Tell HN: Confluent laying off 8% of staff

I really get the feeling that many companies are just blindly doing whatever other companies do. One starts large layoffs, and suddenly everybody is doing it. At other times, when one goes on a hiring spree, they all go. One tries to reduce salaries, they all do. One pays enormous bonuses, and they all do. It's like CEOs aren't really thinking for themselves, just copying whatever the market does.

Oh my sweet summer child....<p>As someone who lived through the .COM crash and implosion and then 2008, any company with &quot;strong cash reserves&quot; and &quot;trajectory to profitability&quot; is not making more money than they are spending. They are, to use the SV term - losing runway. This is catastrophic because it&#x27;s infeasible to raise money right now to extend the runway. If the plane is not airborne (making significantly more money than they are consuming) by the end of the runway, they crash and burn, taking themselves and the company&#x27;s investors with them.<p>My experience has been highly capitalized, but running way in the red are the worst possible place to hide when a significant economic event occurs. Confluent has raised capital 11 times (from a quick crunchbase article) and has a product that is open source core, giving its customers an escape path.<p>I&#x27;d also point out that this is a bit snowflake. The average annual corporate turnover rate is way higher then this number. If not for the immediacy of the headwinds, almost every company could handle this by simply not rehiring after attrition.

The real question is: does the CEO take full responsibility?

<a href="https:&#x2F;&#x2F;www.mcsweeneys.net&#x2F;articles&#x2F;macroeconomic-changes-have-made-it-impossible-for-me-to-want-to-pay-you" rel="nofollow">https:&#x2F;&#x2F;www.mcsweeneys.net&#x2F;articles&#x2F;macroeconomic-changes-ha...</a>

&gt; The findings of two decades of profitability studies are equivocal: The majority of firms that conduct layoffs do not see improved profitability, whether measured by return on assets, return on equity, or return on sales. Layoffs are especially hard on the performance of companies with a high reliance on R&amp;D, low capital intensity, and high growth. Market response to layoffs was also less positive than might be expected, with three-day share prices of firms conducting layoffs generally neutral. ... Layoffs undertaken only for the purpose of reducing costs tended to lead to drops in share price.<p><a href="https:&#x2F;&#x2F;hbr.org&#x2F;2022&#x2F;12&#x2F;what-companies-still-get-wrong-about-layoffs" rel="nofollow">https:&#x2F;&#x2F;hbr.org&#x2F;2022&#x2F;12&#x2F;what-companies-still-get-wrong-about...</a><p>We need to circulate this information as wide and far as possible. Perhaps at least some well meaning CEOs will grow a backbone to at least challenge the board.

Layoffs signal weakness, from every angle. They hired indiscriminately and now are doing catch and release. Or they lacked foresight of their market. Or they are financially mismanaged. Or they are directed by a unqualified board. Or they are unable to cope with their market shrinking. Or they are a behemoth that grinds up workers as part of their operation (a lot of what we&#x27;re seeing now). Or they&#x27;re jumping off the cliff with the other lemmings. Or they need money for upper management pay.<p>When you&#x27;re looking for a job, keep the companies previous layoffs in mind. Are they stable, or do they acquire and jettison?

Interesting, earlier today an post was made about confluent cli going &quot;open source&quot; and now they&#x27;re doing massive layoffs.<p>Was this an &quot;open-source folks will do it for free anyhow&quot; or someone wanting to save their work from obsolence?<p>(Earlier flagged post) <a href="https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=34527670" rel="nofollow">https:&#x2F;&#x2F;news.ycombinator.com&#x2F;item?id=34527670</a>

We&#x27;re well into the cargo cult layoffs. CEOs need to look good to their bosses and your job is a sacrafice they are willing to make. I&#x27;m sure there are some who will make their decisions based on real data and analysis - but they&#x27;ll make thier decisions independently of other firms actions. Seeing all this clustered behavior suggests little analysis is really being done here.

Not surprising. Every company is going to take the opportunity to trim costs when it doesn&#x27;t affect their PR as much as it would any other time.

There&#x27;s an article about it <a href="https:&#x2F;&#x2F;www.marketscreener.com&#x2F;quote&#x2F;stock&#x2F;CONFLUENT-INC-124047168&#x2F;news&#x2F;Confluent-Message-to-Confluent-Employees-from-Jay-Kreps-Form-8-K-42820152&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.marketscreener.com&#x2F;quote&#x2F;stock&#x2F;CONFLUENT-INC-124...</a>

The optimistic things management says about a company are as empty as a paupers purse. Theyll tell you there are no layoffs planned the moment before they sign your severance package.

DAE feel it all started with Elon laying off half the company without destroying Twitter completely? These other managers must have thought if Elon can lay off half the company , we can atleast do away with like 10% without much negative consequences? Time will tell if such hire and fire will cause unintended consquences. Software as a whole is quite resilient though, you don&#x27;t need much resources to maintain code once it&#x27;s written, creating new features is where skilled individuals are needed. So companies will definitely survive even if they lay off half the company, but the question is will they thrive when opportunity comes knocking again?

If anyone reading this was part of the affected, please DM me. I have an SRE type role open that would almost certainly be a good fit for anyone from eng. Totally remote, good company culture.

Layoffs are like a freebie right now. Everybody is doing it so might as well right? Sad state of affairs.

General rule is that a 10% cut won’t impact business operations. They’ll do cuts like this periodically to get rid of low performers and &#x2F; or people getting paid too much.<p>Goal is to cut costs, projections are likely decreasing &#x2F; stagnant revenue.

Granted, tech companies generally do not have unions. Companies with union agreements, have not been laying off people.<p>I think it&#x27;s silly when companies present the nonsensical rationale of &quot;due to prevailing economic conditions&quot; without qualification. As if these conditions (everyone else is doing it for some reason, so let&#x27;s ride the stock boost) is obvious, decided, and not worth talking about.

The CEOs know their macro. I think it&#x27;s all political. Employment is the last bastion holding this cycle. Low unemployment means the Fed won&#x27;t pivot. A fed that doesn&#x27;t pivot is a fed that&#x27;s in tampering mode which is a money tight environment.<p>I think it&#x27;s gotten to be a game of macro economic manipulation to get to fed to flood the market with lush money again.

Has anyone at an unprofitable company ever been told that they &quot;were NOT on a trajectory to profitability&quot;???<p>I feel like that the statement that you are on a path to breakeven, means absolutely nothing. And that you should ALWAYS consider yourself to be in a high risk situation if your company is losing money.

The whole point of the Fed putting rates up was to cause mass unemployment so workers had no leverage so they&#x27;d accept lower wages and more money would go to capital holders. You can&#x27;t blame CEOs for getting &quot;ahead&quot; on their Todo list...

I think it&#x27;s all about cashflow. Salaries are the biggest cost to cashflow and 2023 is not going to be all roses, there will be more bad news at some point. A shrewd business reduces operating costs before the storm hits.

I am actually pondering on accepting an offer from Confluent. It&#x27;s still an active offer... after this layoff would you say my new job is safer? Or would that just mean I&#x27;m probably next up to be laid off?

A lot of companies do this just as a matter of course. They call it &quot;trimming the fat&quot;, eg, laying off the bottom 5%, 10% or whatever percent of employees, in hopes the future hires will be higher performing.

This is clearly the &quot;new management trend&quot; for 2023, to the point that what&#x27;s newsworthy is which tech companies are __not__ laying off 8%-15% of their staff. Maybe we should hear about those.

I&#x27;m wondering how many of the commenters on these threads have been around for long enough to experience pervious layoff events? The reality is that any company has 5-10% staff that aren&#x27;t really doing anything useful, and can be fired without significant impact to business operations. So it&#x27;s more that companies <i>don&#x27;t</i> just fire those people every year because normally various kinds of negative blowback would ensue. The reason we&#x27;re seeing layoffs now is basically that the conditions are such that said blowback is reduced. In other words: it&#x27;s in fashion (in Elite circles) and they can get away with it.<p>Of course often the appropriate 5-10% aren&#x27;t actually the target of layoffs, but that&#x27;s an orthogonal problem.

Of course other sectors are hiring and hoping to take advantage of moves like this. I&#x27;d love to find some of these folks for a university job if I knew how to reach them.

We benefited from the incessant hiring with outsized compensations. Now we’re on the flip side of that. If you want stability, tech is not the place for you.

Message to Confluent Employees from Jay Kreps<p>Today we’re announcing a very hard change we have to make. We are rolling out a set of adjustments to our 2023 plan oriented around driving additional efficiency. As part of this we are reducing our workforce by about 8%. If you are one of the individuals whose role is impacted, you will receive a calendar invite for a conversation with a senior leader today. If you are outside of the U.S. there may be slightly different timelines based on local laws. If you are one of the individuals whose role is not impacted, you will receive a follow-up email letting you know you are not impacted.<p>Why we are doing this<p>This decision was not made lightly. However, I believe this is a necessary change to set us up for success in the year ahead.<p>To many, I’m sure this news comes as a shock, though those following the broader tech ecosystem closely may be less surprised. In this challenging economic environment, sales cycles are taking longer and many of our deals are more scrutinized by customers. This puts pressure on growth. Meanwhile there has also been a significant shift in the market, resetting expectations for the tech sector. This rapid change in the world around us, left our plans for the year increasingly squeezed between downward pressure on growth from a slowing economy and upwards pressure on efficiency from the rapid change in the market. Ultimately, we had optimized some aspects of our operations for a very different world than we found ourselves operating in. The responsibility for that falls squarely on me.<p>In light of this we reevaluated our plans for the year, and have made the decision to accelerate our path to profitability, while still delivering high growth. In our new plan, we expect to grow revenue by approximately 30% in 2023 and exit Q4 2023 with breakeven non-GAAP operating margin.<p>At my request, everyone on the executive team took a step back to look at our existing expenses and headcount. We wanted to ensure we had fully funded every essential aspect of our near term execution and longer term plans. But we knew that in the rapid growth over the last 8 years, there was room for improvements in efficiency without compromising our longer term plans. With this in mind we made a set of targeted cuts that enable a more rapid path to profitability while maintaining high growth. We’ll talk through these changes in the days ahead.<p>Our plan for departures<p>Unfortunately, we are saying goodbye to many friends and colleagues across the company. We want to do this in a way that ensures we are doing right by our departing team members.<p>In the U.S., impacted employees will be offered severance, healthcare coverage, outplacement services, immigration support as needed and some forward vesting of RSUs. Those outside the U.S. will receive a broadly similar package but with variations based on the requirements of local laws.<p>What’s next?<p>To those who are leaving, I want to say thank you. You have made important contributions to Confluent and I have the utmost respect for all of you.<p>To those who remain, I know a change like this is jarring and disruptive. We’ll be adjusting some team structures and our plans for the year in light of this change. We’ll be discussing this plan in greater detail at our company kick off next week.<p>Despite the difficult environment, I remain very optimistic about our future. We are a leader in a massive, highly strategic space. We have a huge opportunity to build a major new data platform that can be the central nervous system of every company.<p>I want to personally thank all of you for being here, showing up, and helping build Confluent into the enduring company we all know it can be.<p>-Jay

CRO was axed. Anticipate this will hurt sales, Marketing and business development before they go after the engineers.

I&#x27;m more increasingly convinced that ceo are capitalizing on this occasion to lay off people they deem undesirable.

It&#x27;s so strange that every companies&#x27; number is 6-8%. Its almost like it is a cargo cult or something.

why speak about an integer number of humans in a percent?<p>to soften the blow?<p>because they&#x27;re speaking to investors, often institutional for whom it&#x27;s more useful to know the rates and who don&#x27;t particularly care about the lives of the employees joining the job-seekers?

The smart companies are going to be using these layoff opportunities to hire good people.

I’m genuinely curious about the language senior management uses to communicate such things in public.<p>Perhaps it is a disconnect about the audience. The people getting fired are not the audience of the message which communicates their termination. This is inhuman, but what else would one expect from capitalism.<p>I’ve fired people, for cause and in person, for generic layoffs, and for attrition targets. It is hard, and personal. I never talk about responsibility or blame, or how hard it was for me. I have bad news for you. No need to be flowery about it. I owe them a straightforward conversation.

Yet they were hiring all not too long ago

Confluent Lays off! <a href="https:&#x2F;&#x2F;m.marketscreener.com&#x2F;quote&#x2F;stock&#x2F;CONFLUENT-INC-124047168&#x2F;news&#x2F;Confluent-Message-to-Confluent-Employees-from-Jay-Kreps-Form-8-K-42820152&#x2F;" rel="nofollow">https:&#x2F;&#x2F;m.marketscreener.com&#x2F;quote&#x2F;stock&#x2F;CONFLUENT-INC-12404...</a><p>This is highly personal for me since I was part of the early Confluent growth story, having seen the company grow from about 150 folks to 1600+ headcount. I was amazed to see the quality of people who joined the company as each person was highly skilled, motivated and talented in their trades across all the functions of the organization.<p>I treasured the time the team spent at the happy hour every friday and no pay thursday lunch in Palo Alto, as we bonded and built friendships for life.<p>I understand that this is a difficult time for everyone involved, and I want to express my deepest compassion for those who have been affected by the layoffs, including everyone in the technology sector as a whole. Losing a job can be a traumatic experience, and my heart goes out to all of those who are facing this challenge.<p>I hope that you can find new opportunities quickly and that this difficult period in your life is as short as possible. Please know that you are in my thoughts and that I wish you all the best during this difficult time.<p>If you need to speak to someone about how to navigate this cycle, feel free to hit me up. I want to chat with everyone.<p>I have seen market cycles both good times and bad times. I still remember back in the day when my graduation ceremony coincided with the 2008 market crash. As a new graduate, it felt like the end of the world, however once I refocused my energies to dissect the situation, I found an abundance of opportunities in the downcycle. I realized there is an opportunity in every change and that each opportunity is different and unique in perspective.<p>I also wanted to add that we need to capture this energy, across the technology sector in general, to reconnect, chat, share ideas and be there for each other, be part of this giant pack, be part of the confluent mafia, that everyone who is still wearing the golden handcuff will be one day regretful. I hope you do realize that this is a pivotal moment that we get to be a part of, that is to re-evaluate our strenghts and re-align expectations to explore new opportunities and position ourselves for the next stage of growth story.<p>As per the reports, Venture capitalists are burdened with hundreds of billions of dollars that they can&#x27;t invest in later-stage companies due to economic conditions. There has probably literally never been a better time in history to work on solving real-world problems.<p>The acceleration of these highly competent people hitting the labor market at the same time is going to create an burst of innovation. This will create an opportunity that will certainly be a prominent pillar in the next economic recovery.<p>For example, here is a recent post on what others who have left Confluent have been upto: <a href="https:&#x2F;&#x2F;www.linkedin.com&#x2F;feed&#x2F;update&#x2F;urn:li:activity:6953693671552643072?updateEntityUrn=urn%3Ali%3Afs_feedUpdate%3A%28V2%2Curn%3Ali%3Aactivity%3A6953693671552643072%29" rel="nofollow">https:&#x2F;&#x2F;www.linkedin.com&#x2F;feed&#x2F;update&#x2F;urn:li:activity:6953693...</a><p>I know some of us got more severance than others, and I know some of us are in more delicate circumstances than others, but let&#x27;s take a minute to consider the possibilities with each other and at least have a little fun thinking out of the box about what the future could bring.<p>I hope the following verse from Bhagvad Gita will bring peace and strength to you in the current situation: &quot;The friction between our desire for the predictable and the mutability of life makes us feel a bit lost. Rather than rail against change, which the Gita says is inherent in all things, the key is to broaden our view by becoming less self-focused, less ruled by our ego. Change the inputs and you change the story. That shift occurs when we deepen our level of consciousness. The only place of unchanging truth, says the Gita, is internal, where we come into alignment with the Self.&quot;<p>Use all your power to free the senses from attachment and aversion alike, and live in the full wisdom of the Self. —Bhagavad Gita, 2.68

Well, here’s some great news: The CEO takes full responsibility [1]!<p>&gt; <i>Ultimately, we had optimized some aspects of our operations for a very different world than we found ourselves operating in. The responsibility for that falls squarely on me.</i><p>[1]: <a href="https:&#x2F;&#x2F;www.publicnow.com&#x2F;view&#x2F;CEA41F7D5BB5C6CFF1144A3A9C4623D8A7748639" rel="nofollow">https:&#x2F;&#x2F;www.publicnow.com&#x2F;view&#x2F;CEA41F7D5BB5C6CFF1144A3A9C462...</a>

Some of these companies had so many employees - it&#x27;s staggering. Kafka management is a useful tool but man, 2000 employees is a LOT for something my SRE team does as a standard part of the job.

I am not joining this pity-party.<p>Companies hire tech workers to stifle their competition; whilst keeping their workers &#x27;sedated&#x27; on fake projects (i.e. projects that are paraded as important, but the &#x27;inner-circle&#x27; knows well its just to keep the nerds happy). During tough times, its not unreasonable for a company to trim their fat. Personally, tech and academia has been bloated for over a decade now. So no foul here.