Restructuring Announcement

Huh.

>> There are no layoffs plans at Automattic, in fact we're hiring fairly aggressively and have done a number of acquisitions since this whole thing started, and have several more in the pipeline.

https://old.reddit.com/r/Wordpress/comments/1hxnh73/automatt...

It's not uncommon for companies to be in a hiring mode until they're very much not in a hiring mode any more.

Yeah. I was made a manager in Feb 2022 with 5 directs and 9 headcount to fill. Hired 5, and then by June 2022 all remaining headcount was cut. In January 2023 we had our first-ever layoffs in the company's 25-year history.

It is so hard to fathom that a leader trusted with millions of dollars of other people's money can be so disengaged from recruiting as to not see a hard wall of cash crunch, months if not years ahead.

You can't assume fundraising will always go swimmingly. You have to always be in survival mode, and if that means not hiring aggressively, then you put on the breaks until the money comes in .

Either as a leader you are clueless about your business cash needs, you are clueless about risk management, or you are clueless about the market, all of which make you not a suitable leader for a long-term company.

The issue was interest rates. Money was free in Feb 2022; the interest rate was literally 0%, and so any cash-generating investment at all is profitable. Fed started raising rates in Apr 2022, at which point leaders started freaking out because they know what higher rates mean, and by Jun 2022 the Fed was raising them in 0.75% increments, which was unheard of in modern economics. By Jan 2023 the rate was 4.5%, which meant that every investment that generates an internal rate of return between 0% and 4.5% is unprofitable. That is the vast majority of investment in today's economy. (We also haven't yet seen this hit fully - a large number of stocks have earnings yields that are lower than what you can get on a savings account, which implies that holding these stocks over cash is unprofitable unless you expect their earnings to grow faster than the interest rate drops, which doesn't seem all that likely in today's environment.)

https://fred.stlouisfed.org/series/FEDFUNDS

Now, you'd have a point if you complained about how centralization of government and economic power with the President and Fed chair, respectively, is a problem. That is the root cause that allows the economy to change faster than any leader can adapt. There used to be a time when people would complain about centralization of executive power on HN, but for some reason that moment seems to have passed.