More likely this is a build-up of many offenses, like Pincus' past threatening to fire employees if they didn't surrender their stock.
Pincus is a scum-bag of the first order and is ruining startup employee confidence in the value of their equity. He's poisoning the well for the rest of us.
Anonymous is silly in their own way, but you shouldn't be so quick to dismiss things or actions you don't understand.
Actually, you don't understand Zynga since you're relying on rumor and hearsay. I've worked as Zynga. Things aren't as black and white as you think they are.
I don't think he has to have worked at Zynga to understand the problem. Zynga is hardly the only one, but they are one of the biggest of the new crop of startups that grew huge and IPOed to the benefit of very few employees.
Back in the "old days", even when you move the "old days" up to include Google's IPO, a company with such a massive liquidity event could be expected to result in a lot of wealth spread out among early employees. Even receptionists, chefs, etc could cash out big paydays.
With the way things are now, companies are often structured such that unless you're a founder with an ironclad paper trail of equity ownership, you probably aren't going to be walking away with much more money than what you'd get from a particularly good yearly bonus at a large company, and that's absolutely best-case. More likely is that a liquidity event will occur where nobody but preferred stock owners will see a single dime.
This perception is absolutely a problem for the overall startup ecosystem and plays into why everyone involved wants to be a founder and not just an early employee and this in turn plays into why all these startups all these founders are founding are having massive problems hiring non-founder employees.
As a potential startup employee, your biggest concern shouldn't be whether the company fails spectacularly. Failure sucks, but that's easy enough to get past psychologically. Your biggest concern should be what if the company is extremely successful and you get screwed anyway. Because while this is statistically less likely than spectacular failure, it is much harder to deal with and more common than a lot of people think.
I'm not really looking to debate the rights or wrongs of at will employment, but it's pretty common in Europe that sacking a worker requires going through a lot of legal hoops (broadly speaking, unless they've committed gross misconduct, you have to show that you've made efforts to help them improve, that you've provided guidance, and that you've given clear and explicit warnings). Laying them off in Zynga's circumstances involves statutory redundancy regulations (including minimum redundancy payouts according to length of service etc etc).
So I think that it is somewhat unfair to say that their position is fundamentally juvenile or under-informed - agree with it or not, laws based on the principle that you can't sack employees at will are very well entrenched and popular in a number of countries.
And this is one of the reasons unemployment in certain Eurozone countries is so high. It's better not to hire when you're unsure about future demand because you're sure as hell not going to be able to fire them.
This is plain wrong. Unemployment in Eurozone is so high because of a lot of other Problems.
Switzerland has also quite a lot of laws which protect employees and the rate is lower than in a lot of countries.
Europe's ridiculous labor regulations do more to strangle startups in the crib than almost anything else. Zynga may have done some unethical things, but firing employees they didn't need was not one of them.
"Europe's ridiculous labor regulations do more to strangle startups in the crib than almost anything else"
Or alternatively, and this is just my opinion here, you could say that Europe's labor regulations help protect employees from unscrupulous employers seeking to take advantage.
I just don't buy the argument that EU labour laws "strangle startups". Firstly, the actual laws vary from country to country. Secondly, most labour restrictions are phased in over the course of employment. For example, in the UK employees can be dismissed without reason for up two years from the date of hiring. I doubt this is "strangling" start-ups, especially when you consider that in the start-up space many people work less than two years per company.
Perhaps you personally have had some bad experiences, but I don't go to meet-ups around Europe and hear people saying "if only we had a labor market that favoured employers more, then I could get my start-up off the ground!"
Let me put it another way: last month, the UK government put forward some proposals that would drastically reduce employee rights in exchange for companies offering employees small (£2-10k) amounts of equity when they joined. If what you say is true, you would expect companies to jump at the chance. However, the CBI (the main lobby group for British industry) was very luke-warm towards the proposals. They felt that labor laws in the UK were not "strangling" business in the UK, and were in fact an issue of secondary importance when compared to tax incentives and other financial matters.
It's difficult to make generalizations about "Europe" because each country has its own set of labor laws. From what I hear, Britain has a pretty heavy tax situation. This leads to multi-national companies setting up "dutch sandwiches" and other ridiculous tax schemes. They end up paying very little; small and medium-sized businesses pay the full amount. I'm not surprised that various business interests felt that tax reform should be high up on the government's agenda. I don't see how it in any way invalidates the need for other reforms.
I also don't see why making people ridiculously hard to fire is "favoring employees." Maybe it just disadvantages employees who are actually good at their jobs, but didn't manage to get in the door before the incompetent or unsuitable ones? I've been fired before. It's part of life, like breaking up with a significant other. Relationships that have gone bad shouldn't be forced to fester.
For an extreme example of "pro-employee" (but not really) regulations gone bad, check out Spain. More than half of young people under 25 cannot get a job, because of the gold-plated employment contracts their elders negotiated years ago. The unemployment rate for the country as a whole is at least 25% now. See http://www.huffingtonpost.com/2012/08/01/europe-youth-unempl....
Spain has a two-tier labor market where temporary employees are treated very poorly, and usually fired before various "magic dates" kick in when they would automatically get benefits. In the meantime, full-time employees are virtually unsackable and coddled. The older generation, like vampires, are living off the young.
I do think that one problem with the situation in the UK is that 'getting sacked' is a real problem for your career - there's a big stigma associated with it and it can make it very hard to get your next position. If there's less of a sense of fault in dismissal, maybe that's less of a problem.
However, I'm somewhat dubious about claims of it leading to unemployment due to old and useless employees who are entrenched in their jobs - if it were, wouldn't there be more scope for new companies to emerge who weren't weighed down by those older employees? If adding a new employee did add value, wouldn't it be worth doing anyway? If those employees sacked before the magic date were in high value roles, would companies be willing to throw away their experience? I suspect that the problems ultimately stem from deeper problems than this, especially in the case of Spain and Italy - there's probably a thesis that centres around them being historically poor, agricultural countries who've artificially benefited from the EU in a way that has masked big problems in the fundamentals of their economies.
"startups" are not the economy. A startup is barely a real business, so let's not get to hung up on the effect that labour laws have the questionable benefit startups bring to Real Life (tm).
Now US employment law might help startups grow quickly, but the flip side is uncertainty and insecurity for millions of employees in all walks of life. That's your trade off, and you have to get out of the startup bubble world if you really think it's worth it.
New Zealand and Australia also have relatively strong (compared the the US) labour protection laws, and unemployment remains low. Yes, companies need to be more careful when planning, but they are able to lay off staff when the business is suffering, without compromising the protection of employees to spurious dismissal.
Actually, no. Obviously I don't know where you're from, but I'd assume it's not the UK.
Most employee rights come into effect immediately. After one month, you earn the right to one weeks notice, and pay if you are suspended from work for medical reasons, or if you're laid off.
After that, the only extra benefits you get are after 1 year, you can claim unfair dismissal. After 2 years, you can claim redundancy pay.
If you are from the UK, here's some help from the Citizens Advice Bureau.
Actually, your own link is contradicting what you're saying! Here's what it says:
"In most cases to be able to claim unfair dismissal you will have to have worked for your employer for one year if you started before 6 April 2012 or two years if you started on or after that date"
Note the bit at the end about the period changing to two years as of last April. This is a new change, if you're not actively involved in HR or hiring you may not be aware of it.
>Please read what economists have written before you add your opinion.
You're either being obnoxious or are not as informed as you think you are when characterizing all economists' opinions on "at-will" employment as monolithic enough, and the IMF's economists as representative enough of that monolithic opinion that making a statement that disagrees with them should disqualify you from having an opinion.
>Europe's ridiculous labor regulations do more to strangle startups in the crib than almost anything else.
That's your opinion. A different opinion might be that Europe simply lacks a good "startup hub" like PG talks about.
The fact is, it depends on where you're talking about. In Switzerland and the UK you can certainly fire people if you want/need to. You just have to give them notice of a few weeks (or months in Switzerland). This isn't "ridiculous" and the employee is held to the same standard.
Unlike the US where the power difference between employer and employee is clearly seen with the expected two week notice of employees and 0-minute notice expected of employers.
I don't have the data or expertise to determine whether or not the increased stability provided by said employment laws (and by the differing approaches to unemployment benefits / 'the social safety net' which go hand in hand with them) provides consumer confidence that (at least in principle) increases demand to an extent that offsets the economic disadvantages of making companies more cautious about growth. It's also hard to determine whether there are social benefits to such policies that outweigh possible economic disadvantages.
Of course, this is rather a side-issue: many countries have a concept of 'temporary' vs 'permanent' employees, which introduces different dynamics and problems into the system.
It is an interesting topic. I suspect it won't be resolved in a comment thread on HN.
