> What I'm trying to understand is do companies not think these actions will limit their ability to hire in the future?
Running out of money or going out of business also limits your ability to hire in the future.
First responders sometimes apply tourniquets and emergency trauma surgeons sometimes amputate critically injured limbs, even knowing that those have potential or certain downsides for the future of the patient, but aid in survival.
Companies in critical condition or facing threats to their survival may logically do the same thing. If you agree with that, it seems not too far a leap to conclude that taking these same actions while merely under a more moderate threat and wishing to avoid entering a critical condition may also make sense.
This…doesn’t make it better as far as trust in the company goes. Weakness in the business model is one thing. Having a total existential threat to the company that emerges so quickly that it could not be foreseen before sending out a whole whack of signed offer letters — even if real and legitimate — can only mean extremely terrible mismanagement.
What you have to remember is there are no guarantees in the world. No one wants to tell 75 people their job offers were rescinded. The problem is Flexport thinks this is better than the alternatives. Sometimes, you do not have good options. You just have bad and worse.
I think the lesson we can all learn from this is SAVE MONEY, and assume bad things will happen.
In this case, the offers are being rescinded by the CEO who is stepping in to replace the recently dismissed CEO, indicating that the board and new CEO agrees that there was mismanagement previously.
I 100% agree with you and the ability to scale workforce up and down is a key factor in market competitiveness. But offer rescinding is equivalent of a first responder taking off your tourniquet and simply refusing to put another on, leaving you to bleed out. If you can't afford another tourniquet maybe don't take off the one that's holding things together.
IMO hiring be done with a more medium term (6-12 months) mentality based on available runway, and sending out an offer and then rescinding on it usually is a symptom of bad organization where department heads are hiring without CFO buy-in. Maybe just freeze hiring and do layoffs when runway goes below certain level?
But we're not even close to those conditions, are we?
The economy is growing more slowly than in the past, but it's still growing, companies everywhere are issuing stock buybacks and acquiring other companies, regulators are rushing to get out of the way, new tech on the horizon shows incredible promise, consumers are - for the most part - continuing to buy/lease/rent new products regardless of EULAs and subscriptions that are enormously profitable, P/E ratios are stratospheric...it would seem like outlooks have scarcely ever been better for employers.
Focusing on Flexport here, this is a the founder and former CEO taking over again after he clearly announced his disagreement with the outgoing CEO (whom founder installed).
I think it's fine to want to turn the ship around if you think it's going in the wrong direction, or if you think the current course will lead you directly into a storm.
These offered candidates would instead be in danger of layoffs in weeks or months if their offers hadn't been rescinded, so why kick that can down the road? Maybe the new CEO is already planning a round of layoffs for existing employees, so again, why wait?
edit: I missed that Ryan is offering no compensation to the people having their offers rescinded. That is unethical.
Because layoff protections/benefits are often better than people quitting their jobs?
Every single one of these rescinded offers _is_ a layoff , just one that is extremely hostile to the worker.
Frankly, this should be illegal or at least cause for civil restitution. It shows immense hostility by management of flexport and every potential future hire should not give them the time of day indefinitely.
At the very least HN ought to stop running their hiring posts.
Each of those indicators can also be seen as signs of trouble.
Stock buybacks -- indication that investing in business is seen as having lower, maybe even zero or negative, ROI
Acquisitions -- again, natural growth of company less favorable than consolidation. Which could mean that market isn't growing.
Regulators -- I don't know that this claim is well-supported across the board. Would seem to need to be quantified in a very case-by-case basis. There certainly are industries that are examples of the opposite.
New tech on the horizon doesn't generate income today and no one knows for sure exactly which tech to invest in now
Consumers are already cutting spending and about to hit a debt wall later this year; COVID stimulus is pretty much all spent
P/E ratios is a sign, perhaps, that people don't have other places to put there money
Not saying my interpretations are correct, just that there are other sides to your indicators.
They run international shipping logistics so maybe something macro looms large.
Economic disruption in China would be the macro thing. They have real estate issues and large youth unemployment apparently.
More likely they are looking towards an IPO, the market for which is about to reopen if we don’t have any major economic disruptions before instacart and arm list. CNBC squawk box and Cramer talk about flexport a lot so Monday will be interesting if they cover it. It’s already on the general cnbc website.
If I were in Peterson’s shoes I’d get on that show early next week for damage control.
Two out of three of the things listed are akin to the analogy used. RTO isn't (except to the extent that it's being used a shitty way to drive voluntary attrition, but I think those cases are far more rare than merely being accepted as a negative side-effect).
Running out of money or going out of business also limits your ability to hire in the future.
First responders sometimes apply tourniquets and emergency trauma surgeons sometimes amputate critically injured limbs, even knowing that those have potential or certain downsides for the future of the patient, but aid in survival.
Companies in critical condition or facing threats to their survival may logically do the same thing. If you agree with that, it seems not too far a leap to conclude that taking these same actions while merely under a more moderate threat and wishing to avoid entering a critical condition may also make sense.