Patreon laying off 20% of staff

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.

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."

> 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.

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".

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.

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

> 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.

Exactly. I would be insulted if I was part of this layoff, brutal honesty would be much better

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.

> 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.

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.

Appearances still matter, and IMO it will be really ugly if we all decide they don't.

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

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.

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.

Kind of tone deaf of him to post a somber layoff message below his open-mouth laugh-smiling profile picture.

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?

As someone not good at identifying this myself, what about this post indicates AI editing?

Appears to be a full time musician and a part time CEO.

He's playing the piano in this video too: https://www.youtube.com/watch?v=fiShsfvbFUA

Decent keyboard player too

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.

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...

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.

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.

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.

>instead of actively running the business.

I’d like to be convinced of this point.

> 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?).

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.

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?

Getting rid of headcount was probably an easy choice, but picking how many and who stays can still be hard.

> 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"?

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.

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.

> 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.

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?

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.

It is pretty serious for all those people who has been laid off.