when they will be sending the email.

It would have been far more practical to quietly go into each department "Jane, Jack come with us we're putting together a team" "Sally, Quan come with us we're putting together a team" take them all to an area "we're very sorry but we have to lay you off, we have counselors that we can refer to you if you need to talk to someone. We've also got some headhunters we can recommend. It's not personal, we just have to cut costs, you'll find that your company accounts were deactivated at the start of this meeting. We will be more than happy to ask your supervisors to write you letters of recommendation if you'd like, just put on this form where you'd like them sent for your records. Please think of anything that you are in the middle of and type it out in this word doc on the laptops over there".

Not "Hey everybody, go home and wait to see if you get to come in Monday".

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[–] jamiek88 link

That sounds terrible.

Start the process with a lie finish it with asking them to do some work?!

You've just been sucker punched with new team yay! wait not really you’re fired! Now please finish that document you were writing and GTFO.

What? Please think more carefully than this if you are ever in the position of influencing layoffs or delivering the news.

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[–] ryanmercer link

Notifying your employer, that's giving you 2 months of severance, what you're in the middle of doing as to prevent everyone else on your team from having the nightmare of trying to figure out what you were doing as well as providing you with access to counseling and a job placement service is terrible?

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[–] WheelsAtLarge link

From what I've read about Musk, doing it this way is part of his management style. People's feelings come second to getting things done efficiently. Well, efficiently as he sees it.

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[–] omeid2 link

There is nothing efficient about ruining people's weekend while they are being fired. This could have been done by sending out the emails at the end of Friday without making people nervous and worried over weekend.

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[–] dilyevsky link

+1 good way to have the remaining 90% to think long and hard about working some place else.

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[–] JumpCrisscross link

> this way of doing it is just unnecessarily cruel

The right way to lay off varies culture to culture.

I worked on a trading desk. 1:1 personal lay-offs followed by security cleaning out your desk seemed unnecessarily cruel. An e-mail out of hours—and an offer to schedule a phone call—seemed far more gentle. In other cultures, the human touch matters. Given SpaceX’s results-oriented culture, their approach seems appropriate. The goal was to prevent those not getting laid off from seeking new jobs while keeping those being laid off from panicking those staying. Letting everyone go home, finish their after-work schenanigans, and then—before recruiters have a chance to nip—deliver the news is a good balance for the relevant parameters.

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[–] jcroll link

what is the less cruel way to lay off 10% of your workforce

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[–] viraptor link

Tell the affected ones immediately. Don't tell the other 90% that they're potentially getting fired tomorrow. Treat people with respect and be transparent when you hold power over them.

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[–] cyberferret link

Well, rather than a "Don't come Monday" email on a weekend, which effectively gives them 0 working days notice, giving those employees say, 2 weeks notice that they will be terminated at least gives them a chance to re-train for another position or get their resumes together to try and find another job while still getting an income to pay for rent, food etc.

FAR less 'cruel' to give them an opportunity to plan their exit and give them the psychological space to get used to the fact.

EDIT: In light of the 'read the article' responses and downvotes, I wanted to clarify that my comment here is directly addressing the question "what is a less cruel way of laying people off" against the purported scenario above of people being told on Friday to go home and check their emails to see if they still have a job on Monday.

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[–] mulmen link

From the article: "SpaceX is offering a minimum of eight weeks’ pay and other benefits to laid-off workers, according to Shotwell’s email. The company will also provide assistance with career coaching, resume help and job searches."

So SpaceX is giving employees two months to focus their full efforts on finding their next job. This seems less cruel than telling them they will lose their jobs and then expecting them to keep working.

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[–] SeanBoocock link

That need not just be charity on SpaceX's part. The circumstances of the layoff sounds like it would trigger the WARN act: https://en.wikipedia.org/wiki/Worker_Adjustment_and_Retraini.... If so, 60 days notice is a legal requirement, not beneficence on SpaceX's part.

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[–] Dylan16807 link

The notice is a requirement.

Not requiring them to do any work whatsoever for that time is beneficence.

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[–] undefined link
[deleted]

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[–] undefined link
[deleted]

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[–] cyberferret link

That is FAR less cruel, and more in line with how most companies handle a genuine redundancy.

My response above was to do with the fact that employees who were NOT terminated were also subjected to the psychological trauma of spending the weekend guessing whether they had a job come Monday. Not the best way to keep morale high.

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[–] FPGAhacker link

This rarely happens because of liability and security. It’s pretty common to be walked out by security after packing up your stuff when you are laid off.

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[–] hermitdev link

Heh, a hedge fund I worked at didn't even let you back to your desk. You were immediately escorted out by security. "Your personal effects at your desk will be mailed to you." Suppose there were exceptions to say grab keys, wallet or a purse, but you weren't packing up everything.

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[–] rhizome link

AKA the first 10 minutes of the movie Margin Call.

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[–] cycrutchfield link

They already get 8 weeks severance. Keeping them around for 2 weeks to mope doesn’t help anything.

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[–] fzeroracer link

Except keeping people around for two weeks longer allows people to say goodbye to their coworkers and people they might've worked with for years. It allows them to impart their knowledge to anyone else that might need it, document things that need documenting and more importantly: It means the company treats you like an actual human being.

Acting like people are just gonna sit around and mope is not only highly disingenuous but is also a good way to fuck over the people having to fill in the knowledge gaps.

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[–] wonderwonder link

They launch giant multi million dollar missiles into space. Allowing an employee that knows they are terminated and is most likely distracted to continue working on a project like that is not worth the risk. If someone was genuinely upset and wanted revenge, a good portion of them are literally rocket scientists, they could probably figure out a way to do it if given a couple weeks.

Better just to cut ties as quickly as possible. They were given 8 weeks of severance and if they are really friends with the people, they can call them on the way home. They are not banned from communicating with their past co-workers.

I know it sounds harsh but there is no nice way to find out you were fired. This way mitigates the companies risk, provides decent (not great) severance for the employees and time to find a new job while being paid.

The only winners in a layoff are the shareholders.

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[–] fzeroracer link

I used to work for a government contractor and during lay-offs they rarely did the whole plug-pulling nonsense on their employees when they needed to restructure or lay people off.

So I suppose you can consider me highly skeptical when a commercial company makes the excuse that they're doing it for security reasons. Because to me, that sounds like pure bullshit designed to cover for shitty practices.

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[–] wonderwonder link

It's easy for me to take a pragmatic approach from the outside looking in but if I was the one getting laid off, I would probably share your sentiment.

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[–] perl4ever link

I don't know why companies do the "escort you out by security" thing, but I doubt there is a great deal of logic to it, as I have observed that even at a given company, some people are treated like that and some aren't, and there's no sense to it. It's never happened to me, but a former boss of mine was laid off that way, and nobody admitted to knowing why. Yes, he could have destroyed a lot if he'd wanted to, but so could a less senior employee.

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[–] undefined link
[deleted]

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[–] cycrutchfield link

It's also a good way to get a disgruntled worker who still has system privileges or physical access to cause all kinds of havoc. Not worth the risk, even if you think it's more humane.

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[–] fzeroracer link

Not worth the risk? Disgruntled workers only generally arise if you treat your employees like shit and do shit like say, telling employees 'hey you might not have a job on monday but we're not telling you! we're gonna give you a weekend to think about your possible jobloss'.

I honestly hope you never work in HR because your sort of attitude is genuinely disastrous to this industry. Acting like treating your employees with respect is a 'risk' is terrible.

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[–] oceliker link

I agree the mail thing is not great... but you’re saying that of the 600 employees who were laid off, not a single one of them will become disgruntled if they had a good work environment? I too despise HR practices in some instances, but I’d consider them extremely incompetent if they believed in collective goodwill of 600 people who just lost their jobs. Keeping their access to sensitive systems (in a rocket company, no less!) would be opening the company up to sabotage, and HR would be fully (and rightfully) blamed for it.

Also, if I were laid off, why would I want to continue working for them for two more weeks? I don’t care about the company’s success at that point. I’m already getting two months severance; it’s much better to focus entirely on finding a job as quickly as possible. Half a month’s paycheck is not worth the emotional pain of seeing your non-laid-off colleagues continue to live their normal life, but act all awkward around you.

In fact, I’ll go ahead and say: I think your attitude that requests laid-off employees to keep working is disastrous. Nothing about making them come to work is respectful or beneficial to them.

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[–] undefined link
[deleted]

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[–] taneq link

Do it progressively rather than telling everyone "go home and start guessing whether you'll come back." Hack and slash will always have casualties, and you'll lose good people. If you go down the chain asking people confidentially whether there's anyone they feel the team would be better off without, then you can work on removing the weakest links without making the entire company feel like they can't trust you.

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[–] pointillistic link

To tell people face to face, to have the courage instead of hiding behind the impersonal email. Basic etiquette.

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[–] mulmen link

I've been laid off face to face. It's not enjoyable. The logistics of safely laying off 10% of a workforce really prohibits this anyway.

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[–] rleigh link

It's not enjoyable, but it's still the right thing to do.

As for the logistics, each member of staff can be talked to by their immediate manager, making it scale easily. Matter of fact, this once happened to me, and my boss was as clearly upset to let me go as I was to leave. But everyone being let go was informed and given their notice as soon as the workday started, so there was no uncertainty or delay.

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[–] mulmen link

What if the managers are fired too? Should they be kept on just long enough to fire their reports? Is that somehow more humane?

Employment is a business deal. If you consider your relationship with your manager to be personal then you have an unhealthy view of your job.

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[–] purplezooey link

I think we can all agree it is chicken shit to not tell people in person.

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[–] dilyevsky link

Looks like Lumberghs of hn disagree.

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[–] Dylan16807 link

Oh of course, anyone that disagrees with you must be an idiot taking the perspective of a bad boss, even when they're talking about their experience being fired.

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[–] rco8786 link

There’s no good way to do this. At least this way they find out in the comfort of their own homes.

How would you do it?

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[–] 77pt77 link

Standard technique to avoid confrontations.

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[–] teainspace link

How would you execute a 10% layoff at a company sensitive to employee sabotage? I agree I would prefer a face to face personally, but I don't see another way here.

To drag it out another way would leave the company and its operations highly exposed to those individuals leaving in my opinion.

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[–] UnpossibleJim link

I actually like what Musk has done, technology wise, but if this management style doesn't point to him possibly being on the spectrum, I'm not sure what will.

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[–] protomyth link

That would be a horrible e-mail to get caught in a spam filter.

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[–] rbobby link

Hmm... someone mean could certainly have some fun sending fake emails to other employees.

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[–] undefined link
[deleted]

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[–] ryanmercer link

That's brutal. Back around 2008 my OpCo laid off employees for the first time in it's hundredish year history at the time when our current owner laid off people from every OpCo.

It was almost as savage, they went around the office of 70-80 people and grabbed some people at what seemed like random, took them in one door of the conference room and asked them what personal belongings they needed immediately, got those items and had corporate security see them off the property with their severance information. At least that wasn't "go home and worry all weekend" though.

Great way to sabotage company-wide morale SpaceX.

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[–] glitchc link

Wonderful, all hail Elon, the next Howard Hughes.

Seriously, can modern CEOs actually grow a pair and actually face their employees rather than hide behind tech?

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[–] mulmen link

Presumably the all hands meeting was the face to face part?

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[–] glitchc link

Are you serious?

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[–] mulmen link

Yes.

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[–] Deimorz link

According to some comments from employees, the company had an all-hands meeting where everyone was sent home and told to check their email over the weekend to find out if they're being laid off or not: https://www.reddit.com/r/spacex/comments/af1n7f/spacex_will_...

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[–] MisterOctober link

Yep, the warped logic of stack ranking still infects HR thought to this day, in some quarters anyway. It's one of those notions that sounds brilliant at first, but then when you think it all the way through, it reveals itself as patently bizarre and misguided.

As noted, it creates a really unhealthy intra-team sabotage mindset as everybody competes to avoid being at the bottom of the stack. It puts managers in a horrible spot, having to rank 'n' purge when maybe their team was humming along wonderfully all year. It creates an atmosphere of awful fear and dread that distracts from the work.

As one of my buddies said back when MS was still using this accursed system -- "If they'd used stack-ranking at Los Alamos, hell, Oppenheimer would probably have had to fire Feynman!" {obviously not reflective of the historical reality, but I think pithy nonetheless}

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[–] hermitdev link

I worked at a company that did this, then eventually phased it out. We were also required to do a self eval on a variety of categories, one a three point scale: exceeds expectations, meets or does not meet. My managing director point blank told me: no one exceeds expectations and if you dont meet, you're gone. So, the self eval was "meets" all the way down. After 2 years of that bullshit, I stopped filling it out. Figured, if theyre not going to take the opportunity for honest self reflection, why bother? I lasted there another 7 years before I left on my own volition. Never in the 7 years that I did not so the self eval did a manager mention it to me. Fuck that shit.

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[–] whatshisface link

>"If they'd used stack-ranking at Los Alamos, hell, Oppenheimer would probably have had to fire Feynman!"

This seems pretty accurate to me, just imagine what would have happened if the top 10 people in the organization were put on the most important team, and then stack day rolled around...

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[–] erikpukinskis link

Sounds like all of the issues could be solved by just not being committed to 10%, moving to 5% or 2.5% as your workforce gets stronger. And spread the responsibility of choosing who to fire beyond single individuals, so a team of people is responsible for figuring out who is not contributing.

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[–] cryptonector link

That would help, but even so, stack ranking is social and cultural poison. You can do it one random year, but do it every year and watch cooperation within and between teams die out because it's a dog eat dog world you've built.

At what point will business schools please start teaching that stack ranking is a bad idea?

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[–] cbanek link

Ah the glory of the stack ranking. Microsoft did this as well, and it was much celebrated when they stopped, as the stack ranking had a lot of effects that had nothing to do with performance (like coworkers stonewalling each other, or infighting, and what do you do with an org of rockstars).

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[–] sombremesa link

Not to mention that eventually you end up firing some really smart people and find worse replacements (not in the least due to shitty reputation - but also because of regression to the mean and because people are biased towards hiring worse than themselves in this regime). Definitely so at 10% p.a. if you're in a remotely niche industry.

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[–] jpatokal link

Apparently some managers used to hire sacrificial lambs with the express purpose of culling them to spare the rest of the team.

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[–] foxhop link

I think this happened to me at one point.

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[–] duaoebg link

Can confirm

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[–] genericone link

Were the sacrificial lambs at least told in secret that they were 'hired in order to be laid off' at the next round? I hope they were not just given rote tasks, but allowed to explore their skills while they are in limbo so that they can train-up or look for jobs... Nah that's just wishful thinking.

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[–] duaoebg link

If the ‘lamb’ is unfamiliar with the concept there is no hint you could give that would not also open you up to lawsuits.

When I was told that I wasn’t good enough by my new boss and should look for another job on my first day, I thought it was ridiculous, and that it would be possible to change her mind. She was not my hiring boss due to a reorganization that happened just before I started. I hung on for a year and the stress literally nearly killed me, I ended up quitting for health reasons. I got the lowest ranking you could get in what I believe to be the shortest amount of time in the company’s history.

The funny thing is is that I’m a freakish prodigy at my work and after a successful stint at a different company, I ended up back at the same company at much much higher position.

Hating companies like this is like hating a snake that bit you... it’s a snake. At least in the US the money is better.

If I could give advice to anyone who finds themselves in a similar position it would be that failure is not the end and not always your fault. And probably find a new job sooner rather than later.

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[–] whatshisface link

>Hating companies like this is like hating a snake that bit you...

That's true, but in this case it's pretty clear that one defective personality in particular was responsible.

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[–] whatshisface link

Telling someone they're going to be laid off and having them build skills both reduce their "goal performance," thereby serving the purpose of justifiably lowering their stack rank. I can imagine hiring some smart guy with a good resume, then telling him congratulations he just won a year's supply of O'Riley books.

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[–] toomuchtodo link

"I don't even have to come into the office, I can do this job from home."

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[–] guiambros link

Additionally, when the stack ranking is done at the first or second-level manager (which is usually the case), you end up making sub-optimal decisions. Meaning: the bottom 10% on team A may be better than the top 20% of team B. Which then leads A-players to seek to work on B-teams, so they can be on the top of the stack ranking.

Stack ranking is a failed experiment, and by now I think all companies realize that.

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[–] cryptonector link

It won't be over until Harvard, Wharton, and all the other top business schools teach that stack ranking is destructive. Jack Welch is a blithering idiot if he still believes in stack ranking. I've a feeling that the reason a CEO of a company like GE would like stack ranking is the false sensation of control it must give them. In reality, one of the key reasons you have managers in the first place is that management is a people problem, so you need people to manage people, and managers need to get to know the people they manage.

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[–] cryptonector link

Rockstars don't like moving the amps.

No cooperation within teams (one of you has to go, one of you gets a good bonus, the rest get nothing).

No cooperation between teams either (for similar reasons, and besides, you're busy enough trying to shine within your team).

Any innovation that requires a solid team and cooperation just doesn't happen. Lots of innovation that can be done by just one or two people doesn't get approval from mgmt because they don't get it and are busy measuring the wrong things.

So you're forgoing all the best innovations while building a toxic work environment. Your best and brightest will either stay and game the system, or go elsewhere and be happier.

Stack ranking is a highly destructive tool of management. I would recommend it to my competitors, and only to my competitors.

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[–] WheelsAtLarge link

Look at where GE is now. Yes, Welch is gone now but the effects of his leadership are there.

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[–] slededit link

Are we just going to completely ignore the 17 year reign of Jeff Immelt? GE Capital gained enough prominence to destroy the company under his reign. Jeff was the one that acquired one of the nations largest subprime lenders in 2004, primed perfectly to maximize losses in 2008.

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[–] WheelsAtLarge link

You're reinforcing my point Immelt was hand selected by Welch as his replacement. Additionally, Welch made GE's transition to financial services.

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[–] jogjayr link

Jack Welch was a massive GE Capital fan - he praised it to the skies in his books and it really came into its own under him. He said (and I'm paraphrasing) that as a chemical engineer by training, he was blown way that you didn't have to design, manufacture, "bend metal" with GE Capital - just turn GE's strong balance sheet into more money.

Maybe it's possible that that type of culture and system made Immelt the best candidate to take over? Or influenced his own decision-making?

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[–] dwd link

Someone can probably confirm if it's still the case, but based on their Glassdoor reviews they have done stack ranking in the past which is often used to cull the bottom X% each year.

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[–] undefined link
[deleted]

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[–] technotony link

Some think you should do this annually. "Back when he was running GE, Jack Welch famously argued that leaders should fire the bottom 10 percent of their workforce each year, as part of an orderly continuous improvement process." https://www.inc.com/paul-b-brown/should-you-fire-10-of-your-...

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[–] CalChris link

Akin's Laws of Spacecraft Design:

  39. (alternate formulation) The three keys to keeping
       a new human space program affordable and on schedule:
       1)  No new launch vehicles.
       2)  No new launch vehicles.
       3)  Whatever you do, don't develop any new launch vehicles.
I'll admit it does say human space program but it doesn't specify where the humans are.

https://spacecraft.ssl.umd.edu/akins_laws.html

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[–] colordrops link

Sounds to be as much of a fundamental law of the universe as Moore's law.

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[–] whatshisface link

>So you're going from 6 new rockets per year to 2 new rockets per year. Also rockets are not like your software programs that get rewritten every time a manager feels like it. You stick with what works.

Last year, SpaceX had big plans for new rocket designs, a satellite constellation, and more. Unlike a ravioli canning plant, SpaceX has an option other than cutting down to maintnence staff once cash flow positive. If the worst possible interpretation of this news turns out to be true, they will end up managed like a ravioli canning plant and the hockey stick growth projections will go out the window.

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[–] awake link

Unless they're cutting the satellite constellation I think this fits in with what people expected for SpaceX's growth. The problem is even as costs for rocket launches go down we aren't seeking hockey stick growth in the demand for rocket launches. The number of rocket launches per year has remained steady since 2015. SpaceX is getting an increasing number of those launches but even if they got all of them they would only have 40 launches. I'm not sure what else they've publicly advertised which would assume hockey stick growth.

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[–] FlyMoreRockets link

There have been plenty of satellite price flexibility studies that show there is a marked lag between supply and demand.

This is because high launch costs demand extraordinary levels of design and Q&A: there may never be a second chance. Unfortunately, these supply chains have flexibility baked out for some time, perhaps predating the Apollo era.

Lowered launch costs and increased launch opportunities offer increasing failure tolerance to an increasing number of projects which can now afford second chances and backup plans. However, these corporate cultures take time to adapt, they've been built around single-shot opportunities for decades.

TLDR: satellite markets are anything but nimble at this point, due to historical reasons. This will change, given time.

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[–] shaklee3 link

I don't think it has anything to do with launch costs. Satellites take a very long time to develop, and they're hundreds of millions of dollars. You have one shot to get it right, and lowering launch costs doesn't really make a big dent in that.

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[–] vidarh link

Satellites are that expensive in large part because if you're spending hundreds of millions on a launch anyway, you can't afford to launch ten cheaper satellites.

To be a bit hyperbolic: if launches were cheap enough you'd have amateurs launching stuff hacked together in the garage, knowing if they fail it doesn't matter - they can just try again.

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[–] shaklee3 link

I would agree with this if the launch cost was a substantial portion of the satellite. There are a lot more things that play though, especially for Geo satellites. Things like orbital slots are finite, so you really want to make as large of a satellite as possible, which also translates to more expensive. Even if SpaceX gets the launch costs cut in half, that's still not a large portion of the total costs. I believe after all is said and done, the launch cost is still between 5 to 10% of the total costs.

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[–] FlyMoreRockets link

Do you have any substantiated data to go with your pricing assumptions?

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[–] mulmen link

What about the point to point BFR/Starship launches? That could potentially compete with any long haul airline route which would have a huge growth potential. Admittedly it probably requires a different kind of staff.

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[–] erikpukinskis link

So, they have a team of people who is skilled at ramping up production of a (relatively) traditional rocket to volume.

So you've got, say, 3000 people on that team.

That project basically ends, and now you have A) a satellite design and production project, and B) a green field rocket design project.

What you're saying is that you know for sure that all 3000 of those people could have an immediate role on one of those two projects?

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[–] jcims link

Why the doom and gloom posts making rather wild assumptions about who is getting laid off or what it signals?

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[–] ajmurmann link

While everything you say is true they are also building the BFR. Maybe that's different staff though?

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[–] awake link

They've proven that they can make reusable rocket. In the early days they had around 6 launches per year requiring six separate rockets. Now they're hitting 20-25 launches per year and can carry an even larger payload on each launch. But they claim to be able to fly each rocket ten times before needing to make a new one. So you're going from 6 new rockets per year to 2 new rockets per year. Also rockets are not like your software programs that get rewritten every time a manager feels like it. You stick with what works. I think this is entirely expected.

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[–] MichaelMoser123 link

I would expect more companies to add their contact info here. Sounds like a very promising hiring lead!

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[–] TimesOldRoman link

Checking in. Spent 6 years at X and this sounds interesting.

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[–] kepano link

If you are curious you can read more about us here:

https://medium.com/fuzzy-sharp/custom-manufacturing-should-b...

If you don't find something that fits in our job listings you can also name your own job:

https://www.lumi.com/jobs/name-your-job

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[–] theNJR link

Oh my gosh. You solved one of the two most painful parts of selling a physical product. I’m frustrated right now just thinking about how frustrating packaging was for me as CMO of a fast growing CPG startup.

Now do this for contracat manufacturing.

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[–] swampthinker link

Do you guys have any plans for magnetic closure boxes by chance?

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[–] kepano link

Yes, we have factories in our network that manufacture them if you meet the Growth plan or above. Take a look at lumi.com/plans

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[–] kevinlou link

Can confirm, Lumi is an awesome company run by solid founders.

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[–] abcd_f link

You are not on the list - https://www.lumi.com/team

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[–] dclowd9901 link

Pretty impressive. You guys are like Zendesk for shipping.

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[–] moajday link

Do you also hire offshore/remote devs?

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[–] kepano link

Yes we hire remote, in fact dev is distributed but primarily in the US.

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[–] kemitchell link

I'm a random lawyer who'd never heard of Lumi, and I support this message. Don't @ me.

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[–] kepano link

If you are affected by the layoffs in Los Angeles, working in software engineering (esp. on ERP and internal tools), UI/UX, or supply chain — my company, Lumi is hiring https://www.lumi.com/jobs

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[–] pmontra link

I used to work for a mobile phone operator in Europe, so no quick way to lay off people. After the startup phase they ended up with hundreds of people in the software/network department that they really didn't need anymore. Not there at least, as the focus moved from development to operations. Some people were moved to operations but (I spare you the technicalities) we eventually ended up in a separate company providing exactly the same services to the original one. Then we started to get incentives to quit. I left even before they reached that phase. They are still doing the same job with less and less people (I think they moved many jobs in cheaper eastern Europe countries.)

The point is that sometimes you really need less people to do the job or you can find them in other places without affecting the final product or service. There is nothing that can prevent a company to do that, not even employee friendly European legislation.

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[–] jononor link

Sure, adjustments are sometimes natural. The important thing is that is should not affect employees too negatively. Huge difference between a 1-day/1-month resignation notice without compensation, and a multi-month (or even multi-year) reduction process with incentives to quit. The latter makes it possible for basically everyone to get a new decent job and change over without gaps in employment.

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[–] blueboo link

> The point is that sometimes you really need less people

There's another crucial point: that this need is forecastable many (many) months in advance. If people are joining (or continuing to work at) a company with an expectation of investing in the 'long haul', but the company knows that this 'startup phase' isn't likely to last more than another nine months, there's a strong temptation for executives to deceive their employees.

As you say, 'nothing that can prevent a company to do that', but along those lines, there's nothing that prevents seeing this for what it is: an adversarial relationship where companies are doing their best to trick their employees.

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[–] isostatic link

In the UK, if your job is genuinely no longer needed, you can be made redundant, with mimimal pay off and notice (Typically 1 month notice and a minimum of 1 week per year redundancy)

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[–] toyg link

“Genuinely” being basically arbitrary. What you do is you move people from role X to Y then, shortly after, you say role Y is no longer needed.

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[–] celticninja link

Nope, not how it works.

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[–] Milner08 link

Ehh, I've seen that happen in the UK, but only on the small scale. You cant do that if you're making 10% of the workforce redundant but if its one or two people you can. They moved them to a new role, gave them very little work to do and genuinely made them hate work, then after a year (I think they hoped they would have quit by then) the positions magically became redundant and they had a months notice.

Safe to say I left that place of my own accord not long after.

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[–] tyfon link

Same in Norway.

In periods of "low order" for things like shipping/mining a company may put the employees on leave that the government pay, but this is only temporary. It's a method to avoid hire/fire waves.

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[–] aristophenes link

Two points in rebuttal. First, companies can expand more confidently if they know they can reduce more easily if they need to. It is more efficient for companies to be able to right-size themselves. Bolstering this point of view is that the USA has a 4% unemployment rate, which is about as low as you can get without things starting to break down. The US economy has been outperforming almost everyone too, creating more prosperity for more people, compared to countries with more restrictive controls over employment.

Second, specific to SpaceX, they actually succeeded in making reusable rockets. They used to need to build a new rocket for every launch. Then they needed to build their reusable fleet up. Now they don’t need to build hardly any rockets. I think this is what success looks like for them right now. From this point of view a 10% reduction is pretty low, and is only so low because they still have even bigger plans.

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[–] the8472 link

> Bolstering this point of view is that the USA has a 4% unemployment rate

As a counterpoint, Germany has much stronger employee protection laws and unions and has a comparable unemployment rate. That said, resizing is still possible there, it just has some lag.

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[–] Cardinal_ link

Kinda off topic but job protection in Germany is such a joke it's almost fake news. Got terminated recently after 12 months for no reason, filed for unfair dismissal, won the case. 3000 eur is what I got (lawyer fees 1500). You can be fired for very little cost, it's dangerous to think you're protected.

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[–] JanSt link

The longer you are with your employer, the longer the protection. You should also receive Arbeitslosengeld I for at least 6 months (longer if you would‘ve been employed longer) and unlimited time of Arbeitslosengeld II (I think you would qualify), so you won‘t be homeless, freeze, lose your health insurance nor hunger, because it‘s all payed for by social security.

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[–] Cardinal_ link

True but this is more social protection rather than job protection. As for severance pay in Germany, law is half a month salary per year...

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[–] ascar link

My aunt got laid off after ~40 years of employment, which meant a welcomed bit early retirement for her and a multiple year salary severance pay.

My mom got laid off after a bit over 15 years of employment and got about 2 years salary as severance pay.

On top of that stuff like healthinsurance isn't a "benefit", but a social security and taken care of even in unemployment.

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[–] amayne link

Germany counts its non-labor workforce very differently than the US. It’s hard to make a comparison (people over 58 aren’t counted, etc.)

I don’t know if it’s better or worse, just different.

https://www.dw.com/en/debunking-the-myth-of-low-german-unemp...

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[–] pas link

The economic performance and prosperity creation might not be that directly linked. GDP is not a good measure for prosperity of individuals (households). Sure, better than nothing, but there are a lot better ones available. Such as the AHDI - adjusted household disposable income.

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[–] russellbeattie link

That 4% number is complete crap, and you know it. Even if it was accurate, which it isn't, 48% of the U.S. earn less than $30k a year [1] with few benefits. Corporations need to be flexible, but they also need to provide stable long-term employment so our society can grow and prosper.

When Henry Ford launched the Model T, he made sure to pay his workers $5 a day so they could actually afford to buy the cars. It was an ethical choice as much as a business decision. Would SpaceX run out of money without cutting that 10%? Very doubtful, so why do it? Because MBAs decided that's what needed to be done based on today's morally bankrupt standard for running a business.

It's sad, really, that a company with such incredible vision of the future such as SpaceX can still be so short sighted when it comes to social responsibility.

1. https://howmuch.net/articles/how-much-americans-make-in-wage...

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[–] aristophenes link

My comments had nothing to do with a minimum wage discussion, and I doubt SpaceX employs people for even near to minimum wage. This is a company that creates rather high wage jobs. It is also doing very risky things. If the USA had stricter rules about employment protection and all that came with it, Spacex would not exist at all, and the 90% of well paid employees that remain wouldn’t have gotten these jobs.

The ability for companies to take big risks is what pushes the economy forward so that we can all have better lives for a reduced cost, and better jobs too. To “protect” jobs you would hold us all back, we’d still all be working on farms or in factories instead of on computers, increasingly from home. Is that what you want? Why are people rioting in France? Maybe because they feel poorer than their parents. Their laws protecting jobs have removed opportunity from everyone in order to provide stability for some.

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[–] akiselev link

France is rioting because those protections allow them to not because they are slowing down economic growth. France has a culture of rioting and civil disobedience in part because those protections give people enough breathing room to be involved in politics.

Have you ever been to Alabama? Mississippi? Florida outside of the metro areas? They're equivalent to third world countries with infrastructure held together by duct tape and spit. Every time I drive through those states, I feel like I'm in some edgy anarchist's student film about late stage capitalism. Those areas should have been rioting for decades now but US economics is set up in such a way as to deprive the constituency from any practical way of getting involved.

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[–] aristophenes link

Yea, I used to live in central, rural Florida for a few years. It's rural. Farms and ranches. They have a lot of land to cover, a hot and humid climate that eats anything left alone for too long, and not a high density of expendable cash because it's various types of farming which has almost always been low margin. So the roads are going to not be great. But people were as fat and happy there as anywhere else. Spanish moss makes everything look dilapidated, it grows on everything including power lines. Sure it's poor compared to many other places, but I've also been to third world countries, and they are certainly not that. Not even close. So yea, the poorest areas of the USA are still not too bad, I think that says something.

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[–] kire_says link

> They're equivalent to third world countries with infrastructure held together by duct tape and spit

This is deeply hyperbolic.

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[–] zaroth link

Wage growth in the US has stalled out for many years, but just recently since the unemployment rate has gotten so low (and this is with the participation rate rising) we are seeing wage growth in excess of inflation.

Wages will not rise if the labor supply exceeds demand. You need more jobs and/or fewer people in the labor force before wages will rise.

The American approach is to provide business friendly regulations and tax policy which incentivize companies to invest and take risks. The “social contract” is not vested with the company, but rather a free flow of employees between companies based on who will hire whom, who will pay the most competitive salary and benefits, and which companies are the most attractive.

The state/Federal government then provides programs that basically provide umbrella protection for all workers like unemployment insurance, short term disability, marketplace health plans, etc.

It’s not efficient for individual companies to be providing welfare to employees they don’t want or need. It’s a drain in the entire economy because the employee is doing less valuable work than they could do elsewhere, and the company has less money to hire workers they actually need.

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[–] pas link

> That 4% number is complete crap, and you know it.

Could you explain it please?

Even U6 is below 8 percent.

https://www.macrotrends.net/1377/u6-unemployment-rate

the part time part is big of course ( https://fredblog.stlouisfed.org/2015/05/the-many-flavors-of-... ) but that's how it was for decades since BLS started tracking it.

With regards to ethical wages, SpaceX should pay well, so people don't depend on them (they can save enough to be able to sustain themselves for at least a few months while they look for a new job). If SpaceX doesn't need that many workers they should give them prior notice (2 months or more at least, I don't know how they handled this).

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[–] aristophenes link

Article says 8 weeks of pay minimum, so that’s two months. USA has 6 months of unemployment benefits at half pay, which the employer pays for. Not sure if the severance pay comes with an agreement to not use that...

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[–] undefined link
[deleted]

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[–] Spooky23 link

We’ve pushed millions out of the workforce, partially with prisons, partially with welfare reform.

There’s basically two Americas. In the other one, 40-60% of adults aren’t working.

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[–] TheCoelacanth link

The employment to population ratio is 79.7% for people 25-54. That has only been exceeded for less than 10 years in history. The only time it has ever been exceeded by more than a point was June 1997-May 2001 during the dot-com bubble.

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[–] Spooky23 link

For some demographic groups, labor force participation is significantly lower. This is what I’m referring to.

Unemployment only factors in labor force participants.

Data: https://www.bls.gov/emp/tables/civilian-labor-force-particip...

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[–] TheCoelacanth link

Employment to population ratio does not exclude anyone. It is the number of people divided by the number of people who are employed. It is also not 2016 anymore. The prime-age labor force participation rate has risen about a point since then.

Labor force participation rate is also not a measure of employment. It is the number of people who are employed plus the number of people who are actively looking for employment but who aren't employed. If you want strictly what portion of the population is currently working, that is employment to population ratio, which is what I posted.

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[–] Spooky23 link

That ratio varies significantly for African Americans, rural whites and African Americans and Hispanic women.

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[–] amayne link

The Ford pay thing is poorly understood. The factory had ridiculously high turnover and it severely impacted productivity. Nearly half the $5 wage came from a bonus after a committee visited your home and decided you were living morally according to Henry Ford’s standards: https://www.forbes.com/sites/timworstall/2012/03/04/the-stor...

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[–] Symmetry link

That 4% number really isn't crap. By favorite restaurant close to work just cut lunchtime service because they couldn't hire enough staff and I see "Help wanted" signs all over just like I remember from back in 2000.

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[–] unethical_ban link

So cut from the top down, period? Cut the people with the vision and strategy of the company, until nothing but the assemblers and forklift drivers are left?

I believe in worker rights, and the ability of a person to live in relative economic security. But should a company not EVER be able to restructure when it realizes it has too many workers, or too broad a mission?

Is 2 months pay and medical not a decent send-off for workers who provide little value to a company?

I wish healthcare were publicly provided, but besides that, if the alternative were for SpaceX to file bankruptcy or to go broke for lack of competent management, I'll take some laid off workers.

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[–] johnfn link

> Cut the people with the vision and strategy of the company,

The vision and strategy that lead directly to layoffs? Seems like a reasonable thing to me.

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[–] kerbalspacepro link

Imagine you run a start-up. You need to expand rapidly and hire all sorts of salespeople. In 10 years you have cornered the market so well that there is no (good) alternative product and growth in the market de facto goes to you. You are the default option.

Do you keep the salespeople that you hired, or do you cut management for getting in the situation that salespeople weren't creating any value?

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[–] candiodari link

It's funny how you assume there'a choice. Unemployment in Europe as a whole (including Eastern Europe) is ~20%. Depends on what/when exactly of course but it is. Government (non-productive by definition, by which I mean they don't add value, not that they're not useful) is easily half of the remainder. So Europe has 40% value-adding employees among the working age population, which is about half the total population, or 20%.

In America it's actually better, close to 30%. Everywhere else it's much worse. In the Middle East, Africa, most of Asia it's at most 10%, and usually less than half that.

That means that you could, not in 50 years when the robots have taken over, TODAY, kill 85% of the population and the net effect on the world would be ... nothing. GDP wouldn't drop by so much as a dollar. Today, 85% of all humans alive are useless for the economy (some are school children and will become useful, but you could assume that to be ~10% and you wouldn't be far off the mark).

So for doing everything we do today, and for guaranteeing the future, we need around 25% of the human race. Everyone else is economically useless.

Note that this figure has been dropping for 40%, and has been for essentially all of history, with only short blips where more of the human race is actually useful (like the 30 or so post-WWII years). Even 15% economically useful population, historically speaking, is actually high, not low. What I mean to say is that the neutral expectation should be that that number is going to drop, not rise.

So: no, a company should not ever be able to restructure. Every month, every day, every second we can keep that number up by even a small amount gives use one more month, one more day, one more second of the society we currently have, where people are actually somewhat useful. The alternative, if you think it through, I'm sure you'll see, is war.

Or to put it another way: we need these people to have a job much more than we need a few extra dollars of GDP.

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[–] antientropic link

> Unemployment in Europe as a whole (including Eastern Europe) is ~20%.

According to [1] unemployment in the EU-28 is actually 6.7% as of November 2018. Of course, there are some European countries that are not in the EU, but I doubt that including them will cause the figure to rise to 20%.

[1] https://ec.europa.eu/eurostat/statistics-explained/index.php...

> So for doing everything we do today, and for guaranteeing the future, we need around 25% of the human race. Everyone else is economically useless.

No, that does not follow. For example, a stay-at-home spouse who takes care of the kids may be "economically useless" in a very shallow sense (i.e. they do not appear in GDP figures), but that does not make them useless.

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[–] tyfon link

In Norway, staying at home with kids and managing the house is counted as work and you get "pension points" for it just like a regular job.

But they do not appear in the GDP figures of course.

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[–] wongarsu link

I think you are overestimating a bit: killing the government employees would reduce GDP. The government may not directly produce GDP, but it is essential for providing the conditions for business. Simply cutting away the peaceful enforcement of contracts and peaceful settlement of disputes privided by the government (two major purposes of the courts and police) would have immediate negative consequences. Within a few years you would also feel the consequences of nobody planning, building and maintaining infrastructure, or collecting the taxes to do so.

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[–] robbiep link

Even assuming your argument is correct and the world floats on with between 90-70% ‘dead weight’ as you seem to put it, GDP would fall significantly because you have significantly less consumers spending. Not to mention that society would pretty much grind to a halt because all the people doing intangible work that isn’t counted in GDP, like having and looking after children and replenishing our human capital.

We live in an imperfect world, and not everything has a utility function that is measured by headline figures

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[–] keerthiko link

Yeah I think you're forgetting that consumers are a very important part of functioning local, national and global economies. If the only businessman in a farming town runs a grocery store selling the potatoes from one farmer and you killed everyone else off besides that farmer and store owner, that town's GDP will drop to 0 within their lifespan. This can basically be extrapolated to the global level?

Also why should we artificially extend forcing most humans into agency-less drudgery for 60% of their sentient healthy waking hours? I think the sooner we embrace having 15% of the population producing the net economic output and providing the rest of the society with what they need, the faster we can figure out a significantly better and fulfilling society for everyone.

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[–] indymike link

If human life is only valued by economic output, we've failed as a species.

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[–] late2part link

Not a Thanos fan?

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[–] raquo link

There's at-will employment model on one side, and the Japanese Salaryman model on the other side (low vs high loyalty). As usual, the sweet spot is somewhere in between the extremes.

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[–] fabianhjr link

Where in that scale does a coop worker-owner fit?

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[–] vkou link

It depends on how the co-op votes.

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[–] azernik link

Note that, in this case, the workers are getting "a minimum of eight weeks’ pay and other benefits" - this kind of thing is sadly not mandatory, but it probably should be. Companies can suddenly not need a worker as business requirements change, but the entirety of the resulting insecurity and switching cost should not fall on the worker.

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[–] pavelrub link

What would be the rationale behind that? This clearly places limitations on a company's ability to optimize for achieving its goals, and ultimately stifles innovation. At the very least the long term impact of those downsides needs to be incorporated into any sort of social calculus. Would you prefer to live in a world without Teslas or SpaceXs, as long as employees are "taken care" of by their companies? This isn't necessarily even a false dilemma - it's entirely conceivable that certain ventures would require some kind of a layoffs strategy in order to be successful. Nor is it indicative of anything being wrong with "the state of the company" as you claim, unless you define it as such.

I find it entirely unconvincing that optimizing for "employee care" is overall more beneficial to humanity, including for the long term well being of the exact same employees and their families, than the alternative.

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[–] a-saleh link

Well, there are social contracts, and if you violate them, there are repercussions.

There are many social contracts tied to the word 'employee'. Expectation of livable vage. Expectation of stability. I liked the way patio11 once explained it (I think, and definitely am paraphrasing): "If you employ people and business is good, you get all of the profits and only owe them their wage. If business is bad, you still owe them their wage."

I am concerned that many companies are trying to weasel out of this unspoken contract. I remember McDonalds document specifying that they assume their employees have second jobs. Or that many game companies fire their QA teams every time a game is shipped.

Like, I get the incentive, I just don't like it.

To be honest, I wouldn't miss Tesla or Space X if it turns out they can't manage their employees.

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[–] sokoloff link

You absolutely owe them their wage for the time they worked. You don't owe them their job and wage for an indefinite amount of time going forward.

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[–] Dylan16807 link

> There are many social contracts tied to the word 'employee'. Expectation of livable vage. Expectation of stability.

If you fire 10% of your staff every 3 or 4 years, plus 1% the other years, that means the average employee has decades of job stability. That's probably enough.

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[–] Retric link

SpaceX could quickly shrink by 10% via attrition and not highering new people. They can get rid of dead weight by firing people.

This kind of small scale lay-off is mostly a stunt, or just sign of incompetence.

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[–] ben_w link

Downsizing via attrition means your losses are focused on those with both desire and ability to work elsewhere, and so you keep those who can’t or don’t want to.

“Don’t want to leave” is good, “can’t get hired anywhere else” is bad, and the presence of the latter makes it more desirable to leave even places which used to be fun.

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[–] Retric link

That’s another way of saying incompetence.

If you want to roll the dice on a new employee then fire the old one. This kind of 10% cut results in losing your best who don’t wait around and just start looking on day one. Worse, they often leave after your round of cuts as getting an offer is outside of your timeframe.

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[–] TheSwordsman link

What's the current SpaceX attrition rate like, and how does that change across different organizations? It could be a response to their attempt to gain additional funding, and something they heard or agreed to for said funding. Speculation, but wouldn't surprise me.

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[–] Retric link

SpaceX does not make that public. Best number I saw was 50% of new employees made it to 18 months suggesting rather high annual turnover. Long hours + low pay really add up.

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[–] undefined link
[deleted]

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[–] TheOtherHobbes link

Why would it "stifle innovation"? Having to run a company sustainably should promote innovation.

It may stifle impractical get-rich-quick strategies and customer scamming, but that's not a bad thing.

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[–] breatheoften link

This is very true - a huge amount of 'business strategy innovation' centers not around how to find better product-market fit or how to efficiently produce excellent products but on how best to game predictable trends to funnel benefits of resource collection/human effort at scale into a smaller number of hands (owners, management and the biggest/earliest investors).

The idea that upside potential of an organization's efforts can/should never make it into the workforce and the effort to ensure that it remain this way is extremely sad and corrupting and makes for a world where misaligned incentives and exploitation are much more likely than they 'should' be.

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[–] pavelrub link

Because it removes degrees of freedom. If there are N ways to achieve goal X, and some of those ways include layoffs, then removing those ways from the space of possible strategies will reduce the probability of companies achieving X.

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[–] pbhjpbhj link

Your analysis is incomplete.

Some of the ways to achieve goal X are via layoffs, some aren't. You cut some possible routes to X, but you add more routes.

Not all routes are equal. Cutting a particular employee might mean that a vital convergent point is no longer possible to enter, meaning all routes now lead to failure.

Some of the optimal routes to X may require that management get paid a fair wage (rather than 40+ times the median), and that they reconfigure the company to enable them to keep all employees - everyone gets hours cut by half-a-day, say.

TL;DR - in short you're committing petitio principii, assuming the best way is layoffs, and thus concluding the best way can't be taken without layoffs.

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[–] pavelrub link

Not at all. The only observation I'm making is that {ways without layoffs} ⊆ {ways without layoffs} U {ways with layoffs}. Everything you can do in a universe where layoffs are outlawed you can also do in a universe where they aren't. The difference is that in the former universe you have less options, and therefore less paths to success. None of that means or implies that layoffs are always the "best" option.

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[–] pbhjpbhj link

>Everything you can do [...] //

It's not necessary that the number of actual paths available is reduced by the imposition of "no layoffs", it can actually be increased. It seems counter logical. A restriction can lead to greater innovation that is stimulated by the restriction, there were I'd warrant far more places to get an alcoholic drink under prohibition than prior to its institution.

>you have less options, and therefore less paths to success //

A priori it seems right, but the successful paths aren't randomly distributed; perhaps there is a key employee who leaves under layoffs and the business fails (another business succeeding).

You can apply basic set theory to chaotic and complex psycho-temporal interactions.

But I agree, as I think you surmise, that we can't simplistically mathematically impute the "best" route will be with(|out) layoffs.

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[–] thefounder link

>> Would you prefer to live in a world without Teslas or SpaceXs...

Such world exists and can be found in most socialist countries. It's not bad per see but not that exciting either. I personally believe the workers should be given more opportunities(i.e advance notice so that they can find another job in a timely manner) rather than social care.

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[–] Rainymood link

>laid off anytime for arbitrary reasons.

You can also leave for any arbitrary reason, anything else is slavery, simply put. This goes both ways.

>If you create a company, you take care of it and all of its members.

If you create a company, you have a fiduciary duty towards your shareholders. A company only exist when it is profitable (either now or in the future) and it can only continue to exist if it can do so profitably. Companies don't exist to "take care of its members", those are what unions are for ... oh ... wait ...

>Will the 10% of the employees be the ones who are already in the less comfortable financial and social situation in their private life ?

How is this even relevant? You provide a service to the company and they pay you for it, they can decide not to do business with you and vice versa. Empathy has little to no place in business, unless it generates more profit of course.

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[–] adwn link

> You can also leave for any arbitrary reason, anything else is slavery, simply put.

Being a slave entails more than just having to fulfill your voluntarily agreed-to, contractual obligations. Using the term "slavery" for this trivializes actual slavery – i.e., ownership over a human being.

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[–] benjaminsuch link

"...anything else is slavery" What?

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[–] Rainymood link

If you are in any non-voluntary way forced to stay with the company and you can't leave. For example foreign workers that do labour intensive work where their housing is being taken care of by the employer in an exploitative way, they can't quit working because their employer is in charge of their housing, etc.

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[–] austenallred link

That sounds like a fantastic way to make it too risky to ever hire anyone

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[–] mkio link

In Germany you see things like a single person having to do all jobs at once at a Pizza Hut or only three people working at the same time in a supermarket. A lot of customer-facing businesses are insanely understaffed. If your employer doesn't hire enough coworkers for whatever reason, your life will be miserable.

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[–] jononor link

Isnt there a maximum average hours of work around 40 a week in Germany?

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[–] wongarsu link

Yes, with a few exceptions it's restricted to a maximum of 8 hours a day on average (and 10 hours max), with 5 days a week.

However, how much stress you can be exposed to in those 8 hours isn't mandated. You can run many businesses understaffed with fairly little impact if you are willing to regularly replace employees suffering from burnout [1]

1: https://en.wikipedia.org/wiki/Occupational_burnout

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[–] ben_w link

Sounds about right. EU Working Time Directive is something like 40 or 48, but my German isn’t good enough to read German law.

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[–] marcoperaza link

Freedom to fire enhances the willingness to hire. There’s a balance to be found, but if you make it impossible to get rid of employees you no longer want, you end up with an anemic labor market, like Europe’s.

Barriers to firing also make it harder to justify hiring higher-risk candidates (e.g. former felons, high school dropouts).

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[–] anticensor link

Hard-to-fire markets also have necessary laws to promote hiring former felons, old age and disabilities.

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[–] vasco link

What about when people get comfortable and stop performing at initial levels. Or if you realize you have too much middle management?

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[–] skrebbel link

Yeah, comfortable employees, we shouldn't have that.

At my company I ensure that everyone is always borderline burned out!

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[–] unethical_ban link

I think you're missing the point, with or without intention.

"Comfortable" doesn't mean that they have a nice house and are happy with their life at work. Comfortable in this context means they no longer have any concern about their own job performance, knowing they have a "sure thing" and underperform in their duties.

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[–] skrebbel link

Good point. But I wasn't responding to the GGP's central argument, only to the implication that it's bad when employees get too comfortable.

In particular, I'm ranting against the use of the word "comfortable" for describing unmotivated/shitty employees. It's perfectly achievable to have a company that consists of people who are motivated, comfortable, and extremely productive.

It's a ridiculous Americanism that the only way to motivate employees is by making them "uncomfortable" (eg through fear of losing their jobs, like your example, or through other means).

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[–] jononor link

What is the source for higher standard of living in US compared to Europe? In most of the indexes I have seen, some European countries are ahead of the US, and some are behind. Countries previously in the Soviet union are still lagging compared to western and northern europe.

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[–] SamReidHughes link

Well, there's a reason America has a higher standard of living than Europe.

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[–] pbhjpbhj link

People in USA [I assume you mean] are happier and more fulfilled than those living in Europe?

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[–] SamReidHughes link

The median American is richer than the median European (in basically any large country).

The SpaceX employees that got laid off are going to get other jobs and continue making more money and having more money to spend than their European counterparts.

Edit: A few reasons. One is that, since it's easier to switch jobs, good employees have more leverage. Another is that, since it's easier to fire bad employees, the expected value of a new employee is higher and you can afford to pay them more.

I think a big part of American prosperity is a result of companies being able to fire people. It's probably the most important bit of employment non-regulation that this country has, and it's a big aspect in which America is more worker-friendly than European countries. Other missing regulations, like working hours limits, vacation time regulations, don't benefit workers as much (or at all).

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[–] ben_w link

Standards of living is complex, more of a vector field than a single scalar.

“Western” Europe is on average rich, Eastern Europe is still recovering from Soviet control and brain-drain. But even Western Europe is spikey, old Welsh coal-mining towns are poor, the old universities are rich.

Even apart from the location income variability, what money gets you varies; health costs much less in the UK than the USA, housing is cheaper in poor places than rich places — even PPP exchange rates aren’t perfect because the ratio of two different goods isn’t constant.

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[–] jack_h link

> Comfortable in this context means they no longer have any concern about their own job performance, knowing they have a "sure thing" and underperform in their duties.

There might be multiple things going on here though. While I'm sure there are people who will settle into a job and underperform because they are virtually guaranteed their position, I'm guessing there are a lot more people in a situation where compensation isn't even matching inflation/CoL. In the latter situation the employee may just not care since the company doesn't care enough to compensate them 'fairly'. Depending on a lot of factors it may be difficult for them to find a new job somewhere else, so outwardly it might look like they're just 'comfortable' and underperforming.

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[–] _ph_ link

If single employees fail to perform, they should eventually be let go - idealy after given the opportunity to fix their performance.

The cancellation of a major project also might make a whole department obsolete.

But a blanket lay-off of 10% of the work force for a company which claims to be healthy, that is quite employee-unfriendly.

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[–] undefined link
[deleted]

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[–] Klover link

If your employees are performing worse than initially, then what are you paying them training for? And getting more comfortable in their position should usually reduce friction around their job and have more experience, so they can do their job better..

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[–] kgwgk link

Employees can also leave at anytime for arbitrary reasons.

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[–] johnchristopher link

Employees rarely leave for "arbitrary" reasons.

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[–] SerialOwl link

When I left my previous employer, the reason was absolutely arbitrary. The new one paid more. I didn't have to wait for the old company to not pay me the agreed upon salary, spend months offering them a "compensation improvement plan", and documenting their failure to follow it in fear that they might sue me for leaving for the "wrong" reason. It's amazing how people pretend at-will employment is somehow equal for both sides when only employees can actually terminate the employment at-will.

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[–] johnchristopher link

> When I left my previous employer, the reason was absolutely arbitrary. The new one paid more.

That is literally the inverse of what arbitrary means:

existing or coming about seemingly at random or by chance or as a capricious and unreasonable act of will

Now:

> I didn't have to wait for the old company to not pay me the agreed upon salary, spend months offering them a "compensation improvement plan", and documenting their failure to follow it in fear that they might sue me for leaving for the "wrong" reason. It's amazing how people pretend at-will employment is somehow equal for both sides when only employees can actually terminate the employment at-will.

Where I live you have (it's the law) to keep on working (and being paid for that work) for a certain number of weeks (depending on how long you have been working at that company). So the company can find a replacement, so you can wrap up things and pave the way for the transition. It's not rare that you can come up with an agreement that let you do that from home (because you are leaving on bad terms) or that the employee takes his vacant days or extra hours to fill up that period.

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[–] kgwgk link

b : based on or determined by individual preference or convenience rather than by necessity or the intrinsic nature of something

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[–] johnchristopher link

I say "leaving previous employer because the new one paid more" is not an individual preference or convenient but the intrinsic nature of the decision. Maybe even motivated by necessity if more money was needed.

It's not like he chose the new company because the logo is red.

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[–] kgwgk link

Employers rarely fire people for arbitrary reasons, then.

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[–] johnchristopher link

If by arbitrary reasons you mean a not random reason like "they cost too much" then they do it all the time.

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[–] kgwgk link

I'm sorry, I don't understand.

Do you think that "they cost too much" is an "arbitrary" reason? Or is it the "intrinsic nature of the decision" like in the "I leave because they pay me more elsewehere" case?

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[–] matz1 link

Because it's also suck to not able to fire your employee for any reason.

A company purpose is to make money, not to take care its member. Its the government job to take care of its citizen. Using basic income, universal health care, cheap/free housing, etc.

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[–] techsin101 link

Doing that would make hiring very risky. And interviews would be a year long

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[–] nothrabannosir link

Technically isn’t that what probation is? A very long interview?

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[–] Findeton link

You're also hired for arbitrary reasons, so that makes it even.

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[–] alan-crowe link

There is a bigger picture in which employers intermediate between producers and consumers. As a consumer, you are free to shop around. You bought a Ford, but perhaps next time you buy a Honda. If the government is really serious about saying that Ford cannot lay off workers, the government has to help. For example, by introducing a tax on importing Hondas.

In the big picture, your job security as a producer trades-off against your right to be a disloyal consumer.

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[–] kerbalspacepro link

>If you create a company, you take care of it and all of its members.

No. A company doesn't have members, it has employees. Americans should know by now that a company has no loyalty to them and they should have no loyalty to the company. If they don't know this, it is their fault for being naive (or a Boomer).

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[–] twodave link

So companies should be required to keep their low-performers indefinitely? That sounds like a recipe for getting 100% of your work force laid off to me... of course we don’t know the motive behind the layoffs so I guess we are both making some assumptions.

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[–] Erlich_Bachman link

The point of a properly functioning capitalistic system is not that every employe will stay at the same company for the longest time possible. It is to have liquid labor force markets, which will make sure that both the companies can obtain (and replace when needed) the employees that match the company perfectly - and at the same time that every employee will easily find (and change when needed!) a matching workplace, one that best suits their (possibly continuously evolving) trade skills, ambitions, life circumstances, risk appetites etc.

Also,

> laid off anytime for arbitrary reasons

They are not arbitrary by any stretch of the meaning of that word. There are business reasons, changed or evolved business goals or market conditions. Those are all real objective phenomena which play very important role in the life of a company, ignoring which would be very fundamentally detrimental for companies and for markets in general.

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[–] douglaswlance link

Cutting top performers would result in disincentives that would reduce overall profitability.

They cut the bottom 10% of weak performers because they weren't up to the standard.

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[–] thefounder link

Unless the said companies are funded by government I don't understand why there would be a problem. As a CEO your job is to maximize the profit not to create a socialist enterprise. Why should I pay you if I no longer need your services? That being said I believe things could be done to make the transition easier for workers without hurting the company. For example announcing the layoffs in advance(i.e give a 4 months notice at least). This should be enough so that the workers can find another job.

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[–] tasssko link

The problem here is you said I. Personally if anyone in my company fires someone because “I no longer need your services” will be fired for hiring someone permanent that needed firing. Also if they follow our hiring criteria we want them in other places. This across the board lay-off is a sign of some kind of corporate correction. My advice is to think of it that the people you manage work for the company not for you. Correction: you don’t need advice.

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[–] sokoloff link

If you fire a permanent hire for doing that, presumably you then also need firing for making a permanent hire that needed firing...

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[–] tasssko link

Well done ...

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[–] totallybro link

totally, bro...

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[–] tanilama link

It is not exclusionary. By capitalist logic, a company grows because it makes profit from the market, if a company can't do that or lose its source of investment, it needs to shrink or disappear. What you describe is more like a political entity, where the leader is elected and responsible for the welfare of his/her electorate, and if he/she fails to perform, he/she will get booted out. But that is not a company.

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[–] nullifidian link

>If you create a company, you take care of it and all of its members.

Companies are not created to take care of their employees. They are created to make profit and/or accomplish a societal goal. If a company is non-profit then it's just the latter.

As someone from a post-communist state, it's plainly obvious to me that people on average don't work as well as they could if the threat of termination does not exist. My parents told me anecdotes about their coworkers who were reading books on the job, even playing videogames, and that's in an aero-space design bureau in the 80ies, in less elite organizations systematic alcohol consumption by groups of employees on the job was not something to be surpised by. And that pattern repeats itself in many countries where employment is semi-guaranteed.

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[–] wolco link

The threat of randomly being fired will cause many focused workers to change how they act. They stop trying to help each other, blame increases and internal politics dominates.

If this continues the remaining employees try to hire new employees with a fatal flaw so when the next wave comes they will be the first out.

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[–] nullifidian link

I'm not saying that N% layoff is a necessarily a good practice. My main objection was to the notion that companies are created to take care of the employees. To me it's the role of the state to take care of the people, the companies are here to be efficient for eveyone's benefit.

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[–] drieddust link

Termination due to non-performance on the job is entirely different from at will termination which can hit a performer and non performer alike.

You seems to imply employees are the resources to be used to achieve goals. I do not see an issue in this arrangement if Employees have the same negotiation power as the employer.

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[–] nullifidian link

>Termination due to non-performance on the job is entirely different from at will termination which can hit a performer and non performer alike.

Termination due to non-performance can also hit a performer. Human beigns and hence their social systems are not perfect. N% layoff is performance related termination, because it's an impossibility that all employees pefrorm at the same level, are of the same value to the company. It's absurd to imply that N% layoff is absolutely random, that companies use lottery techniques to choose who to fire next.

>You seems to imply employees are the resources to be used to achieve goals.

They are. Within the constrains of culture and law.

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[–] drieddust link

> Termination due to non-performance can also hit a performer.

If everyone is meeting the success criteria, then still trying to fire lower 10% is Darwinian view of the world. This also means objective enough criteria exists to judge the poor performers. In reality, that guy in the corner with his head down get fired because he is too busy to make connections and show how valuable he is.

This specific case seems harsher because a lot of these people assembled under Mr. Musk's banner because they thought they were working for a cause. I am sure many of them have took paycuts, toiled above and beyond expectations because they thought they were working for a cause. In my view this is not a fair at all.

> They are. Within the constrains of culture and law.

Agreed but every lawful and culturally acceptable things are not right necessarily.

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[–] dwd link

Equal negotiating power generally implies employees unionising or having some form of collective bargaining that allows to right to strike.

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[–] mpweiher link

> Companies are not created to take care of their employees.

Says who?

Societies create the conditions under which companies are allowed to exist, therefore societies get to define what responsibilities companies have.

Also, who says that the right of the company to exist >> the rights of the employees?

Not allowing companies to easily shed workers is a way of putting extra fitness pressure on companies, meaning the less fit companies perish and the fitter companies thrive. This is of benefit to society. See Schumpeter, Creative Destruction:

https://en.wikipedia.org/wiki/Creative_destruction

You will note that some of the most highly efficient/competitive economies have pretty strong worker rights. Of course there has to be a balance, excesses in either direction are usually not good. However, in this particular case I don't think any of these SpaceX employees were systematically drunk on the job, or playing videogames instead of working.

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[–] raverbashing link

That's just being idealistic.

Why would someone ever hire if they wouldn't be able to terminate the contract if it's ever needed? And this goes both ways, I do want to be able to quit (with a "short" notice)

Other answers gave plenty of good reasons: employees underperform, projects change, companies close, etc

It's a job, not a marriage, and even those are becoming shorter.

Note I'm not proposing "at-will" employment, I don't think that is good as well (even if employers like it, I don't think it's good for overall labour relations)

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[–] alkonaut link

There are placees where termination for arbitrary reasons doesn’t exist (see e.g Sweden). Those economies still seem competitive.

If you lay off 10% because times are worse and there is less work, then interestingly you are more or less required to re-hire the same people when you hire again (typically that would be negotiated so you’d buy them out instead).

The 10% you fire also has to be the 10% last hired, you can’t fire the 10% worst performing (again, this can be negotiated so firing an older underperforming hire quickly becomes very expensive - think 1-2 years salary or similar)

Is this perfect? No. But it makes employers think hard about hiring for better or worse, and it means you plan far ahead to ensure you have enough work in bad times, and don’t go on a hiring spree in good times.

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[–] nullifidian link

>arbitrary reasons doesn’t exist (see e.g Sweden)

It's important to note that these countries (Sweden, Japan) with higher employee protections and guarantees are very different in terms of culture from the hyper-individualistic US.

https://en.wikipedia.org/wiki/Law_of_Jante <- basically an invese of the American culture

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[–] raverbashing link

> see e.g Sweden). Those economies still seem competitive.

That's what you get when you have a high qualified and restricted (in numbers) workforce. But let's see if it keeps being that way or it goes the way of France and Italy

(So how's that idealistic view working out in their real estate market again?)

Again, it's a job, not a marriage. Some stability and regulation is welcome, sure, but jobs for life don't exist anymore.

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[–] antpls link

I don't understand how anyone in the world accept such social contract of being laid off anytime for arbitrary reasons.

If you create a company, you take care of it and all of its members. If you have to cut expenses because the company needs to be "leaner" then you cut the salaries starting from the top executives. Eventually you fire management, because the state of the company is in part the result of their decisions in the long-run.

Will the 10% of the employees be the ones who are already in the less comfortable financial and social situation in their private life ?

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[–] jameslk link

SpaceX is not a tech company. Aerospace/defense contractor companies have frequent layoffs. Usually this occurs when one of these companies don't win a contract or new regulations cut back on defense/space programs.

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[–] rhizome link

Maybe it's doing double duty to sniff out exfiltrators.

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[–] viraptor link

> We had an all hands meeting and were told to go home and wait for an email that basically says we stay or go. (from reddit post)

I'm surprised about that idea. At that size I expected them to follow "your account is locked immediately before you're told" policy. Guaranteeing people have access to company emails over the weekend and are told they're fired, sounds like a bad idea for IT to deal with.

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[–] throwaway4DFe5 link

i've done a lot of contract work for spacex. imo i think part of the reason they work so much is because they have no formal methods group. everyone seems to solve similar problems in slightly different ways instead of having a vetted and documented 'right' way to approach certain things. i've literally been paid to write code that does the same thing for different groups in slightly different ways. having done a lot of aerospace contracting, this is atypical from what i've seen elsewhere. my point is that if they formed a methods group to formalize and standardize across the entire org they might be fine with a 10% cut if they're not duplicating efforts all over the place.

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[–] tomp link

Can you comment on this from the perspective of how the method works, as in the results it produces and why, as opposed to whether it's standard/common or not? To me, SpaceX is remarkable because they've done what the rest of the world failed to do for 20 years. That's of course a combination of factors - vision, drive, start-up mentality - but are their actual processes/development methods also in any way better than in traditional space companies?

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[–] buchanan link

Appreciate if you can provide an anecdata: those you’ve worked with should have no problems landing another job? Just trying to get a feel of whether this will be a minor or major stress event for those fired.

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[–] erikpukinskis link

Email elon@spacex.com and suggest it.

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[–] amelius link

No, they'll keep firing people until there's only one guy left who's sole job it is to push a button to initiate a rocket-launch.

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[–] bsmitty5000 link

Taken straight from the ULA playbook!

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[–] Rebelgecko link

From what I've heard from the SpaceX and ULA people I know (although there may be some sample bias because most of the SpaceX people I know quit due to the hours), that's not really the case. ULA is more of a 9-5 company, especially for union folks, whereas SpaceX is more of a 60-80 hours/week kind of place.

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[–] bsmitty5000 link

that's true, but during & after their layoffs a couple years back they imposed a 'not mandatory but strongly encouraged' 20% overtime.

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[–] undefined link
[deleted]

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[–] seppin link

and 5% of them will quit in the next 2 months

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[–] decebalus1 link

That's usually what happens basically everywhere. I 'survived' multiple rounds of layoffs and they always touch stuff that's deemed 'unnecessary' but needs to be kept alive and thus adding to the workload of already overworked employees.

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[–] rabbitonrails link

Or 10% of their employees were doing nothing.

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[–] Rebelgecko link

Sounds like 90% of their employees will be working an extra 10% more hours per week

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[–] cvakang link

IMHO, If I could guess announcing it all employees tells that you all are expendable. If you are doing that is not important for the company. You could be sent home forever. Gives a sense to everyone to pull up their shocks. Two days to think about your short commings

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[–] bredren link

It is a good thing SpaceX has kept private. This is a category that does not seem like the company would be better off public.

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[–] GeorgeTirebiter link

When you lay people off en-mass, that's a Management Error. I'm surprised nobody here has yet mentioned this fact yet.

Laying off (firing) individuals; or, if a change in strategic direction, laying off entire groups -- that's business.

But 'doing a Jack Welsh' -- that's Poor Management. I can only imagine that Bezos and Branson and ULA will be able to pick up some great employees.

And as for 'cutting the low performers' -- in my many years in industry, I've only seen this happen once. Every other person was 'let go' due to 'political' reasons.

My major point: This move signifies a colossal management fail. I'm looking at you, Elon.

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[–] DanCarvajal link

The asked cooperate lenders for $500M at the end of last year and most of the big guys balked when they looked at the books, only raised $273.

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[–] manicdee link

They recently switched from composite hull to metal hill for BFR/Starship, so it might be a case of terminating those employees whose primary focus was designing the composite hull and whose skills were not transferable. There will likely be talent pools that get thinned out too, welders who won’t be so necessary now that Block 5 is in production and Falcon Heavy is “operational” (meaning fewer expendable launches, less demand for welders to build new rockets).

It doesn’t help that there’s been little warning (though I guessing a lot of these employees had some warning that they are going ormtheir teams are getting thinned).

I hope for the best, the people leaving SpaceX have certainly got great resumes to recommend them to new employers!

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[–] shaklee3 link

Falcon heavy is anything but operational. It has yet to prove itself and launch real payloads.

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[–] manicdee link

It has flown actual hardware and launched a functional payload, making it operational.

Just because you don’t consider a 2t payload launched to a Mars-crossing orbit to be “real” doesn’t mean the payload wasn’t launched.

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[–] adventured link

It's because projections for large launch demand are softer for the next few years than had previously been expected. It was thought that that weakness would give way and demand would perk back up. This layoff is happening because that's no longer expected to happen and they're not going to need the staff to match a much greater launch rate.

What does it mean? It more or less officially confirms that Starlink is the only way they can finance the plans for Mars and BFR. There isn't going to be a huge uptick in launches in the coming years, such that that will be enough to dent their capital requirements. Musk has been attempting to finance some of SpaceX's capital demands with debt recently to avoid further diluting his stake, because it risks pushing him below a controlling interest. It's very questionable whether he'll be able to hold the line on that if the launch rate is going to remain fairly stagnant versus 2018.

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[–] Robotbeat link

I suspect that Starlink is, in fact, a significant CAUSE of the softening of GTO launch demand. All this LEO megaconstellations will be providing many of the same services as these long-lived, expensive geosynchronous birds, so the business case for them becomes much less certain.

If Starlink, OneWeb, etc were cancelled tomorrow, it's likely GTO launch demand would pick back up significantly.

Starlink is both the cause of and solution to this problem.

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[–] azernik link

It's a game theory problem - even if Starlink wasn't happening, OneWeb would be going ahead anyway. So if the GEO satellite operators are going to be running scared anyway, SpaceX might as well get its own entrant into the market.

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[–] someperson link

I don't think this argument holds up to analysis. According to the OneWeb and Starlink Wikipedia pages:

1. May 2014: OneWeb (formerly 'WorldVu') receives its initial $500 million in funding [1]

2. January 2015: SpaceX's satellite constellation is announced. [2]

3. December 2016: OneWeb receives an extra $1.2 billion from SoftBank and existing investors [3]

4. March 2017: Blue Origin signs OneWeb as a customer [4]

If SpaceX was a neutral transport provider, there's little reason that OneWeb would have chosen Blue Origin over SpaceX. Blue Origin is probably offering very low prices, but SpaceX arguably could match them.

[1] https://spacenews.com/40736google-backed-global-broadband-ve...

[2] http://old.seattletimes.com/html/businesstechnology/20254807...

[3] http://fortune.com/2016/12/19/softbank-oneweb/

[4] https://spacenews.com/blue-origin-gets-oneweb-as-second-new-...

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[–] azernik link

I meant - no reason not to get that market share in the small-comsat market.

As to why do it themselves as opposed to just be a provider to OneWeb, I think this is a sneaky way to do some price discrimination - SpaceX, like everyone else, may have some spare launch capacity, so having an internal (hopefully-profitable) project to soak up that demand rather than cratering launch prices may be worth it.

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[–] x2f10 link

Not that this necessarily disputes what you're alluding to, but this is not unusual for Elon: https://www.businessinsider.com/tesla-to-layoff-up-to-9-of-i...

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[–] aesopsfable link

it definitely feels like a bad (possibly financial) sign when it is about laying off some percent of workforce vs closing down a division...

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[–] Others link

Is this a bad sign for SpaceX? Is ‘getting leaner’ why they’re really doing this?

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[–] mcs5280 link

I think their headcount surprises a lot of people. SpaceX has gotten very big over the past few years trying to carve out market share and evolve F9. The old incumbent competition (ULA) has around 3500 employees. Part of the difference in headcount is likely because SpaceX does a lot more in-house manufacturing, but still it seems like a large differential.

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[–] arthurcolle link

The article cites "at least 7,000" actually.

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[–] jiveturkey link

It currently says:

> SpaceX, citing a need to get “leaner,” said Friday it will lay off more than 10% of its roughly 6,000 employees.

And no further mention of number of employees. Perhaps a previous edit had a typo.

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[–] sabertoothed link

You sure?

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[–] arthurcolle link

Literally from the article:

> The company employed at least 7,000 people in late 2017 when COO Gwynne Shotwell last gave a number — which means around 700 will lose their jobs.

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[–] sdinsn link

I don't know what article you are reading, but that line isn't in it. This one is though:

> SpaceX, citing a need to get “leaner,” said Friday it will lay off more than 10% of its roughly 6,000 employees.

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[–] arthurcolle link

My mistake.

I somehow had another article on the same topic open, from TechCrunch.

https://techcrunch.com/2019/01/11/spacex-will-lay-off-hundre...

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[–] mpg33 link

Had no idea they had 6000 employees..

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[–] niciliketo link

Sorry for the people that are affected. Space X has achieved some incredible things. Redundancy can give you the freedom to try something new.

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[–] vonseel link

Should be top comment!!!

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[–] joecool1029 link

To get around paywall: https://outline.com/Ewv9xM

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[–] reasonablemann link

Reminiscent of Goldman's annual 'culling' https://www.google.com/search?q=Goldman+Sachs+staf+culling

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[–] carlio link

Alternative source for those without access to the LA Times. https://www.cnn.com/2019/01/11/tech/spacex-layoffs/index.htm...

I'm still skeptical of Starlink but I hope this all works out.

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[–] joelthelion link

To me the main question is, can they maintain a high level of quality while laying off people?

I've seen this first hand in my own company since they started laying off people on a regular basis. People try hard to keep things working, but quality inevitably degrades over time. In most areas, it's not necessarily obvious. In rocket engineering, on the other hand...

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[–] undefined link
[deleted]

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[–] bsaul link

Since there seems to be various personal preferences on the best way to fire people i wonder if any companies ask « if we should fire you, how would you like it to be done ? » at hiring time.

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[–] datahipster link

If you're affected by this and would love to work on a dedicated team developing spacecraft orbit simulation software, my company is hiring. Please send me an e-mail at stefan.novak@ai-solutions.com.

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[–] azatris link

If what SpaceX is doing aligns with my values very well, but I live in Europe as a software engineer, how could I help the goals of this private company? Is it even possible?

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[–] NoblePublius link

This is what any good big company does every two or three years. Rank order. Dismiss bottom decile. Thank you, Jack Welch.

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[–] ChrisSD link

I always assumed they were just making a point. I'm not sure what that point was but I guess they consider it made.

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[–] phendrenad2 link

They probably realized that they'll still get GDPR requests from EU citizens living abroad, so the block was fairly pointless.

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[–] azernik link

This is a false reading of GDPR - it applies only when either the person or the business involved is physically in the EU, not on the citizenship of the person involved.

See Article 3: Territorial Scope (https://gdpr-info.eu/art-3-gdpr/). Useful terms: "data subject" is a natural person to whom the data relates, "processor" refers to an entity that works with the data, "controller" to an entity that "owns" the data. e.g. you would be a data subject, the LA Times would be the controller, and Google Analytics would be a data processor.

==================================

1. This Regulation applies to the processing of personal data in the context of the activities of an establishment of a controller or a processor in the Union, regardless of whether the processing takes place in the Union or not.

2. This Regulation applies to the processing of personal data of data subjects who are in the Union by a controller or processor not established in the Union, where the processing activities are related to: a) the offering of goods or services, irrespective of whether a payment of the data subject is required, to such data subjects in the Union; or b) the monitoring of their behaviour as far as their behaviour takes place within the Union.

3. This Regulation applies to the processing of personal data by a controller not established in the Union, but in a place where Member State law applies by virtue of public international law.

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[–] phendrenad2 link

Ah, thanks, I must have gotten that in the early days of the GDPR, when there was a lot of misinformation.

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[–] w-m link

Oh, the LA Times seem to finally have taken down their GDPR wall. This is the first article on their domain that I’m able to read since last May, from Europe.

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[–] Reason077 link

Tesla did roughly the same thing in June 2018. Then went on to have a blockbuster quarter in Q4.

https://electrek.co/2018/06/12/tesla-layoffs-workforce-restr...

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[–] hackbinary link

Seems to me they have plenty of vacancies[1]. It seems to me that these announcements can just be smoke and mirrors.

[1] https://www.spacex.com/careers/list

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[–] moajday link

Downsizing is a norm. All the 10% will find 100% better jobs. Good luck!

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[–] TimesOldRoman link

Checking in. I'll be back with a refreshed resume in the morning.

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[–] pulkitanand link

Mathematically, never. :)

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[–] dorkwood link

How many more 10% layoffs until they’re down to just 1 employee?

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[–] undefined link
[deleted]

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[–] rabbitonrails link

This should be great for the share price. No joke -- cut the fat.

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[–] choonway link

maybe this has something to do with abandoning carbon fibre / heat resistant tiles with stainless steel?

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[–] undefined link
[deleted]

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[–] 33a link

I'm just glad they did this before all those people were on mars.

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[–] pokerwe1 link

Surprise just for you http://wishmindr.com/list/4dvh#.XDB3syS-FEo

WA. +855978543082

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[–] Proven link

Too bad the remaining 90% will continue to live off the US taxpayer and enjoy government largesse for the foreseeable future.

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[–] jpgvm link

Unpopular opinion but I'm a fan of this. In the Tesla case they mostly cut deadweight from the Solarcity acquisition and the resultant company has performed better for it.

If you don't have a firing heavy culture sometimes this is the only reasonable way to lean teams up again and ensure your best team members are not dragged down by mediocrity.

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[–] undefined link
[deleted]

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