The only possible positive thing out of this cringy article is that the severance is decent (for a US company). 4 months of pay and healthcare coverage through Year end. Everything else could have just been a couple of sentences.
Companies need to stop doing this melodrama every time they decide to fire people. Everyone knows the goal is to make money and keep a company profitable for their shareholders. Why these melodramatic posts ? People would prefer honesty. Just say "We need to increase our profits or reduce costs or both and hence we have to lay people off. Here is what we are providing as a severance". That's it.
It’s because, and I say this as a person who has made these calls, some leaders do feel a genuine responsibility for the people that work for them. Perhaps too, the ones that don’t, want people to think that they do. But as a founder and CEO by far the most emotionally taxing thing I have ever had to do is cut staff for the good of the company. You want to treat people the way you would want to be treated if you were in their shoes, but it doesn’t change the realities of the operation.
This case is clearly AI enabled “right sizing”, and it is inevitable for companies that aren’t seeing explosive growth. It seems like they are handing it well, better than most. Good for them.
I am a founder/CEO myself (a very small company so I don't have experience of mass layoffs for full disclosure). However, I don't get this explanation. If you feel genuine responsibility for the people, then figure out a way to NOT fire them. Or be honest and admit that the company needs to make more money/cut costs. Trust me, no one wants to hear "we love you so much but we have to fire you and I feel so bad". It just doesn't land. Be honest, be open and be willing to provide a good severance.
It reminds me of that meme template. “I feel responsible for this layoff.” “Responsible enough to mitigate it or lay yourself off?” “Well, no, not that responsible…”
It's not illogical, it's called leading by example. You consider it unrealistic because most corporate leadership, especially in America, never feels like doing it.
Samsung executives by contrast have a tradition of taking serious pay cuts during bad years. Which is still largely performative given their existing wealth and status, but is at least is a measurable material sacrifice.
Yes, much like the “we’re all family but we’re reducing headcount by…”
Treat people like professionals: admit that you did a bad job but that you’d rather protect yourself and not give up any of your salary/benefits and instead you are going to layoff your “family”.
The paradox can be resolved by assuming they are fallible and limited human beings - they're laying a bunch of people off, they understand at some level that this is evidence that their poor hiring and management decisions have caused some amount of unnecessary suffering, so they feel bad.
But they aren't foresighted enough to have handled the situation appropriately in advance. Or they might have run into the limits of their ability to empathise and only understand that they feel bad but not that the fired people probably feel worse. I'd bet more on the former.
In many ways it is a triumph of modern society how ordinary the people are who head these large and complicated world-spanning corporate entities.
This is a good idea in theory, and in a lot of situations it's definitely under-used. But I don't think it's realistic to expect companies to never have to lay off employees.
like reduce the salary of the c-suite staff by 50% so they are only making 300% more than the average workers. or reduce c-suite salary to the lowest wage while allowing them to live off of their stock and other benefits like company cars, expense accounts, etc. granted, that's for the larger companies, but the bigger companies never do anything like that
1.) The c-suite is like 6 people, reducing their salary isn't going to make much of a dent.
2.) The c-suite are compensated at market rate the same as anyone else. If the CTO at Patreon is making 400k/yr you can't just cut his salary to 200k, he will leave and take a job somewhere else.
I think what you’re describing is only a fraction of leaders and possibly a small minority of them.
This concept is especially not applicable to profitable companies who have layoffs anyway.
Hyper-optimization and AI adoption isn’t actually a business requirement if your business is making a profit. Plenty of businesses refuse to play that game and still make themselves a good living.
Founders who want to claim emotional connection to their employees should think about things like converting the company to full employee ownership rather than thinking of themselves as a paternal benevolent dictator.
Even founders that don't naturally empathize with employees they need to cut and cut purely for personal gain find the processes of cutting employees emotionally taxing. It's just not an easy thing to do.
You should really look into who Jack Conte is and why he created Patreon. He's a smart guy who relies heavily on maintaining a positive social image and is more emotionally aware and stable than most tech founders. I imagine from his perspective the decision, severance and post were all just the smart thing to do.
His name is Jack, and I would describe him as a deeply weird narcissist. You got the "relies heavily on maintaining a positive social image" part right.
They feel a genuine responsibility to avoid the buzzing sound in their head that results from trying to believe and make other people believe they feel a genuine responsibility for people while taking actions that are the polar opposite of anything that you do to someone you feel responsible for purely to increase your own and your investors wealth.
It's fine to fire people, and the severance here is very generous. Business leaders who need to feel like they are a generous parent or 'different' are weak and lying to themselves.
Finally while the severance is generous and to be applauded, all of the phrasing under the guise of caring about people was very transparently just an excuse to say over and over "we are making money and we aren't doing this because we have to" to his investors, which just rubs it in the face of the people being fired over and over. One final insult I guess.
Because part of being a CEO is having social skills, and doing what you suggested is extremely socially inept.
Explaining why layoffs needed to happen, expressing remorse about it, and giving a good severance package is what serious adults with empathy for their employees do.
It's also a good way to maintain at least a neutral relationship with everyone you're laying off. Compare that to a company that coldly fires you with minimal severance, and delivers that message via some low-level lackey (not the CEO) – you, as the former employee, want nothing to do with that company ever again.
I tend to agree. But the devil's advocate in me says that then they'd be accused of not having empathy. That sort of thing might work in Europe — but for a US company, I think you have to pay some lip service to emotions.
"Not having empathy" may have made sense 20-30 years ago when mass layoffs weren't as common as nowadays. Nowadays, everyone knows how it works and how much they really care about the employees. Nothing is worse than someone faking empathy especially CEOs (and I am a small time founder/ceo myself even though of an extremely small company).
Even big US companies today are full of "Is this good for the company?", "Our company values" and other cringe-inducing loyalty/ethics-related propaganda, about as much as 30 years ago. So they are keeping the charade, for better or worse, even though it is as much hypocrisy today as it was 30 years ago.
(Maybe 60 years ago it wasn't hypocrisy, but I lack personal evidence).
20 to 30 years ago was 1996 to 2006. Layoffs were very common, due to outsourcing to cheaper countries. It was common knowledge in my college years of the early 2000s to not expect a long tenure at any employer, and to always be applying to new positions.
You can have cutesy names for employees and a culture with mission statements/purpose, etc. but when it comes down to it, if you're doing layoffs no collection of words is going to appease those that are let go and no collection of words is going to appease those left behind. "Teammates" is probably less cutesy than other companies but still evokes some sort of "we're all in this together" vs. straight up employees when in fact they aren't all in it together, at least not the execs.
There was an interview with Jay Leno I saw recently and he was talking about his NBC deal where he was going to be getting $30mil/year but they had to cut staff to do that so he decided to cut his own pay/raise to keep staff. That type of move by someone at the top is rare or never happens with CEOs. I think Nintendo might be the only case I can think of where I heard something like that happening. That type of move evokes an "all in it together" type of team vs. a clear delineation of CEO/executives and employees.
The melodrama is performative because they have to maintain the mask/facade that they are "teammates".
> First, the people who work at Patreon are special, beautiful humans, through and through. The energy that our team has for Patreon’s mission is a force of nature. So many wonderful humans are going to lose their jobs today in an especially painful moment and market. I am the person responsible for that decision, and I take that with the utmost seriousness.
Reminds me of Ozymandias speech when he says to Dr. Manhattan, that he has personally exprienced the pain of millions of New Yorkers he is about to decimate in the Nuclear attack.
In both the Watchmen graphic novel and the 2009 film adaptation, Ozymandias (Adrian Veidt) claims that he deeply feels and absorbs the psychic pain and deaths of the millions of people he kills. He views this immense personal suffering as his own tragic sacrifice for the greater good of humanity.
Not trying to be snarky, but how exactly? How would it help your mental health to be told "your work was borderline useless anyway and we needed to get rid of you to boost shareholder value. Goodbye!"
Because that's the truth and just because you fake empathy, the person getting fired knows what their worth to the company was. Sure there are people who don't prefer to hear the truth but most employees would. In fact, I would go as far as to say that firing someone by accepting the truth is more empathetic than lying to their faces and crying crocodile tears.
I prefer extremely direct communication because it signals respect to me.
Attempts at empathy in cases like this read to me as insulting, like how you'd speak to a toddler. I know you're lying, you know you're lying, and now I have to pretend like I don't know you're lying. It's one more indignity of status being used against me and demanding I play a part and accept the lie, primarily for their ego.
There is no way to fire a lot of people in a way everyone likes, only ways which suck more than others for different people. Whether you think they are dramatic is not one of the sucks they are very concerned with as you're one if the ones who will forget this layoff in a few hours
But there are ways to reduce headcount without causing waves. Those include things like simply not backfilling for people that leave the company or who are fired for low performance.
Letting a bunch of people go all at once is a sign of poor management and poor planning. Or it's a sign that Patreon wants to go public and ATM the stock market loves layoffs.
> Companies need to stop doing this melodrama every time they decide to fire people. Everyone knows the goal is to make money and keep a company profitable for their shareholders. Why these melodramatic posts ?
People expect it and get very angry if such posts do not appear contrite. I share your cynicism and would prefer they just say it like it is, but that doesn't work for most people.
Apparently this is an unpopular opinion on HN, but a job isn't an output that companies produce, it's an agreement to compensate an employee in exchange for services, and just as the CEO shouldn't take it personally when one leaves to go work elsewhere, nobody needs to act like it's some kind of invidious social contract violation when the company no longer needs some of those services. In other words: resignation and termination are ordinary exercises of each's right to reallocate its resources.
(I am making a normative claim, not a descriptive one; I am aware that that both CEOs and laid-off employees do in fact take it personally at times.)
What if he actually cares, and this is him being honest?
I know it's not usually true, but this is Jack Conte, not Mark Zuckerberg. Maybe he's one of the few CEOs who still has a human brain. I know I would feel legitimately horrible and sympathetic if I had to lay off a bunch of people.
Patreon is profitable. He doesn’t have to fire anyone to continue operations. He just wants more money.
If he cared about them as beautiful people, he wouldn’t fire them.
It’s one thing if you’re bleeding cash and have to cut. Another when you discover a cheaper way to do things and don’t want to retrain and grow in new ways where you’d need people.
Coarsely, people prefer things that don't hurt their feelings or that don't scare them. Sometimes that's candor; sometimes it is indirectness. Complicating matters further, different people will have different preferences in the same situations.
Of course the public relations is all spin. Corporations do not have feelings. Individual managers may feel one way or the other. It is likely those feelings are highly rationalized by how the change affects them individually. Will they make more money? Will they take on added duties without an increase in money?
Some may wax la philosophie politique at times, but we tend to do that in the abstract when things are at an arms length.
At the end of the day, people made a choice between a corporation and a narrow group of stakeholders over employees and the downstream community influence of their buying power, likely a large group and certainly a different group.
You could argue in the long run it is better for society for companies to make these decisions, and many times that may actually be the case. But, in this one instance, when you place it all on the scales, they were not doing it to save a company or make its products and services more competitive in the market. There was nothing "existential" about it. They wanted to go from one profit level to a higher profit level for a certain group, and that is just what they did.
Most of the time I'm convinced its just an attempt to garner sympathy from the general public/outsiders. While obviously not true for all but the vast majority of these executives and C-levels could not name any of the people they are getting rid of in the first place.
Most of the time it's an attempt to stifle negative opinions of those reading the layoff announcements. But in the modern day it's getting old because we see a new layoff every day now.
Everybody knows we aren't a family, and we're doing this to get paid not for some contrived company mission.
I'm convinced with most of these layoff announcements people would take it better if they literally just said we're getting rid of N people for X,Y,Z reasons and called it at that without the presumptuous bullshit.
Morale. It’s important that the remaining employees are psychologically secure. They’re trying to make sure they know the company isn’t in jeopardy and that management has them in mind.
In my /opinion/ a personal address, one on one assurances from a trusted manager, this might be more effective, but HR also needs to be careful that the messaging is consistent so this kind of post is probably seen as the best alternative
I just got laid off after sitting through a company town hall meeting explaining why the reason we’re all being laid off (replaced with Cognizant + Anthropic colab) is totally awesome and great for the company’s future.
Because it was never about you. They have to fake empathy and provide "explanations" because they think its the "Safer" way. You already know that of course.
Because they have to get back to work after. It's a shit leader attitude to admit you just traded humans for profits - you have to keep pretending. On the other end, employees keep pretending they are passionate about X, Y or Z and not just there for the dough. It's a delicate balance.
And why not fire that exec who doubtlessly costs the company far more money while adding substantially less value than any of these employees?
If a company is genuinely losing money and needs to boost it's profitability surely the easiest place to cut costs is the top where the lowest ROI positions are.
Always goes back to that story from Nintendo when the Wii U went pear-shaped on release, Satoru Iwata and many other executives all took substantial pay cuts to keep the company healthy without demolishing their own ranks. Be nice to see an American company do that just one time, as a treat.
In the year of our Lord 2026 when you can be fired for not churning enough tokens, you can believe any corpo-post corpo speak has been checked by their LLMs for "compassionate voicing" and "low risk wording"
No matter what, people who write articles about layoffs like this go straight onto my 'people to stay far away from' list. He is on it since the crying video of the last round of layoffs.
apart from the fact they are trying to make it in the most possible human way, it feels like they did not need to do it, or at least not at this scale at this moment. everything feels kinda weird in this letter.
I watched this dudes youtube channel where he makes music for years before I ever knew he was the CEO of pateron. It was a bit of a wtf moment when I found out.
IBM went seven decades without layoffs. Yes, part of that was the unique situation of post WWII America. But read TJ Watson Jr.'s words - they really took seriously the fact that they weren't just a business - they had a responsibility to people who worked for them. IBM went through a LOT of transformation in those seven decades BTW - they somehow found ways to re-deploy people in their growing business each time.
The words of this CEO are about as good as they can be under the circumstances, but all the happy talk about "special, beautiful humans" and "Patreon’s core business is healthy and strong" and "we’re not changing our roadmap or priorities" are obviously self-contradictory. Of course, if your business can't survive with its current headcount, it would be foolish to run it into the ground - then everyone loses. But this doesn't appear to be the case here.
He took a long time to get to the punch line: "AI has fundamentally transformed the tech industry, though, including how we work, how we build products, how we communicate, and more. That does have an impact on how we operate and organize."
So, there it is, finally. Management realized we can do the exact same thing with 20% fewer (more productive) employees. That means the shareholders (including the CEO and the remaining employees), will have a more valuable company. Sorry, we couldn't share this with the 20% we let go, who helped build the company to this point, and we can't even wait for our business to grow into our headcount, which if everything is so rosy, should be a matter of months. So good luck with the "my journey has come to an end, I am so grateful [to have been fired]..." LinkedIn posts!
I think this is an uncharitable take, and judging by these comments, a pretty common one today on HN – probably because there are less and less founders posting here, and more bitter employees. Patreon isn't IBM, it's not even Google or Amazon. IBM above even FAANG in its day, it was practically an extension of the US government for decades.
Patreon is in the media/content business. It is perfectly reasonable to think that they have to rethink their company structure with AI completely destroying/changing the way their industry works.
The negative metric is more important - if you can cut staff costs by 20% with only 5% reduction in revenue/innovation that’s a win from an investor’s perspective.
Not really. Investors want profits yes, but value is based on largely on expectations of growth. Declining revenue is not a sign of a healthy, valuable company.
I see others mentioning the severance package being decent for a US company. I'm glad they received something, but I'm sorry, can we stop calling this decent? It's markedly lopsided when a company can one day decide to lay off a large portion of their workforce and think 4 months is anywhere near acceptable. The average time to find a new job is significantly longer, especially depending on role and seniority.
I'm tired of seeing American workers bear the brunt of the stupidity of the executive teams that have done their job so poorly as to suddenly need to lay off workers. If you are a leader and you are put in this situation, it is because you are a terrible at your job. It's not the market, it's not AI or some unforeseen disaster...it's because you had your head up your ass instead of actively running the business.
It's decent compared to the severance I just got for getting laid off: 2 weeks of pay and healthcare through the end of the month (at a tech company too)
If the executive team is stupid, and the company making bad decisions, you should be actively searching for a different job. I've never worked at a place where it was any secret when things were getting rough.
You're not a slave to your employer. You have all the same autonomy that they have. No one is forcing you to be there.
People are so hopelessly confused about what a business relationship is. They actually drink the kool-aid of "We're a family here". No, you're work is not your family, it's a business, treat it like one, because I can assure you that leadership does.
> A $1,500 stipend to replace your company laptop.
It seems like a wild choice to give a specific figure as additional cash rather than just letting them keep their (wiped) laptop. That additional cash will be taxed (as should a laptop that is left with the ex-employee, but the used laptop can be valued and taxed as a used laptop rather than a $1500 cash payment [and frankly would often be, um, overlooked...).
It seems like it's better for Patreon (cheaper, less IT labor) and approximately as good for the ex-employee to make this be in the shape of the used laptop than a $1500 payment.
This seems more like a bounty for the laptop potentially full of company information, passwords, code, secrets, etc., which Patreon does not want out in the wild or to have to deploy lawyers to demand back. The carrot, rather than the stick.
I would assume they are company managed Macs so they could just order a remote wipe and then remove them from iCloud so they revert to their out of box setup.
Sure, but they’re still potentially sitting in limbo and turned off in the trunk of an employee’s car or whatever. If you’re concerned about leak issues, why not wipe them and have them shipped back for less than the cost of an extra week of severance.
Also, many employees likely have their own personal laptops and may not have any use for them.
In my experience, so many people these days do not have personal computer at home. Their personal computing is phone/tablet and if they game, it's done via a console.
EDIT: My wife didn't until she got "second job" as volunteer and needed to do some real work. Before that, she was planning entire vacations from her phone.
Might be different in USA? But while just about every reimbursement or perk is indeed taxable here in the EU… It is also used as a measure of how much you earn when calculating unemployment benefits, parental leave, and pension and such. For my own part about 23% of my pre-taxed income is paid to my pension fund.
> First, the people who work at Patreon are special, beautiful humans, through and through.
If you're calling me "special" and "beautiful" and removing my ability to pay my mortgage in the same sentence through no fault of my own, you can absolutely get in the bin.
You could divorce a special and beautiful partner, and be making the right decision. A business decision that wrecks your life does not necessarily speak to any faults of your own.
“It's not personal Sonny. It's strictly business!”
The CEO probably believes it, which would make the difference to me. I think I would skim that line but perhaps it would have a subconscious benefit. Feels more human than weird to me.
He sees what is coming. Crowd funding HAS to be dropping off as people choose between feeding their family or their favorite content creators (the creator will be fine as they have lots of other patrons is a guilt-free rationalization too).
I am pretty sure they opened their excel sheet, ordered the employees by salary, and got rid of the highest paid 10% of each department. Or the lowest performing 10% based on a score in the excel.
What is it with companies doing mass-layoffs and stating no reasons whatsoever, in fact giving reasons why there's no need:
> Second, Patreon’s core business is healthy and strong, and we’re going to be a rock for creators for decades to come. Hundreds of thousands of creators rely on Patreon for their livelihoods, businesses, ...
> We’re reducing the size of our team by 20%, or ...
What market is Patreon even in – the "facilitating crowdfunding for anyone looking to create things" market? There's not much competition there and I can't imagine it's profoundly changed in the last 6 years, let alone months.
Substack is a huge competitor that has grown dramatically in that time. Beehiiv is another competitor that just launched a bunch of new features. Porn and sexy content is now on Onlyfans, which was just becoming mainstream during the pandemic.
More recently, some podcasts have started focusing on YouTube and may be less interested in the paid-elsewhere subscription model.
Despite what they're saying, I'd guess it's the totally-not-a-recession that's happening and they foresee people cutting luxury expenses (ie patreon subs) and they're trying to get ahead of it.
You usually do lay offs because finances aren't doing so good, so you do it to stop the bleeding. Especially if you're a publicly traded company this tells investors you're doing SOMETHING, but for private companies, it's really up to you when and how you do it. I imagine companies with a reasonable war chest that are private try to hold on as long as possible.
This isn't true. You usually do layoffs when you anticipate financial won't be good in coming quarters. If you wait until they aren't good then you're too late and the damage is done. This is why layoffs happen so frequently during "good" quarters.
Recession isn't the driving factor. Many companies will actually increase staffing during recession to "grow" out of it. My former company used to go on merger and acquisition sprees during deep recessions so they would be well positioned when it was over.
People really need to look at this stuff more strategically. The knee jerk reactions are not productive.
I think that they must teach in business school or something that you never, ever, EVER acknowledge or admit that things have ever or will ever go bad in your business.
I’ve worked for startups that will show massive customer churn, tell us that this is “actually a good thing”, do massive layoffs the next week because of the churn, and even while talking about the layoffs say that they’re stronger than ever.
I’ve been doing this long enough that I am mostly used to the gaslighting, and have just accepted that business people have neither the ability nor desire to ever be honest about anything.
> have just accepted that business people have neither the ability nor desire to ever be honest about anything
Another plausible explanation is survivorship bias: if businesses that are publicly honest when things are going poorly are less likely to survive then eventually surviving businesses are more likely to be dishonest irrespective of the "abilities" or "desires" of individual business people.
Business schools teach advertising, not business management. In modern business it is a crime to tell the truth about the dire situation a business is in, unless a CEO is starting anew to fix a situation left by another, and even then it rarely happens.
Well let’s play out the alternative then: a CEO comes out and says everything is not ok and you’re laying off people because you are in dire straits. I admire the honesty, but what do you think happens next?
This assumes that it’s always a lie… The point is you’re supposed to say that it’s a hard time, but you’ve made the necessary changes and you’ll come out stronger (hopefully), because otherwise why would you have made them?
I just don’t think causing a panic is the same thing as honesty. You don’t have to freak everybody out about the health of the company or completely lie about the state of things.
Depends on jurisdiction, in many European countries a company with more than 300 employees can't do these kind of layoffs without giving a concrete reason, and if they do they need to close down a whole office location (e.g. we're closing our LA office, only SF office remains).
Read between the lines. "This thing ain't getting bigger so everyone we needed to get it here but don't need to keep it going has to go." Like a game studio laying half the team off once the product ships.
Make me always question what is going on in these companies. They are essentially a middle man reoffering payment providers services. Host some content. Lot of time just links to external platforms. There is some marketing but not really that much.
They really should be running sustainable service for like tenth of that many employees... If even that. Most of the people don't care about them just the creators on their platform and less cut they take better for patrons or patronees.
I never understand these replies. Has nobody ever worked for a medium sized, yet global-reach company? I think a lot of HN has a very narrow view of how many different roles are required to run a company bigger than a local diner. Feels like a weird confirmation bias where “I only see a dozen engineers around me every day, therefore companies only need engineers to function.”
Hard disagree, the concrete evidence is that that can delete 20% of that bloated workforce and operate just fine.
If we don't run a business then we're running a business of a single employee. You are your own employee with 100% concentration risk. All of your income depends on one employee (you) with 1 source of income. If you had a business with 1 single revenue stream, then you would really focus on the health of that stream (Patreon). If you look around and realize most people are coasting and you can't really point any specific action you've taken that's boosted the numbers then you need to start preparing for that client (Patreon) to end its deal with you.
> Has nobody ever worked for a medium sized, yet global-reach company?
I have, but it also publicized seven completely different business units. It is easier to reason about why what are effectively seven different businesses need so many employees. Each unit did not have all that many people, however. They would all be considered small businesses if the company broke up those business units into individual companies. Patreon, on the other hand, seems to have only one obvious business unit.
But also most haven't. Across most of the western world, 70% of workforce work for small businesses and in Asian markets that rises to 80%+. Medium-large businesses are unusual. The USA is a curious outlier where only around 40% of the workforce works for small businesses. Some HN accounts forget it’s a big world out there.
That doesn’t super shock me. They claim to have sent over $150M to creators in 2017, which is probably several million transactions. I think they do video and image hosting as well, not sure. It’s probably way more now but that’s the most recent number I saw.
I wouldn’t be surprised if they were over a billion in revenue at this point.
I would imagine big chunks of the company also aren’t technology. They seem like they have a sizable PR and marketing presence, community liaisons (read: support), HR to support it all, legal for dealing with illicit content that ends up there instead of OnlyFans, etc.
Twitter had a lot of side projects and people that were not needed to run their core business. E.g. they used to have a Linux kernel engineering team [1]. They argued their value, but I was always a tad skeptical. Even if they earned their keep in terms of ROI, Twitter can definitely be run without kernel engineers.
There are so many contradictions in this statement that either the person who wrote it is completely muddle-headed, or just a bad liar.
> Nothing about our core business has changed – it remains strong and consistent
a few paragraphs later
> But our transformation is going to take time
and the next paragraph
> At the same time, the market in which we operate has undergone profound change over the last 6 months. We need to adjust our cost structure
So is the business strong and consistent, or is it facing a rapidly-changing market, requiring that the business transform and adjust it's cost structure?
> To be clear about the impact of AI on today’s decision: we are not making the above changes because we believe AI replaces humans.
A few paragraphs later
> AI has fundamentally transformed the tech industry, though, including how we work, how we build products, how we communicate, and more. That does have an impact on how we operate and organize.
So do you think AI doesn't replace humans, or do you think that you'll need fewer humans because AI will be doing more of the work?
AI prompt: “Write a melodramatic layoff announcement that blames our problems on vague market/economic changes, suggests we need to transform, yet reassures investors that business fundamentals are strong.”
Nothing in there contradicts. A business that works well today may not work well tomorrow; it's management's job to change the business to better meet future conditions.
> or do you think that you'll need fewer humans because AI will be doing more of the work?
My bet is this one. To be fair, it isn't exactly an unpopular opinion. If I were starting a business today I'd plan to hire far fewer programmers than I would have just 2-3 years ago.
I don't understand why this is problematic for some:
They lay off 93 people so the total # employees before layoffs is 465 and it will be 372 employees remaining after layoffs.
In same post they state there are 300k creators making money on their platform, so the ratio of employees to creators is 1:645 before layoffs and 1:800 after layoffs.
It's a mature business and VC funding has significantly dried up for these kind of middlemen business models.
Why wouldn't 372 people having thousands of meetings between them per week be enough to run such a company?
Edit: If you downvote this without explanation I'd wager you never ran a company.
The only possible positive thing out of this cringy article is that the severance is decent (for a US company). 4 months of pay and healthcare coverage through Year end. Everything else could have just been a couple of sentences.
Companies need to stop doing this melodrama every time they decide to fire people. Everyone knows the goal is to make money and keep a company profitable for their shareholders. Why these melodramatic posts ? People would prefer honesty. Just say "We need to increase our profits or reduce costs or both and hence we have to lay people off. Here is what we are providing as a severance". That's it.
It’s because, and I say this as a person who has made these calls, some leaders do feel a genuine responsibility for the people that work for them. Perhaps too, the ones that don’t, want people to think that they do. But as a founder and CEO by far the most emotionally taxing thing I have ever had to do is cut staff for the good of the company. You want to treat people the way you would want to be treated if you were in their shoes, but it doesn’t change the realities of the operation.
This case is clearly AI enabled “right sizing”, and it is inevitable for companies that aren’t seeing explosive growth. It seems like they are handing it well, better than most. Good for them.
I am a founder/CEO myself (a very small company so I don't have experience of mass layoffs for full disclosure). However, I don't get this explanation. If you feel genuine responsibility for the people, then figure out a way to NOT fire them. Or be honest and admit that the company needs to make more money/cut costs. Trust me, no one wants to hear "we love you so much but we have to fire you and I feel so bad". It just doesn't land. Be honest, be open and be willing to provide a good severance.
It reminds me of that meme template. “I feel responsible for this layoff.” “Responsible enough to mitigate it or lay yourself off?” “Well, no, not that responsible…”
What an illogical and unrealistic meme template that is...
It's not illogical, it's called leading by example. You consider it unrealistic because most corporate leadership, especially in America, never feels like doing it.
Samsung executives by contrast have a tradition of taking serious pay cuts during bad years. Which is still largely performative given their existing wealth and status, but is at least is a measurable material sacrifice.
Yes, much like the “we’re all family but we’re reducing headcount by…”
Treat people like professionals: admit that you did a bad job but that you’d rather protect yourself and not give up any of your salary/benefits and instead you are going to layoff your “family”.
The paradox can be resolved by assuming they are fallible and limited human beings - they're laying a bunch of people off, they understand at some level that this is evidence that their poor hiring and management decisions have caused some amount of unnecessary suffering, so they feel bad.
But they aren't foresighted enough to have handled the situation appropriately in advance. Or they might have run into the limits of their ability to empathise and only understand that they feel bad but not that the fired people probably feel worse. I'd bet more on the former.
In many ways it is a triumph of modern society how ordinary the people are who head these large and complicated world-spanning corporate entities.
>In many ways it is a triumph of modern society how ordinary the people are who head these large and complicated world-spanning corporate entities.
But I was told that CEOs were descended from Mount Olympus itself! Billionaires too!
This is a good idea in theory, and in a lot of situations it's definitely under-used. But I don't think it's realistic to expect companies to never have to lay off employees.
> then figure out a way to NOT fire them
like reduce the salary of the c-suite staff by 50% so they are only making 300% more than the average workers. or reduce c-suite salary to the lowest wage while allowing them to live off of their stock and other benefits like company cars, expense accounts, etc. granted, that's for the larger companies, but the bigger companies never do anything like that
> Like reduce the salary of the c-suite staff by 50%
Perfect way to lose your staff to your competitor.
1.) The c-suite is like 6 people, reducing their salary isn't going to make much of a dent.
2.) The c-suite are compensated at market rate the same as anyone else. If the CTO at Patreon is making 400k/yr you can't just cut his salary to 200k, he will leave and take a job somewhere else.
>1.) The c-suite is like 6 people, reducing their salary isn't going to make much of a dent.
It makes much more than a dent to the ~20 people not laid off, and a likely morale boost to everyone remaining.
That's a whole lot easier to do in a small company, but not very realistic beyond that.
Why a company has to survive but not its people?
For example when it comes to the IRS bill, the company will literally cease operations and sell all of its assets to pay IRS.
Why the employees do not deserve this?
I think what you’re describing is only a fraction of leaders and possibly a small minority of them.
This concept is especially not applicable to profitable companies who have layoffs anyway.
Hyper-optimization and AI adoption isn’t actually a business requirement if your business is making a profit. Plenty of businesses refuse to play that game and still make themselves a good living.
Founders who want to claim emotional connection to their employees should think about things like converting the company to full employee ownership rather than thinking of themselves as a paternal benevolent dictator.
The "realities" being that increasing profits for a few people is more important than the lives of the people doing the actual work?
Here’s a tip - be a better leader. It’s not about you. A little emotional intelligence goes a long way.
The "realities" being that increasing profits for a few people is more important than the lives of the people doing the actual work?
Even founders that don't naturally empathize with employees they need to cut and cut purely for personal gain find the processes of cutting employees emotionally taxing. It's just not an easy thing to do.
These posts seem more like emotional therapy for the founder, helping them cope. It's not about the people being let go at all.
You should really look into who Jack Conte is and why he created Patreon. He's a smart guy who relies heavily on maintaining a positive social image and is more emotionally aware and stable than most tech founders. I imagine from his perspective the decision, severance and post were all just the smart thing to do.
His name is Jack, and I would describe him as a deeply weird narcissist. You got the "relies heavily on maintaining a positive social image" part right.
That was a typo... thanks. I wasn't suggesting that he or anyone else is 100% altruistic.
As someone who has been laid off or fired a few times. Just tell me when my last day is and cut my check.
At this point I assume every employer wants to screw me in one way or another.
My first salaried job replaced me behind my back since I went remote to look after a dying family member.
Corporations by definition are sociopathic entities. They can not ‘care’ about anything aside from maximizing profits.
Once I was on a call receiving the bad news and I immediately texted another job opportunity right then and there.
We’re not family , and we’re definitely not friends.
They feel a genuine responsibility to avoid the buzzing sound in their head that results from trying to believe and make other people believe they feel a genuine responsibility for people while taking actions that are the polar opposite of anything that you do to someone you feel responsible for purely to increase your own and your investors wealth.
It's fine to fire people, and the severance here is very generous. Business leaders who need to feel like they are a generous parent or 'different' are weak and lying to themselves.
Finally while the severance is generous and to be applauded, all of the phrasing under the guise of caring about people was very transparently just an excuse to say over and over "we are making money and we aren't doing this because we have to" to his investors, which just rubs it in the face of the people being fired over and over. One final insult I guess.
Because part of being a CEO is having social skills, and doing what you suggested is extremely socially inept.
Explaining why layoffs needed to happen, expressing remorse about it, and giving a good severance package is what serious adults with empathy for their employees do.
It's also a good way to maintain at least a neutral relationship with everyone you're laying off. Compare that to a company that coldly fires you with minimal severance, and delivers that message via some low-level lackey (not the CEO) – you, as the former employee, want nothing to do with that company ever again.
If we are going to be honest we should be completely honest. "We want to increase our profits and hence we choose to lay people off."
> I am the person responsible for that decision, and I take that with the utmost seriousness.
I also somehow didn’t hear that the leadership is taking a pay cut either, if money is so tight.
I tend to agree. But the devil's advocate in me says that then they'd be accused of not having empathy. That sort of thing might work in Europe — but for a US company, I think you have to pay some lip service to emotions.
"Not having empathy" may have made sense 20-30 years ago when mass layoffs weren't as common as nowadays. Nowadays, everyone knows how it works and how much they really care about the employees. Nothing is worse than someone faking empathy especially CEOs (and I am a small time founder/ceo myself even though of an extremely small company).
Completely agree. That doesn't change the fact that people are fickle and want to have their cake even as they're eating it.
Even big US companies today are full of "Is this good for the company?", "Our company values" and other cringe-inducing loyalty/ethics-related propaganda, about as much as 30 years ago. So they are keeping the charade, for better or worse, even though it is as much hypocrisy today as it was 30 years ago.
(Maybe 60 years ago it wasn't hypocrisy, but I lack personal evidence).
20 to 30 years ago was 1996 to 2006. Layoffs were very common, due to outsourcing to cheaper countries. It was common knowledge in my college years of the early 2000s to not expect a long tenure at any employer, and to always be applying to new positions.
The media will spin whatever you do in whichever direction is maximally outrageous because that's what gets more clicks, eyeballs and ad bucks.
So just ignore them and do what's right.
You can have cutesy names for employees and a culture with mission statements/purpose, etc. but when it comes down to it, if you're doing layoffs no collection of words is going to appease those that are let go and no collection of words is going to appease those left behind. "Teammates" is probably less cutesy than other companies but still evokes some sort of "we're all in this together" vs. straight up employees when in fact they aren't all in it together, at least not the execs.
There was an interview with Jay Leno I saw recently and he was talking about his NBC deal where he was going to be getting $30mil/year but they had to cut staff to do that so he decided to cut his own pay/raise to keep staff. That type of move by someone at the top is rare or never happens with CEOs. I think Nintendo might be the only case I can think of where I heard something like that happening. That type of move evokes an "all in it together" type of team vs. a clear delineation of CEO/executives and employees.
The melodrama is performative because they have to maintain the mask/facade that they are "teammates".
> First, the people who work at Patreon are special, beautiful humans, through and through. The energy that our team has for Patreon’s mission is a force of nature. So many wonderful humans are going to lose their jobs today in an especially painful moment and market. I am the person responsible for that decision, and I take that with the utmost seriousness.
Reminds me of Ozymandias speech when he says to Dr. Manhattan, that he has personally exprienced the pain of millions of New Yorkers he is about to decimate in the Nuclear attack.
In both the Watchmen graphic novel and the 2009 film adaptation, Ozymandias (Adrian Veidt) claims that he deeply feels and absorbs the psychic pain and deaths of the millions of people he kills. He views this immense personal suffering as his own tragic sacrifice for the greater good of humanity.
Exactly. I would be insulted if I was part of this layoff, brutal honesty would be much better
Not trying to be snarky, but how exactly? How would it help your mental health to be told "your work was borderline useless anyway and we needed to get rid of you to boost shareholder value. Goodbye!"
> How would it help your mental health [...]
...to be told the truth? Quite a lot.
I've been inside companies that had to right-size their teams, it's not pretty, but my goodness honesty from management is better than pretending.
Because that's the truth and just because you fake empathy, the person getting fired knows what their worth to the company was. Sure there are people who don't prefer to hear the truth but most employees would. In fact, I would go as far as to say that firing someone by accepting the truth is more empathetic than lying to their faces and crying crocodile tears.
I prefer extremely direct communication because it signals respect to me.
Attempts at empathy in cases like this read to me as insulting, like how you'd speak to a toddler. I know you're lying, you know you're lying, and now I have to pretend like I don't know you're lying. It's one more indignity of status being used against me and demanding I play a part and accept the lie, primarily for their ego.
Whereas directness feels more equal to me.
There is no way to fire a lot of people in a way everyone likes, only ways which suck more than others for different people. Whether you think they are dramatic is not one of the sucks they are very concerned with as you're one if the ones who will forget this layoff in a few hours
All at once? Sure, no good way.
But there are ways to reduce headcount without causing waves. Those include things like simply not backfilling for people that leave the company or who are fired for low performance.
Letting a bunch of people go all at once is a sign of poor management and poor planning. Or it's a sign that Patreon wants to go public and ATM the stock market loves layoffs.
> Companies need to stop doing this melodrama every time they decide to fire people. Everyone knows the goal is to make money and keep a company profitable for their shareholders. Why these melodramatic posts ?
People expect it and get very angry if such posts do not appear contrite. I share your cynicism and would prefer they just say it like it is, but that doesn't work for most people.
Apparently this is an unpopular opinion on HN, but a job isn't an output that companies produce, it's an agreement to compensate an employee in exchange for services, and just as the CEO shouldn't take it personally when one leaves to go work elsewhere, nobody needs to act like it's some kind of invidious social contract violation when the company no longer needs some of those services. In other words: resignation and termination are ordinary exercises of each's right to reallocate its resources.
(I am making a normative claim, not a descriptive one; I am aware that that both CEOs and laid-off employees do in fact take it personally at times.)
What if he actually cares, and this is him being honest?
I know it's not usually true, but this is Jack Conte, not Mark Zuckerberg. Maybe he's one of the few CEOs who still has a human brain. I know I would feel legitimately horrible and sympathetic if I had to lay off a bunch of people.
I don’t buy that he cares.
Patreon is profitable. He doesn’t have to fire anyone to continue operations. He just wants more money.
If he cared about them as beautiful people, he wouldn’t fire them.
It’s one thing if you’re bleeding cash and have to cut. Another when you discover a cheaper way to do things and don’t want to retrain and grow in new ways where you’d need people.
Patreon CEO is full of horse apples.
> People would prefer honesty.
Coarsely, people prefer things that don't hurt their feelings or that don't scare them. Sometimes that's candor; sometimes it is indirectness. Complicating matters further, different people will have different preferences in the same situations.
Appearances still matter, and IMO it will be really ugly if we all decide they don't.
Of course the public relations is all spin. Corporations do not have feelings. Individual managers may feel one way or the other. It is likely those feelings are highly rationalized by how the change affects them individually. Will they make more money? Will they take on added duties without an increase in money?
Some may wax la philosophie politique at times, but we tend to do that in the abstract when things are at an arms length.
At the end of the day, people made a choice between a corporation and a narrow group of stakeholders over employees and the downstream community influence of their buying power, likely a large group and certainly a different group.
You could argue in the long run it is better for society for companies to make these decisions, and many times that may actually be the case. But, in this one instance, when you place it all on the scales, they were not doing it to save a company or make its products and services more competitive in the market. There was nothing "existential" about it. They wanted to go from one profit level to a higher profit level for a certain group, and that is just what they did.
Most of the time I'm convinced its just an attempt to garner sympathy from the general public/outsiders. While obviously not true for all but the vast majority of these executives and C-levels could not name any of the people they are getting rid of in the first place.
Most of the time it's an attempt to stifle negative opinions of those reading the layoff announcements. But in the modern day it's getting old because we see a new layoff every day now.
Everybody knows we aren't a family, and we're doing this to get paid not for some contrived company mission.
I'm convinced with most of these layoff announcements people would take it better if they literally just said we're getting rid of N people for X,Y,Z reasons and called it at that without the presumptuous bullshit.
> Why these melodramatic posts ?
Morale. It’s important that the remaining employees are psychologically secure. They’re trying to make sure they know the company isn’t in jeopardy and that management has them in mind.
Some research supports this https://www.researchgate.net/publication/228120426_Survivors...
In my /opinion/ a personal address, one on one assurances from a trusted manager, this might be more effective, but HR also needs to be careful that the messaging is consistent so this kind of post is probably seen as the best alternative
So why not send this out as an email? What purpose does a public proclamation serve?
This type of BS wouldn’t make me psychologically secure. It would make me afraid because I can’t trust what leadership says.
I just got laid off after sitting through a company town hall meeting explaining why the reason we’re all being laid off (replaced with Cognizant + Anthropic colab) is totally awesome and great for the company’s future.
I do not understand why I’m supposed to care.
Because it was never about you. They have to fake empathy and provide "explanations" because they think its the "Safer" way. You already know that of course.
Because they have to get back to work after. It's a shit leader attitude to admit you just traded humans for profits - you have to keep pretending. On the other end, employees keep pretending they are passionate about X, Y or Z and not just there for the dough. It's a delicate balance.
Patreon just does this every few years. At least Jack Conte didn’t post a video of himself crying about it this time.
Kind of tone deaf of him to post a somber layoff message below his open-mouth laugh-smiling profile picture.
Lol imagine if he had changed his profile pic just for this. I don't think that would make him look any better.
It was small enough I didn’t mind.
The page-blocking newsletter modal wasn’t disabled - boo.
The rich get richer and the poor get more AI edited and toned condolence posting.
That close out is brutal, "to our teammates who are leaving".
Real "Oh no! So sorry to see you go totally by your own choice" vibes.
The business is "solid", but is it not profitable? Who is cashing in on cutting these jobs? Which exec is losing their job for overhiring?
And why not fire that exec who doubtlessly costs the company far more money while adding substantially less value than any of these employees?
If a company is genuinely losing money and needs to boost it's profitability surely the easiest place to cut costs is the top where the lowest ROI positions are.
Always goes back to that story from Nintendo when the Wii U went pear-shaped on release, Satoru Iwata and many other executives all took substantial pay cuts to keep the company healthy without demolishing their own ranks. Be nice to see an American company do that just one time, as a treat.
As someone not good at identifying this myself, what about this post indicates AI editing?
In the year of our Lord 2026 when you can be fired for not churning enough tokens, you can believe any corpo-post corpo speak has been checked by their LLMs for "compassionate voicing" and "low risk wording"
No matter what, people who write articles about layoffs like this go straight onto my 'people to stay far away from' list. He is on it since the crying video of the last round of layoffs.
apart from the fact they are trying to make it in the most possible human way, it feels like they did not need to do it, or at least not at this scale at this moment. everything feels kinda weird in this letter.
I watched this dudes youtube channel where he makes music for years before I ever knew he was the CEO of pateron. It was a bit of a wtf moment when I found out.
He's playing the piano in this video too: https://www.youtube.com/watch?v=fiShsfvbFUA
Appears to be a full time musician and a part time CEO.
Decent keyboard player too
Just going to lay this here: https://www.marketplace.org/story/2016/06/13/profit-ibm
IBM went seven decades without layoffs. Yes, part of that was the unique situation of post WWII America. But read TJ Watson Jr.'s words - they really took seriously the fact that they weren't just a business - they had a responsibility to people who worked for them. IBM went through a LOT of transformation in those seven decades BTW - they somehow found ways to re-deploy people in their growing business each time.
The words of this CEO are about as good as they can be under the circumstances, but all the happy talk about "special, beautiful humans" and "Patreon’s core business is healthy and strong" and "we’re not changing our roadmap or priorities" are obviously self-contradictory. Of course, if your business can't survive with its current headcount, it would be foolish to run it into the ground - then everyone loses. But this doesn't appear to be the case here.
He took a long time to get to the punch line: "AI has fundamentally transformed the tech industry, though, including how we work, how we build products, how we communicate, and more. That does have an impact on how we operate and organize."
So, there it is, finally. Management realized we can do the exact same thing with 20% fewer (more productive) employees. That means the shareholders (including the CEO and the remaining employees), will have a more valuable company. Sorry, we couldn't share this with the 20% we let go, who helped build the company to this point, and we can't even wait for our business to grow into our headcount, which if everything is so rosy, should be a matter of months. So good luck with the "my journey has come to an end, I am so grateful [to have been fired]..." LinkedIn posts!
I think this is an uncharitable take, and judging by these comments, a pretty common one today on HN – probably because there are less and less founders posting here, and more bitter employees. Patreon isn't IBM, it's not even Google or Amazon. IBM above even FAANG in its day, it was practically an extension of the US government for decades.
Patreon is in the media/content business. It is perfectly reasonable to think that they have to rethink their company structure with AI completely destroying/changing the way their industry works.
Bottom line: How do these layoffs increase the successful outcome of product launches on the platform in any way?
Well if the company goes out of business because its not making enough profit then all product launches will cease.
i think the goal is to increase profit by reducing operating expenses, not to increase the successful outcome of product launches.
In my subjective opinion, they don't. Layoffs almost always cause an atmosphere where taking risks is disincentivized.
The negative metric is more important - if you can cut staff costs by 20% with only 5% reduction in revenue/innovation that’s a win from an investor’s perspective.
Not really. Investors want profits yes, but value is based on largely on expectations of growth. Declining revenue is not a sign of a healthy, valuable company.
Upvoting this so more people see how cringey it's written.
My favorite part was when he clarified whether it is/isn't AI replacing jobs
His gurning profile image with that post is certainly quite the juxtaposition.
They have 465 employees? That seems like a lot for what Patreon is.
They provide a lot of services and support to their bigger creators.
Last I heard they also do their own payment processing, which is a substantial technical problem.
Well, they _had_ 465 employees...
I see others mentioning the severance package being decent for a US company. I'm glad they received something, but I'm sorry, can we stop calling this decent? It's markedly lopsided when a company can one day decide to lay off a large portion of their workforce and think 4 months is anywhere near acceptable. The average time to find a new job is significantly longer, especially depending on role and seniority.
I'm tired of seeing American workers bear the brunt of the stupidity of the executive teams that have done their job so poorly as to suddenly need to lay off workers. If you are a leader and you are put in this situation, it is because you are a terrible at your job. It's not the market, it's not AI or some unforeseen disaster...it's because you had your head up your ass instead of actively running the business.
It's decent compared to the severance I just got for getting laid off: 2 weeks of pay and healthcare through the end of the month (at a tech company too)
>instead of actively running the business.
I’d like to be convinced of this point.
If the executive team is stupid, and the company making bad decisions, you should be actively searching for a different job. I've never worked at a place where it was any secret when things were getting rough.
You're not a slave to your employer. You have all the same autonomy that they have. No one is forcing you to be there.
People are so hopelessly confused about what a business relationship is. They actually drink the kool-aid of "We're a family here". No, you're work is not your family, it's a business, treat it like one, because I can assure you that leadership does.
This attitude is why US engineers are 3x more than your European ones.
It doesn't take 4 months to find a job. Life goes on.
> The average time to find a new job is significantly longer
Is that really true?
https://standout-cv.com/stats/how-long-does-it-take-to-get-a...
They found 3.8 months which sounds realistic. I can't imagine the average being significantly longer (like 6+ months?).
It says senior engineer almost 8 months right in that article
> A $1,500 stipend to replace your company laptop.
It seems like a wild choice to give a specific figure as additional cash rather than just letting them keep their (wiped) laptop. That additional cash will be taxed (as should a laptop that is left with the ex-employee, but the used laptop can be valued and taxed as a used laptop rather than a $1500 cash payment [and frankly would often be, um, overlooked...).
It seems like it's better for Patreon (cheaper, less IT labor) and approximately as good for the ex-employee to make this be in the shape of the used laptop than a $1500 payment.
This seems more like a bounty for the laptop potentially full of company information, passwords, code, secrets, etc., which Patreon does not want out in the wild or to have to deploy lawyers to demand back. The carrot, rather than the stick.
I would assume they are company managed Macs so they could just order a remote wipe and then remove them from iCloud so they revert to their out of box setup.
Sure, but they’re still potentially sitting in limbo and turned off in the trunk of an employee’s car or whatever. If you’re concerned about leak issues, why not wipe them and have them shipped back for less than the cost of an extra week of severance.
Also, many employees likely have their own personal laptops and may not have any use for them.
In my experience, so many people these days do not have personal computer at home. Their personal computing is phone/tablet and if they game, it's done via a console.
EDIT: My wife didn't until she got "second job" as volunteer and needed to do some real work. Before that, she was planning entire vacations from her phone.
Might be different in USA? But while just about every reimbursement or perk is indeed taxable here in the EU… It is also used as a measure of how much you earn when calculating unemployment benefits, parental leave, and pension and such. For my own part about 23% of my pre-taxed income is paid to my pension fund.
With RAM prices how they are right now the used laptops might be more valuable than $1500.
I mean, I wouldn't want to have to bulk-purchase a large number of well-spec'ed laptops in this market. But you aren't wrong.
What are you bulk purchasing them for?
Haven't thought about patreon since they got political years ago and I canceled all my subscriptions.
> First, the people who work at Patreon are special, beautiful humans, through and through.
If you're calling me "special" and "beautiful" and removing my ability to pay my mortgage in the same sentence through no fault of my own, you can absolutely get in the bin.
Fundamentally weird behaviour.
You could divorce a special and beautiful partner, and be making the right decision. A business decision that wrecks your life does not necessarily speak to any faults of your own.
The CEO probably believes it, which would make the difference to me. I think I would skim that line but perhaps it would have a subconscious benefit. Feels more human than weird to me.>Creators are earning billions of dollars each year on Patreon, and those earnings have continued to exhibit steady, strong growth.
>Creators, members, revenue, and processing volume continue to show strong, consistent growth every month.
lol strong consistent growth -> 20% layoff
He sees what is coming. Crowd funding HAS to be dropping off as people choose between feeding their family or their favorite content creators (the creator will be fine as they have lots of other patrons is a guilt-free rationalization too).
>it was a hard decision
It wasn’t, I bet executives were laughing reading that
Getting rid of headcount was probably an easy choice, but picking how many and who stays can still be hard.
I am pretty sure they opened their excel sheet, ordered the employees by salary, and got rid of the highest paid 10% of each department. Or the lowest performing 10% based on a score in the excel.
They are just numbers to them
What is it with companies doing mass-layoffs and stating no reasons whatsoever, in fact giving reasons why there's no need:
> Second, Patreon’s core business is healthy and strong, and we’re going to be a rock for creators for decades to come. Hundreds of thousands of creators rely on Patreon for their livelihoods, businesses, ...
> We’re reducing the size of our team by 20%, or ...
> At the same time, the market in which we operate has undergone profound change over the last 6 months.
I guess this is the "reason" but obviously they aren't elaborating. It's odd they picked "6 months" - what changed in "the market"?
What market is Patreon even in – the "facilitating crowdfunding for anyone looking to create things" market? There's not much competition there and I can't imagine it's profoundly changed in the last 6 years, let alone months.
Six years ago was a long time — summer 2020.
Substack is a huge competitor that has grown dramatically in that time. Beehiiv is another competitor that just launched a bunch of new features. Porn and sexy content is now on Onlyfans, which was just becoming mainstream during the pandemic.
More recently, some podcasts have started focusing on YouTube and may be less interested in the paid-elsewhere subscription model.
Despite what they're saying, I'd guess it's the totally-not-a-recession that's happening and they foresee people cutting luxury expenses (ie patreon subs) and they're trying to get ahead of it.
You usually do lay offs because finances aren't doing so good, so you do it to stop the bleeding. Especially if you're a publicly traded company this tells investors you're doing SOMETHING, but for private companies, it's really up to you when and how you do it. I imagine companies with a reasonable war chest that are private try to hold on as long as possible.
This isn't true. You usually do layoffs when you anticipate financial won't be good in coming quarters. If you wait until they aren't good then you're too late and the damage is done. This is why layoffs happen so frequently during "good" quarters.
It's wild how there isn't officially a recession but many companies are acting like there is
Recession isn't the driving factor. Many companies will actually increase staffing during recession to "grow" out of it. My former company used to go on merger and acquisition sprees during deep recessions so they would be well positioned when it was over.
People really need to look at this stuff more strategically. The knee jerk reactions are not productive.
Generally you’re right damn dude 20% of their staff? They needed to stop the bleeding a long time ago clearly.
I think that they must teach in business school or something that you never, ever, EVER acknowledge or admit that things have ever or will ever go bad in your business.
I’ve worked for startups that will show massive customer churn, tell us that this is “actually a good thing”, do massive layoffs the next week because of the churn, and even while talking about the layoffs say that they’re stronger than ever.
I’ve been doing this long enough that I am mostly used to the gaslighting, and have just accepted that business people have neither the ability nor desire to ever be honest about anything.
> have just accepted that business people have neither the ability nor desire to ever be honest about anything
Another plausible explanation is survivorship bias: if businesses that are publicly honest when things are going poorly are less likely to survive then eventually surviving businesses are more likely to be dishonest irrespective of the "abilities" or "desires" of individual business people.
Business schools teach advertising, not business management. In modern business it is a crime to tell the truth about the dire situation a business is in, unless a CEO is starting anew to fix a situation left by another, and even then it rarely happens.
Same with dentists
> say that they’re stronger than ever.
Well let’s play out the alternative then: a CEO comes out and says everything is not ok and you’re laying off people because you are in dire straits. I admire the honesty, but what do you think happens next?
A society that doesn't value honesty deserves to be deceived.
This assumes that it’s always a lie… The point is you’re supposed to say that it’s a hard time, but you’ve made the necessary changes and you’ll come out stronger (hopefully), because otherwise why would you have made them?
I just don’t think causing a panic is the same thing as honesty. You don’t have to freak everybody out about the health of the company or completely lie about the state of things.
> stating no reasons whatsoever
It does under reason for reduction, quoting: At the same time, the market in which we operate has undergone profound change over the last 6 months.
> giving reasons why there's no need... Patreon’s core business is healthy and strong
Actually that's the reason. It says Patreon's core business is strong i.e. everything else isn't? You don't state the obvious unless there's a gotcha.
I assume it is legal reasons.
> core business is healthy and strong
Thst is valid reason to layoff people. If there is no mess to clean, you do not need that many cleaners.
Depends on jurisdiction, in many European countries a company with more than 300 employees can't do these kind of layoffs without giving a concrete reason, and if they do they need to close down a whole office location (e.g. we're closing our LA office, only SF office remains).
Read between the lines. "This thing ain't getting bigger so everyone we needed to get it here but don't need to keep it going has to go." Like a game studio laying half the team off once the product ships.
Honestly the most interesting thing to me here is that to took nearly 500 people to run Patreon.
Make me always question what is going on in these companies. They are essentially a middle man reoffering payment providers services. Host some content. Lot of time just links to external platforms. There is some marketing but not really that much.
They really should be running sustainable service for like tenth of that many employees... If even that. Most of the people don't care about them just the creators on their platform and less cut they take better for patrons or patronees.
I never understand these replies. Has nobody ever worked for a medium sized, yet global-reach company? I think a lot of HN has a very narrow view of how many different roles are required to run a company bigger than a local diner. Feels like a weird confirmation bias where “I only see a dozen engineers around me every day, therefore companies only need engineers to function.”
Hard disagree, the concrete evidence is that that can delete 20% of that bloated workforce and operate just fine.
If we don't run a business then we're running a business of a single employee. You are your own employee with 100% concentration risk. All of your income depends on one employee (you) with 1 source of income. If you had a business with 1 single revenue stream, then you would really focus on the health of that stream (Patreon). If you look around and realize most people are coasting and you can't really point any specific action you've taken that's boosted the numbers then you need to start preparing for that client (Patreon) to end its deal with you.
There's a lot of nice to have time and responsibility that an extra 20% of people get you.
Whatsapp had 55 employees until the buyout (of reported 19B).
Elon cut 80% of twitter staff and...well it's still there.
Every tech CEO was watching that closely, and it didn't come out in the workers favor.
> Has nobody ever worked for a medium sized, yet global-reach company?
I have, but it also publicized seven completely different business units. It is easier to reason about why what are effectively seven different businesses need so many employees. Each unit did not have all that many people, however. They would all be considered small businesses if the company broke up those business units into individual companies. Patreon, on the other hand, seems to have only one obvious business unit.
But also most haven't. Across most of the western world, 70% of workforce work for small businesses and in Asian markets that rises to 80%+. Medium-large businesses are unusual. The USA is a curious outlier where only around 40% of the workforce works for small businesses. Some HN accounts forget it’s a big world out there.
They are not a “pure middle man.”
You should talk to someone who works at Patreon. Or a larger creator on their platform.
That doesn’t super shock me. They claim to have sent over $150M to creators in 2017, which is probably several million transactions. I think they do video and image hosting as well, not sure. It’s probably way more now but that’s the most recent number I saw.
I wouldn’t be surprised if they were over a billion in revenue at this point.
I would imagine big chunks of the company also aren’t technology. They seem like they have a sizable PR and marketing presence, community liaisons (read: support), HR to support it all, legal for dealing with illicit content that ends up there instead of OnlyFans, etc.
To me it's always mindblowing how the headcount of a startup can massively increase and the company still be considered a "success story".
I really don't get.
Twitter used to have 7500 employees and now it is working perfectly ok with 1500~
What am I missing from business perspective?
Twitter had a lot of side projects and people that were not needed to run their core business. E.g. they used to have a Linux kernel engineering team [1]. They argued their value, but I was always a tad skeptical. Even if they earned their keep in terms of ROI, Twitter can definitely be run without kernel engineers.
[1] https://danluu.com/in-house/
Ok now do the other 5990 employees.
no really, search is appalling, web version for mobile is full of bugs
Twitter does not work at all lol
> Twitter does not work at all lol
Can you point to some specific instances? I've seen it working just fine.
It works as well as it ever did. Or the same level of not working.
There are so many contradictions in this statement that either the person who wrote it is completely muddle-headed, or just a bad liar.
> Nothing about our core business has changed – it remains strong and consistent
a few paragraphs later
> But our transformation is going to take time
and the next paragraph
> At the same time, the market in which we operate has undergone profound change over the last 6 months. We need to adjust our cost structure
So is the business strong and consistent, or is it facing a rapidly-changing market, requiring that the business transform and adjust it's cost structure?
> To be clear about the impact of AI on today’s decision: we are not making the above changes because we believe AI replaces humans.
A few paragraphs later
> AI has fundamentally transformed the tech industry, though, including how we work, how we build products, how we communicate, and more. That does have an impact on how we operate and organize.
So do you think AI doesn't replace humans, or do you think that you'll need fewer humans because AI will be doing more of the work?
AI prompt: “Write a melodramatic layoff announcement that blames our problems on vague market/economic changes, suggests we need to transform, yet reassures investors that business fundamentals are strong.”
If we throw all the arguments at the wall, one must stick right?
I think it's a bit more sinister. If they write everything they can claim later they "considered" it.
Nothing in there contradicts. A business that works well today may not work well tomorrow; it's management's job to change the business to better meet future conditions.
> or do you think that you'll need fewer humans because AI will be doing more of the work?
My bet is this one. To be fair, it isn't exactly an unpopular opinion. If I were starting a business today I'd plan to hire far fewer programmers than I would have just 2-3 years ago.
They quoted text declaring both that things haven't changed, and that things have changed. There is a basic contradiction there.
One which is present in a lot of layoff messages. Things are fine! Don't worry! Half the staff has to go because things aren't fine though.
I can never take such statements seriously.
It is pretty serious for all those people who has been laid off.
I'm not saying the situation isn't serious. I'm saying I can't take these performative fluff statements seriously.
Going on and on about how good these people are and then how well the business is going, as they are firing them.
"special, beautiful humans" "wonderful humans" "kind, ambitious, hard working, and mission-driven humans"
How could Chapo do this? /s
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I don't understand why this is problematic for some:
They lay off 93 people so the total # employees before layoffs is 465 and it will be 372 employees remaining after layoffs.
In same post they state there are 300k creators making money on their platform, so the ratio of employees to creators is 1:645 before layoffs and 1:800 after layoffs.
It's a mature business and VC funding has significantly dried up for these kind of middlemen business models.
Why wouldn't 372 people having thousands of meetings between them per week be enough to run such a company?
Edit: If you downvote this without explanation I'd wager you never ran a company.