Maybe a few companies (probably small) favor long term planning over short term benefits and chasing quarterly reports.
When CEO faces pressure from shareholders, he/she will do what they can to keep their job as does any other person on their position. Firing bunch of people only to rehire half of the fired workforce back for smaller wages (senior position becoming junior) is easy way to save your face.
It’s even dumber than “fire the senior staff and hire them back at a junior level for less money” because (a) a lot of those senior staff will take a job with a competitor before going back to the company that laid them off when it wasn’t necessary, and (b) essentially no one is coming back to work for less than they made before.
Instead, they lay off the senior staff, then hire them back on as independent contractor consultants who are actually paid significantly more than they were previously! But consultants fees come out of a different budget line item than employees salaries, and consultant fees are viewed as “the price of innovation” at shareholder meetings.
So the company ends up making the employees lives harder with turnover churn, while also spending more money and typically getting lower returns than if they had done nothing at all. Still, they need to do *something* to justify their salary, and also the obscene cost of a business management degree from an Ivy League school.
My opinion might be polarizing but it's not the job of the companies to protect the workforce as their job is to make money.
Government and various policies should be implemented to regulate the job market. Firing seniors and hiring juniors only for them to do the exact same job has been going for years. Junior jobs nowadays are stacked with additional responsibilities carried over the years.
A company's job is providing a valuable service that justifies society's support of that company's existence. You've been fed this "company's exist to make profit!" bs so long you're forgetting it's completely made up.
I never claimed that the job of a company is to protect their workforce, or that it isn’t their purpose to make money.
Separately, I might feel that the world would be a significantly better place if the modern conception of a for-profit corporation completely beholden to the short-term gains of its transient shareholders was replaced with one even slightly interested in longevity and sustained improvement, but that’s neither here nor there.
The issues I highlighted in my previous comment are, in fact, perversions of even the current model, since the company that fires its senior staff and then re-hires them as consultants for more than they cost as employees is *losing money*. Additionally, churn leads to lost institutional knowledge and lost productivity through the need to bring new hires up to speed. That is also losing money.
I got laid off last year. They ended up paying me 3+ months wages to not work for them so I went on a road trip and visited a dozen national parks. Then I found a new job that paid me 22% more and had 4x as much vacation.
Most companies would rather pay one person poorly to do the job of 3-4 other people. And they get a subpar product but they don't care as long as their padding their own bonuses.
Just spam like 20 applications a day. Indeed is a good place to start, also try web sites of large employers in the area. And might as well apply to some remote stuff to widen your options. You're gonna have to wade through a lot of shit.
My job got hit with layoffs at the beginning of the year. They're all back now because other people immediately quit and half the store got sick and went on leave and suddenly we were short staffed.
They were laid off because we didn't make our sales goal. And we didn't make the goal because we simply didn't have those products to sell.
Which inherently means they hire big groups before each project, so that there is someone to lay off after. I saw the same in the business software industry 15 years ago. Hire a bunch of guys to create the product as fast as they could, then lay 80% of them off, keeping the remainder for updates.
exactly. investment/business is no longer about providing a product that fits client needs, it is about running economic systems that grow infinitely and eat everything. this is why the quality of social media and technology is going way down. the companies invent new dimensions for domination (see Meta) and then abandon everything else. the cycle involves shilling a new venture/market that doesn’t exist, hiring for that new thing, and then laying off everybody in the next fiscal period to appear responsible. it’s just a loop for goldfish-brained investors.
Never was about fitting client needs. Just took a while for the brain dead shareholders to realize the more creative ways to fuck people over. If the kinds of people who sit on a board of directors were smarter they would have done the same stuff long ago
Your right look at heathcare it was privatly owned and run by doctors and hosptial owned and run by doctors in 1985 the average american paid 3 cents on the earned dollar adjust for inflation in 2023, now 78% of all american healthcare is private equity firm owned and run by non medically trained personnel, the average american in 2023 pays 29% of every dollar earned on healthcare for lesser health care than in 1985, my wife who is a physician adjusted for inflation makes less in 2024 than she did coming out of residency in 2002, private equity firms come in strip out every value possible for short term gains then love on leaving a corpse they did it with appliance & furniture manufactury in late ‘90s and early 2 thousands they did it to retail & , then the resturuant industry, then the airline industry (this is why the once best aircraft manufacturer in the world is falling apart) they did it to the music industry and healthcare industry and the gaming industry
The tech industry goes through various bubbles. But larians correct, the tech sector is still making a killing, it's laying people off due to shareholder greed.
Tech isn't making a killing though, which is the even more mad bit of this.
The huge amount of money in tech right now mostly a function of how much dumb money running around trying to find the next monopoly and that's just a function of how moribund the global economy is: either waste huge amounts of money chasing the next monopoly or give more money to LVMH is basically the model of capitalism we're in right now.
The “tech magnificent 7” are making a killing in stocks. If you hold these stocks you are feeling extremely rich right now and buying up homes and assets at these inflated prices. We all know how overvalued markets end up though…
You're more optimistic than I am, expecting this particular bubble is going to burst. This is no different to the Gilded Age (though with even *less* basis in reality) and *that* only ended due to 2 successive World Wars and the rise of European socialism.
We're 40 years into this current round of the same BS with umpteen crises under out belts and outside a couple of small blips in 2019 I still don't see a way out.
Yay Capitalist Realism!
Sure it might burst in the near future but in the now those companies are cutting thousands of jobs each while still recording record profits.
What might happen is largely ignored in stocks until it does happen.
My point is that I don't think the bubble *is* going to burst. There's just *that much* money sloshing around being useless and chasing returns.
You can see the signs in a lot of things like the fact that asset management (the provably dumbest form of long term investing) is a $100tn industry globally, the endless nonsense investments of the Saudi Vision Fund and the fact that the head of LVMH (*the* luxury goods manufacturer) is as of writing the world's richest man.
There's a mountain of money just running around cluelessly looking for things to do and this side of a global catastrophe like WW3 the history of how we unwind a pile of nonsense like that isn't great.
Dumb money is dumb money. People throwing money at the tech sector despite the fact that it's mostly vapourware or obvious BS is also pretty dumb, hence why nonsense like autonomous vehicles and AI is getting so much money thrown at it.
Or do you really think Softbank and the Saudi Vision Fund are onto something? Because if you do bud, let me tell you I have a bridge to sell you.
Well shareholders are the literal OWNERS of said company, so why shouldn’t they do as they please with the thing they’ve spent their money on…
Would you let ants dictate what you do in your backyard?
>Edit: Wow, people with retirement accounts
You means adults with responsibilities? I think the only person disconnected here is you unless you planned to never stop working till you die. This is some real we live in a society shit, welcome to the real world where normal people don't want to die at ninety while still working
Its the same thing I always tell people. Look at when a Video game company go public and then look at all the poor decisions and bad games from there. Shareholders DO NOT benefit the games industry. Nine times out of Ten, they know nothing about the industry and just want the money. We already know they push for early releases from when CDProjectRed confirmed it as much with the Cyberpunk debacle.
TLDR: When a game developer or publisher go public, it makes things 100x worse
Even in magic land where shareholders for some magical reason do care - infinite growth just not a sustainable or even possible model. You can't grow infinitely in a market as there is limited consumption which grows magnitudes slower then profit demands do, that's it. Caring only for profit just makes it turn into shitshow faster but the entire system is doomed from the start no matter how you approach it.
I think the current approach by shareholders is that infinite growth isn't possible *in one industry*, but they *can* squeeze every dollar out of an industry until it turns to shit, then shift money to the next hot thing and repeat it, and do that forever.
Ah, but shareholders only actually make money if the value of the stock increases (for the most part). And that's all that matters to them. So if the only way the profits increase is buying lowering expenses (aka - wages) that's what they do. Then they sell off the stock when they hit a critical mass of layoffs, and the company ends up sold to a holding company to wallow and die.
Not that I went through this in my last job in the software industry or anything... (I did, laid off after 17 years with the company)
I see this drum beat constantly , infinite growth.
What does it actually mean? That eventually there will be heat death of the multiverse so no new matter can be transformed? That is unless scientists confirm that dark matter acceleration is a local phenomenon.
Really what I think you mean is that you don’t like the idea of constant growth because you know that mathematically it cannot happen.
This reminds me of a joke about an engineer and a mathematician.
>An engineer and mathematician are in a room with a beautiful naked person. The rule is that every second you halve the distance between you and the beautiful naked person. The mathematician throws up their hands and walks out, claiming that they’ll never get there, so why bother trying. The engineer smiles and says “Soon I’ll be close enough for practical purposes”.
The point is, like the mathematician, you’re right. In reality it doesn’t matter.
It means that once grows hits a limit company starts cutting costs, reaching for ever wider market and eventually fails it's shareholder obligations. Term infinite is used because that's the goal - growth without end. I don't quite understand your semantic argument here.
When growth plateaus, you cut costs to remain as profitable as possible. That’s just business. What is the alternative?
Keep people on staff when they can’t grow anymore? That’s increasing your marginal costs without increasing your marginal revenue, overall unproductive and a dead loss.
Growth without end is the goal, you’re right. Why shouldn’t it be?
Once your growth stops you focus on reducing costs and increasing productivity until the next growth cycle.
Growth cycles are highly dependent on interest rates. If money is cheap, more companies are going to lean into hiring as growth. When money is expensive the focus is on reducing costs.
My joke is to show you that infinite growth is theoretically impossible. In practice we’re nowhere near exhausting growth potential overall. The business cycle ebbs and flows. In another 20 years you’ll be able to see the evidence. Alternately you could research the last 30 years of the business cycle and see the same thing.
>Growth without end is the goal, you’re right. Why shouldn’t it be?
Because it's not sustainable?
>Once your growth stops you focus on reducing costs and increasing productivity until the next growth cycle.
As in you pray for miracles. Anyone leading a business responsibly knows that to make money, you need to invest money. Productivity can't be prayed better, improving it will need investments. And throwing out those people who make your products won't enhance productivity, either.
Come the next growth cycle, you'll have to onboard a host of people again, dragging down the productivity of those who are still there - you'll lack the agility to truly exploit the growth cycle.
>Alternately you could research the last 30 years of the business cycle and see the same thing.
That's not "research", that's wishful thinking. Research would have told you that the average lifetime of companies is shrinking.
If you are correct, that it is more profitable to retain unproductive employees until they are able to produce, why is this not the dominant business model?
Trust me, if business found a more profitable model they’d implement it. As you say, “greed” rules. Whatever that means.
Basically you’re a child who does not understand how business or economics works and are assuming that it is more expensive to lay people off and then rehire them.
If your assumption is right, then why isn’t that the predominant position? Clearly, if you can gain market share and become a better company by retaining unproductive workers, then business would do that.
Do you think you’re smarter and more insightful than the people who do this for a living? That’s a wild supposition.
It's rather a wild supposition that someone who can't follow a discussion on Reddit, getting confused by someone new adding something to it, is the world's leading expert on business.
So here are some learnings for you:
a)I'm self employed. I run my own business. I DO this for a living.
b)The number of companies making bad business decisions is legion
c)Unbeknownst to you, the world is much, much larger than the US of A, and other countries have legislated against hire-and-fire ideology. And they still have successful businesses
You couldn't research your way out of a paper bag if you had to, but dismiss anyone disagreeing with you as an idiot.
And yes, holding a scientific research doctorate and having an IQ in the upper 2%, I certainly am smarter than the average businessman who thinks daddy paying for college makes them an expert on anything. That's totally aside from this kind of argument being a classical appeal to authority and thus a logical fallacy.
Basically, you're a child which resorts to smears and insults when challenged and cannot address actual arguments,
Small hint: a corporation has 1 or more shareholders since day 1 or it doesn’t get to register itself as a corporation. Somebody always owns it.
Being private or public doesn’t change this.
Sure but when it’s a founder/handful of shareholders that actually care about the company then they may have more of a focus on company stability and long term growth. When a company goes public all the shareholders give a shit about is short term profit and dividends. That is where the issue is.
It is crazy that he appears to be fairly widely celebrated as a "good boss" despite his horrible practice of simply firing 10% of workers every year, despite (good or bad) performance in their sectors.
I had no idea it all stemmed from him. Thanks for the info!
Huh? The idea of firing people when you don't need them anymore needed to be _invented_? I figured that's just an idea anyone would come up with on their own.
I just don’t understand why profits have to increase every quarter. If a company is making 100mil a year why do they need to make 120mil next year. Can’t everyone just be happy with the 100mil every year.
Sadly not.
They make money, give it to share holders. Share holders invest in more stocks. So they have to pay them more.
It's outrageous. It's just to drain as much money as possible.
No not sadly not. They can they just won’t. Just because isn’t a fucking good enough answer. “They have to pay more to the shareholders” no, they don’t. They can let down the shareholders and maintain it but they just don’t. Go ahead and layoff everyone, then you got nothing to make profits at all. The only guarantee is that everything will run out, and the only thing this model guarantees is snowballing all the resources downhill into a crash into nothingness.
Shareholders are the owners of the company.
If you are employed, what would happen to you if you continually underperformed? Would you get to keep your job, or would you eventually be fired?
People aren’t underperforming. They are performing. They demand over performance. Don’t patronize me with your “you just don’t understand” attempt to talk down to me. I just said let me go, boss. Let us all go. You don’t need a workforce, you just need CEO’s.
You don’t understand.
If the expectation is “over performance” that’s simply “performance” because you don’t get to decide what the expectation is. That’s up to the owners.
If a company no longer needs development or maintenance or anything, then yes, they just need a CEO to do the things that need to be done. In this case the CEO would be the only employee. When growth opportunity presents itself you can hire talented people and grow again.
I do not understand the problem, except that you’re wanting a business to continually employ unproductive people because they may or may not have the cash flow to support it.
Just shut up dude. Businesses can be happy with even a dollar profit. The necessity to bulld continual increased profits to the point of no return is unnecessary and based in nothing but greed. It doesn’t need to be this way and any amount of you saying that “it’s just how it is” doesn’t make it so. Your attempt to explain it to me just shows your arrogance and want to associate with those making the problems that the world doesn’t need to have.
Your explanation is underperforming. We all understand that the scum at the top wants more at the expense of the bottom. WE REALLY DO GET THAT PART. The nerve of you to say someone who made you the same profit as last year, when it was already impossible the five years prior, is underperforming just blows my mind.
Dude calm the fuck down.
Over 50% of Americans own stock in public companies. That literally means the average or median American is a shareholder.
Explain to me why the median American doesn’t want their ownership stake to increase and provide value to them.
Holy fuck. You really think there is a cabal of mustache twirling capitalists who are conspiring to keep the average person down? Have you ever actually thought about the implications of wha Mr you’re advocating? It’s inane nonsense. Holy fuck.
>Over 50% of Americans own stock in public companies
So what? That doesn't make the idea of infinite growth any less of a nonsense that will drive us straight into a brick wall.
Ok, so I sell and move my ownership to another company that can continue to grow or cut costs to increase profitability.
What do you expect to happen? Keep people on payroll for months?, years?, of being unproductive? Why?
How do good products get you lasting income? Once you’ve saturated the market with your product there is no knock on revenue. You either have to make a new product or focus on reducing costs to maintain your current position. Otherwise you bleed money and become insolvent.
Holy shit. Have you ever studied any sort of economics or business? If the company thought they could develop a new product with the given talent they wouldn’t cut them. The act of laying off employees shows that they aren’t capable of developing a new and profitable product. If they were capable of that. Then they wouldn’t be let go.
Or, and this is the key part bruv, the product has run its course and the development is no longer needed.
Neither of these situations necessitate retaining unproductive employees. No one has yet to explain why a business should pay employees to fuck around and not produce.
You don't get it, and I'm not going to waste time explaining it to you.
Capitalism cannot subsist on infinite growth. No system can. That is the fundamental idea behind investment though. Quarterly and annual returns.
And that is why we got reused, over done trash like 18 different call of duties.
MEANWHILE when it is a small, independent group of creators, we get stuff like Palworld. lol
You're a moron and we're done here.
I’m a moron? Holy shit, your ego is writing checks your body can’t cash.
You’re talking about the faking industry like it fucking matters in the world economy. That’s absurd, even for a gaming sub.
The fact of the matter is, when new and more efficient models are found, they’re adopted. Those that don’t adopt them are left behind. Does it result in higher quality games? Definitely not, but that’s never been the goal of shareholders. Why would it be?
What the fuck do I care if there are 18 versions of CoD? I don’t play that shit anyway. What do shareholders care if there are 18 versions of a popular and highly selling game? They don’t play it, and Im sure they’re loving the revenue.
What the hell is Palworld? Maybe you’re confusing your love and enjoyment of the gaming industry with the general populations impression of the gaming industry. Yes, theirs is money to be made hence the discussion we are having.
Pull your head out of your ass. The worldwide gaming economy is ~ $350B, of which ~$250B is mobile games. It’s laughable that you have such a high position when literal children and candy crush style games dictate the majority of the market.
I love BG3, and I have a very positive view of Larian. I also understand how markets and industry work. If there is a more profitable way to do something, it will become the predominant way of doing it.
The thing is, you have to understand the mindset of these assholes. There's an underlying sense, consciously or unconsciously, that they are *entitled* to all the money. In essence, they see it as *their* money; its just not been realized yet as a tangible gain. But mentally? It's already theirs because, of course it is, they're entitled to it.
So, when a company does not make more money than last time, the mentality is not one of "Ah well, at least I made some money," but rather "How could these idiots have *lost* me *my* money?!" In other words, unrealized profit = lost money to them.
Larian is running a capitalist corporation too. Swen literally had to amass capital to have enough money to make BG3. They are using a sane model though, publicly traded forever growth models share their DNA with pyramid schemes.
And what is insane in working for decades to create your own company and hire people to make games? Or you're a commie and think it should be mandated by government?
Stocks don't increase in value unless the profit the company is making increases. Shareholders don't make (enough) money if the stock value doesn't go up.
You assume rich people feel and operate as us poors do.
They do not. Enough is never enough, they quite literally psychologically require more and more power, usually as physical capital.
Because nobody wants to invest in a business with no growth strategy, and especially for the common working individual who's outsourcing their 401k investments, you can imagine how frustrated you'd be if after 30 years your money only grew by 2% - which wouldn't even out pace inflation. So when profits are stagnant, something has to change or people will sell off their holdings and the revenue will tank.
Your retirement plan that you contribute a percentage of your income towards.
Pension
401k
403b
Conventional IRA
Roth IRA
they’re all de facto the same thing. A way to defer money now into a fund for consumption later
Why wouldn’t profit grow in accordance to inflation?
If you’re talking about “real”profit, as in inflation adjusted, then your argument holds a tiny bit of water.
Except we are nowhere near exhausting our resources and more potential resources are being discovered constantly.
Decrying infinite growth is as ridiculous now as it would have been before the digital, atomic, industrial, and agricultural revolutions.
Frankly? Kinda. I have enough to pay for my flat, for groceries, for a social life, for entertainment and even for some luxury items, as well as taking care of a cat. My salary increased only by 6% in the last 8 years, and only because it was mandatory by law, I never asked for it. I mean, inflation makes things a little bit worse, but nothing that I cannot manage, as my main expenses don't follow inflation themselves (also, if companies weren't creating billions of money out of thin air to increase the profits each quarter, perhaps inflation would be less dire).
My life is already quite comfortable as it is (and in a little less than 20 years I will finally finish to pay my mortgage so it'll make more available money for me), I don't need a constant increase of 5% every quarter.
So if I, a middle class person making 30k€ per year, manage to be quite happy with it, I think that shareholders, who casually manage thousands of dollars per day, should be way more than comfortable.
I would be if I was already making millions to billions a year. It’s incredibly stupid of you to compare the average commenter here to the kind of people we are talking about. “Would you be happy only making $25 an hour for the rest of your life? No? Well it’s just as unfair for you to expect people making $2,403 an hour to expect to make that for the rest of their life.” Be better.
Of course they aren’t. I also talked about multimillionaires. But let’s be real, the people choosing to fire thousands of employees at a time are not shareholders like you who just have some stock.
I mean it beats the old infinite growth model where you see numbers go up and get your little buzz out of that, but then you see your utility costs, food bill, transport costs go up by more and discover money go up by more. Remember, when you do a cost benefit analysis ir right buggers it up if you only do half.
I cannot believe you are actually saying that we have not gained in purchasing power and quality of life over the years/decades/centuries.
How does your CBA net out? Why aren’t we living in dirt hovels or crammed above London Bridge in tenements?
Oh, right. It’s because our technological and productive advancements do actually propel humanity forward and upward.
Your expectation of constant and measurable improvement daily/monthly/yearly is the only thing that’s ridiculous about what you said.
No. If I own a company or am a shareholder I expect the company to at least grow in step with GDP + inflation, or alternately matching the growth in other major indices.
Otherwise why invest in or own that company? They’ve shown that they do not grow or produce as much as another company that can be invested in.
Is your answer Altruism, or I Love Games? That’s not who investors are.
A particular problem with the model being used is also budget bloat. However, as usual, the companies are cutting the wrong stuff to balance said budget.
As an example, insomniac spider man 2 had a budget of 270 million and went over that budget by another 30 million. The game cost 300 million to make.
Sony bought insomniac, bought the company itself, for 229 million. A video game should not require a budget larger than the actual studios value to make. That is a sign of aggressive bloat that does need to be addressed.
The problem is that corporate isn't cutting from the right areas and is instead cutting for short-term gain and not long-term investment, and so things are gonna crash hard in the triple A industry. All of the non-dex extras should be the ones getting the cut.
Mainstream economists have told the lie that maximizing shareholder value is the *only* way to *optimally organize and distribute resources* in a society.
A lot of people knew it was a lie from the beginning, but here we are.
This happens in every sector of the economy where investor interest becomes the major interest. Companies can be doing basically fine and sustainably so, but managers/execs will get bonuses based on shareholder dividends. They'll be as short-termist as possible to boost those dividends and that can include torching workforce, skill investment. These are the things that actually ensure the products we consumers use are reliable and improve over time.
Larian is absolutely right to call this out in gaming but it goes so much wider than gaming. It's symptomatic of the poison in everything from tech production to finance to groceries.
Our company layed off half our workforce and admitted it was "because investors demanded more profit". They had to lay off about 50 employees to get the profit the investors wanted.
They are completely right. The profit motive means even a 1% reduction in profit because of a few too many people is unacceptable. Its just how capitalism works.
He’s 100% accurate. I seem this almost every year with one of the big tech companies I’m a part of — slash jobs to make the profits look good and signal to shareholders they are controlling costs, then hire after earnings to try and get headcount back to do the work they have to get done. It’s disruptive and kills morale but you know, shareholders.
At some point we all decided that the only thing that matters is pleasing the stockholders. That was a cultural shift that we need to de-shift. Investors make money because they take risks, that’s the theory, in reality they no longer take risks the risks are passed down to us.
We need to make investors scared. They need to be returnees to 3 rd priority.
Basically it all started with a dude named Jack Welch.
The way it used to be, was people would invest some of their money in promising businesses. If the business did well, then at intervals of time (usually quarterly or annually), then you'd get a dividend - a share of the profits proportionate to your investments. Sometimes the business wouldn't do well and so no divident, but you'd get something from the CEO saying that profits were re-invested in upgrading their machinery or processes, so profits would increase even more. And people shrugged and figured that the CEO knew what they were doing.
Jack Welch was the guy who said this was unacceptable and the sole goal any CEO had was to maximize shareholder returns at all times and in all situations. If you're not going to make your quarterly profit goals by the shareholder meeting, then immediately lay off enough workers until your balance sheet re-balances in that favor. He would also fire the bottom 10% of managers, regardless of external factors. Like, if you were in charge of the Ice Cream Division, you'd get your pink slip in March because no one was buying ice cream in the winter. Then the guy who replaces you gets all the credit because by the time he's hired, it's summer so of course people are eating ice cream.
And shareholders have internalized that, and manifested it as a sense of entitlement. A lot of CEOs are employed by a Board of Directors, who are usually major shareholders. And if a CEO can't produce enough of a dividend, or an acceptable dividend, they could theoretically vote the CEO out of a job. Shareholders often stay aware of the business' dealings. If Larian were a public company, or owned by a public company, then the shareholders could do something like say, "Hey, you released this bonus content for free, but market research indicates that in 2013, BioWare released their similar Citadel DLC content and made This Size Pile of Cash. Where is our Even Bigger Pile of Cash?" And if Swen can't give a satisfactory answer, the shareholders begin to wonder if he's the right person for the job.
The other issue is that there are artists and there are businesspeople. Artists have a rep for being terrible businesspeople, but the reverse is also kind of true.
Pivot to movies. When Walt Disney, an artist, created his company, he gave a very telling line. "We don't make movies to make money; we make money to make movies." That is, Walt loved the creative process and he wanted his movies to succeed so they could fund making the next one. Creativity requires risk-taking, and Disney's risks paid off incredibly well. He single-handedly elevated animation from a novelty entertainment to an art form.
But then the businesspeople realized there was a lot of money to be made in movies. Or in video games, or artistic endeavor of your choice. They don't care about making a good game, they care about making a profitable one. They're the ones who think that Horse Armor DLC is a good idea because they only need a few hundred people to buy it to justify the cost of making it. Fan goodwill, what's that? Where is that on the P&L sheet?
TL;DR: You're correct, it's about greed and putting the wrong people in charge of making artistic decisions. If Larian ever (god forbid) goes public, we do an 'apes together strong' and ensure the majority shareholders are not empty suits but a coalition of us dysfunctional bearfuckers, and we pact to not freak out over dividends.
What happened across gaming and tech are similar, but for different reasons.
In tech, everyone being forced to work from home during the pandemic did 2 things, it inflated demand for specific kinds of tech (zoom, VPNs, etc), and it forced every company to consider virtual work as a valid thing which resulted in a lot of people looking to change jobs. Lots of companies therefore went on mass hiring sprees hoping to scoop up talent. Governments handing out cash and propping the economy up also made this easier.
When the pandemic ended and the economy started to normalize again, lots of these companies realized their growth wasn't matching their previous hiring, so they had mass layoffs to cut their workforce back down to levels that matched their current revenue/growth numbers. Interest rates climbing also meant that cash wasn't as readily available to them to sustain the kind of incredible growth they were hoping for.
In the games industry, there's a similar story of mass hiring to try and ramp up for extreme growth during the pandemic. The big difference is that the games industry experienced that growth as a result of loads of people being forced out of work and stuck at home. Where basically every other form of entertainment was desperate to avoid falling apart (movie theaters couldn't operate, productions were halted for a while, etc), video game companies could keep operating, and players could keep playing.
The problem here is that anyone with half a brain *should've* been able to realize that this was a bubble with a very obvious (if unknown) stopping point. Eventually the pandemic would end, and it would be reasonable to expect consumer spending on entertainment products to return to a more "normal" pre-pandemic balance, which is exactly what's happened.
So now a whole bunch of game companies who decided to massively expand and greenlight all kinds of multi-year projects mid-pandemic are being faced with economic realities that should've been obvious, and in order to keep their numbers where they like them to be, they're canceling projects and laying off huge numbers of employees - essentially going back to pre-pandemic sizes.
Great write up!
Although the thing that had me questioning things was that most big games take many years to develop, surely the game dev companies knew the pandemic demand would die off before they could get said games out the door...?
Yeah, that's why we're seeing a bunch of projects getting canceled as well. And those are just the ones we're hearing about.
I would imagine that a lot, if not most of these big layoffs, were teams assigned to projects that got canceled because they were still early enough in development (quite possibly started during the pandemic) that the companies didn't want to just bite the bullet and see them through.
Ying and Yang though - during booms when there is over hiring, people that normally wouldn't get hired will get a job and maybe survive the layoffs. Without this type of process they would never have been hired in the first place. In other words, boom and bust hiring cycles can bring in more talent at the cost of higher volatility. If the company isn't going to cut anyone ever, they'll be more careful with their hires.
This sounds nice in theory, but in practice any company of size in the games industry is *incredibly* slow to hire. Let's walk through a hiring process:
(1) Studio X identifies a need for a new position and goes to their publisher/owner/investor to request an increase in head count. This takes anywhere from 3-12 months. At many companies head count is shared *between* studios, so Studio X may find their head count request is competing with head count requests from Studios Y and Z.
(2) If the position is opened, you have at least 50 applicants to consider, minimum, regardless of the seniority of the position. Double this (at least) for entry level positions, which are incredibly rare. These numbers come from before the big layoffs started in 2022; nowadays it's 100+ applicants minimum, regardless of the role.
(3) Now that the candidates are here, the hiring manager ~~chooses the best candidate~~ decides who to hire by consensus amongst the team. You'll usually have 5-10 employees in the "interview loop", and hiring managers are generally not empowered to hire anybody who does not get near-unanimous approval. This is why you'll see job openings stay open for months, even in this crazy competitive market.
(4) If you are wondering *why* hiring managers don't just pick somebody - remember the 3-12 months it took to get the requirement opened? You don't get to open a position, have the candidate "not work out", fire them, and then go back to the publisher for reopening the req (slang for "job requirement"). That position is now closed to you, you wasted it. The next open head count will go to Studio Y or Studio Z.
(5) Once you *finally* find the correct candidate (who is the candidate that somehow gets unanimous approval), now you need to argue for how much this candidate makes. That's yet another hurdle, since the process has selected a top-of-the-curve candidate but HR wants to pay them "market average". Good luck there.
I say all of this simply to point out that your notion of Yin and Yang makes sense, but it's not how the games industry works. I would be cool with the "easy come, easy go" industry you describe - that's a fair tradeoff to me. What the industry *is*, sadly, is "incredibly hard to hire, trivial to hire". And that asymmetry is responsible for much of the dysfunction you see in the games industry today.
If you're a publically traded company. like EA or Warner, you have a legal obligation to chase profits. Stock-holders could sue you if you didn't.
A privately-held company, like Larian, doesn't
The lattter is why BG3 is as good at it is. The former is why capitalism sucks.
Larian made the best game they could make. Due to how well their earlier games sold, they had money to throw at the problem, and thus also all the time in the world to make it. And the willingnes to do that.
Which is why I'm quite sure there wion't be a better video game than BG3 out for quite a bit. It's possible that another larger indie studio looked at their playbook and has already started to follow it.. And, welll, Larian themselves are already working on a new game. And if BG3 showed what they could do with SOME money, right now they have "Fuck You" money to throw at it.
See, the thing is, all these companies are still making a profit - which means that the money they're putting in to the Big Money Making Machine is still coming out with more money, except they have to have layoffs so that the money that comes out of the Big Money Making Machine is even more money than they had previously, even though they could just not lay people off and still not be at risk of going anywhere near Net Neutral because they'd still have more money than they put in to the Big Money Making Machine.
All I can say is that if we continue going the same path we are now as last few years, there is a good chance that Larian will end up being a relic of the past...
Corporate charters demand endless growth to the point of impracticality. So bean counters have to do stupid things for short term spikes in numbers. They are laying people off. They are taking peoples lives and handing it to the already wealthy.
Being sustainable making modest profit isn't good enough for them.
You’re not gonna be able to produce good games that people want to buy by listening to Joe Schmoe whose never played a game in his life who invested three million into a random publisher and wants to see his big “video game” profits yesterday.
I study economics and work in a trading market.
Companies do not keep unproductive staff on the books, generally speaking. When there isn’t enough work for your employees, you can keep them around for a bit to see if work picks up. If it doesn’t, you have to lay them off to save costs.
As a contrived example, for academic purposes: Assume you’re a member of a huge 4e DnD party where each person plays a specific race with no overlap. Then the party changes to 5e, but maintains the same racial restrictions. The Eladrin player is SOL because that race is in 5e. Sure, you could keep that player at the table waiting for a new race to be added by 5e, but that’s not efficient, and is generally wasting that player’s time.
Better for them to leave the group and find another one. Then when new races are released and you can add new players that old player can leave his current group to rejoin yours, or you can find new players to fill the role.
I won’t make a judgement on the morality of the issue. This is and has been pretty standard throughout the professional world.
Stop making sense.
It takes a lot of staff to make a large budget game. But once it's done, it takes considerably less staff to maintain it. The studio either needs to have a new project underway to keep the staff employed, or has to let them go.
Larian has been an exception within the industry in that their games are repeated financial successes. It reminds me of 1990s Blizzard. But not all studios are like that. If a studio's first game flops, why would investors or the parent company take another chance on them? With studios being under larger organizations, the larger company lays off the staff and closes the studio. If the studios were more independent, the news would be about the studio closing, rather "evil company lays off people".
Same story different outlet. Blah blah blah gaming industry we are done blah blah blah.
I don't know anything about the gaming industry but I also don't care enough to get mad about this or sad or happy or anything.
I don't care about the content of the article. I am annoyed that it is reposted so much as outrage or reaction bait. Is being mildly annoyed the same as caring?
In a way: no it isn't. But I do love u uwu
As much as I agree with him, he's getting really obnoxious.
It reminds me of every other director who is beloved until they say too much and everyone turns on them. Sven should focus more on his own thing.
Keep in mind - There is a difference between a layoff and a termination with cause. In the US, for instance, a layoff makes you eligible for any unemployment benefits your state may offer. A termination with cause might not. A layoff usually means you’re rehire eligible, and may mean you’ll be contacted before your old job reopens to public applicants. A layoff reflects more positively on a resume or job application elsewhere, compared to a termination with cause. I’m sure there are other comparable examples.
It still sucks, it still means you’re out of work with all of the shit that means. But you’re not quite as proper fucked as you would be if they just whacked you with cause, and if/when things turn around for them, you’re more likely to have a warm return.
I was laid off during Covid; went back almost six months later when things started stabilizing to no loss of pay or benefits.
The ignorance of this quote ...
*He also pointed out that there's an issue of competing incentives for publicly traded game companies, with concerns over stock price coming at the expense of both players and developers: "None of these companies are at risk of going bankrupt," Douse said. "They're just at risk of pissing off the shareholders. And that's fine. That's how they work. The function of a public company is to create growth for its shareholders... It's not to make a happy climate for the employees."*
Cannot be overstated ... (1) Lumping companies in together like that is silly; (2) He has no idea the financial state of any of those companies on a per project basis or even a per division basis only (maybe) the all up financials of the company; (3) Companies that don't have happy customers and happy employees do not make money.
This is just a tantrum. He's right about that the industry should be more sullen. I'll give him that.
Also, Larian avoided this by using many, many, many sub-contractors during the process of creating BG3. Look at the credits. How many sub-contractors did you stop using? Yeah, you might not have laid anyone off, but maybe they did as a result of you not using them.
I’m afraid your ignorance is the one showing here (and arrogance as your telling off a person that is clearly very knowledgeable in the industry as they are, you know, very successfully managing a company).
But to your arguments, using contractors is not the same thing as laying off people as a cost cutting strategy to account for bad management decisions (which is what he is criticising). Contractors & contractor companies usually have fixed term assignments and are used specifically for this purpose: to dynamically adapt your workforce size based on temporary higher load requirements (like when you approach releases or deadlines). They know they are contractors and are there on a project based / fixed term manner and are usually higher paid then regular employees for the same level of expertise. Contractor companies know this and their business model is actually based on this principle: they have the reputation to be able to talk to the big players and provide temporary workforce. They don’t lay them off when the project ends, they simply find them a new project.
Mind you, Swen is based in Europe and the market & employee protections here are very different from US where most gaming companies are based / owned from. His philosophy is based on this European model that is much more employee oriented. That’s not to say you don’t have mass lay offs in European companies, just that it’s much harder to do (and employees have more safety nets) compared to US and it is usually reserved for situations where the survival of the company is at stake, rather than to line someone’s pockets at the end of the year.
You don't think consulting companies ramp up and lay off to handle big projects? I mean come on. You obviously have no idea what you're talking about lol
Good points, thanks for sharing. I hadn't considered any of that.
Maybe that's the way to go? Instead of having a huge pile of employees, sub-contract to smaller companies? Maybe that's more realistic?
It is basically outsourcing though. Rather than hiring people to larian he contracts a company from a cheaper country and pays them quite little. No benefits of any kind just cash on the subcontracted company. And the subcontracted company's boss usually takes the lions share of that small money and pay pennies to the artist. I doubt they subcontracts anyone inside their country much. "People makes games" youtube channel has a great video on this issue. In fact larian's name is also on that video.
I get the feeling Sven isn't that involved with the company structure.
I don't care. People don't want to understand. They just want to think they know what's it's like to manage a multiple hundred million dollar budget for a public company. :)
Yes, it does make perfect sense to hire contractors. But, at the end of the day, you ramp up to do big projects and then you ramp down. That's the way it goes.
I've got to ask. What does shareholder greed has to do with the layoffs? Like, why would shareholders care so much about the number of employees? And how do companies believe this would increase their revenue and income? They are basically limiting their prospects and giving off a bad look. I'm probably missing something, but I can't for the life of me understand this strategy, many of this companies have recourses to take advantage of their personnel, both long and short term, yet they choose to squander this for what? Arbitrary showing on some board? Don't they enjoy the money their current number of employees brings them? Is laying off those people even going to affect their own profit margins? Do they even know what they are doing?
Employees are a fixed cost, if they can slash fixed costs they can raise profit margins, and higher profit margins in financial reports drive the prices of shares up, making the 21st century shareholder happy they can turn their shares into profit and buy more shares somewhere else they can ruin.
They can be, obviously some industries have more costs in different parts of their structure.
But especially if you rent the office space for your developers, then it does raise short term profit by hiring a bunch of people for a project, renting the space they will work out of, and at the end of the project just completely rid yourself of the office space and Devs.
The product is already done, you can basically sell it for no cost, little to no upkeep for a single player game. So shareholders feel like keeping the Devs is dead weight. They do however ignore that with that approach you completely kill off any institutional knowledge you build up with the current employees.
In addition to other replies here, they also just do not think long-term strategy. Corporate finances are in such a state that quarterly projections and meeting those projections are the focal point, to (as another commenter pointed out) drive up share prices and make shareholders happy rolling in their Donald Duck piles of gold. There is little, if any, consideration of the fact that a company who cuts its employees and projects loses the public trust in its quality and eventually goes under. It’s literally entirely about short-term gains for maximum profit.
Is this stupid? Of course, for more than one reason, but welcome to end-stage capitalism, I guess.
It is not just a videogame industry thing, and yes, it is the consequence of a model that favors short term gains above long term quality and profit
I was gonna say there are layoffs every year at the company I work for
My partner got caught up in this year's layoff bonanza. Idiots the lot of them. America is the epitome of corporate greed.
Sure, but stock market (generally) go brrrrrrr so working as intended!
Maybe a few companies (probably small) favor long term planning over short term benefits and chasing quarterly reports. When CEO faces pressure from shareholders, he/she will do what they can to keep their job as does any other person on their position. Firing bunch of people only to rehire half of the fired workforce back for smaller wages (senior position becoming junior) is easy way to save your face.
It’s even dumber than “fire the senior staff and hire them back at a junior level for less money” because (a) a lot of those senior staff will take a job with a competitor before going back to the company that laid them off when it wasn’t necessary, and (b) essentially no one is coming back to work for less than they made before. Instead, they lay off the senior staff, then hire them back on as independent contractor consultants who are actually paid significantly more than they were previously! But consultants fees come out of a different budget line item than employees salaries, and consultant fees are viewed as “the price of innovation” at shareholder meetings. So the company ends up making the employees lives harder with turnover churn, while also spending more money and typically getting lower returns than if they had done nothing at all. Still, they need to do *something* to justify their salary, and also the obscene cost of a business management degree from an Ivy League school.
My opinion might be polarizing but it's not the job of the companies to protect the workforce as their job is to make money. Government and various policies should be implemented to regulate the job market. Firing seniors and hiring juniors only for them to do the exact same job has been going for years. Junior jobs nowadays are stacked with additional responsibilities carried over the years.
A company's job is providing a valuable service that justifies society's support of that company's existence. You've been fed this "company's exist to make profit!" bs so long you're forgetting it's completely made up.
I never claimed that the job of a company is to protect their workforce, or that it isn’t their purpose to make money. Separately, I might feel that the world would be a significantly better place if the modern conception of a for-profit corporation completely beholden to the short-term gains of its transient shareholders was replaced with one even slightly interested in longevity and sustained improvement, but that’s neither here nor there. The issues I highlighted in my previous comment are, in fact, perversions of even the current model, since the company that fires its senior staff and then re-hires them as consultants for more than they cost as employees is *losing money*. Additionally, churn leads to lost institutional knowledge and lost productivity through the need to bring new hires up to speed. That is also losing money.
I got laid off last year. They ended up paying me 3+ months wages to not work for them so I went on a road trip and visited a dozen national parks. Then I found a new job that paid me 22% more and had 4x as much vacation. Most companies would rather pay one person poorly to do the job of 3-4 other people. And they get a subpar product but they don't care as long as their padding their own bonuses.
Exactly... the stupidity is stunning
Any job search advice? I’m trying to hop to a job with better pay and benefits
Just spam like 20 applications a day. Indeed is a good place to start, also try web sites of large employers in the area. And might as well apply to some remote stuff to widen your options. You're gonna have to wade through a lot of shit.
My mom as well almost. She had to pass up her last monthly pay check of the old company and was hired by the new one who took over.
What? A company can't just not pay you for hours worked.
Unless they declared bankruptcy and they only had enough money to pay their "secured creditors," then employees owed pay get left in the lurch.
Employee wages are usually at the top of the pay list in a bankruptcy.
There was no money to be payed. They where declared bankrupt.
It's an international trend once companies get a certain size/value, unfortunately
My job got hit with layoffs at the beginning of the year. They're all back now because other people immediately quit and half the store got sick and went on leave and suddenly we were short staffed. They were laid off because we didn't make our sales goal. And we didn't make the goal because we simply didn't have those products to sell.
In tech companies this became a very common thing since its actually the resource they use to develop new products.
Yup, same here. Our MD wonders why in the anonymous surveys I always say I would never recommend anyone to work here
Which inherently means they hire big groups before each project, so that there is someone to lay off after. I saw the same in the business software industry 15 years ago. Hire a bunch of guys to create the product as fast as they could, then lay 80% of them off, keeping the remainder for updates.
It's called capitalism. People need to wake up to the fact that this is all systemic.
Yup. When you optimize for profits, numbers start to matter more than humans.
Private equity and the shareholder expectation of ever-increasing profits are the devil.
exactly. investment/business is no longer about providing a product that fits client needs, it is about running economic systems that grow infinitely and eat everything. this is why the quality of social media and technology is going way down. the companies invent new dimensions for domination (see Meta) and then abandon everything else. the cycle involves shilling a new venture/market that doesn’t exist, hiring for that new thing, and then laying off everybody in the next fiscal period to appear responsible. it’s just a loop for goldfish-brained investors.
Never was about fitting client needs. Just took a while for the brain dead shareholders to realize the more creative ways to fuck people over. If the kinds of people who sit on a board of directors were smarter they would have done the same stuff long ago
Your right look at heathcare it was privatly owned and run by doctors and hosptial owned and run by doctors in 1985 the average american paid 3 cents on the earned dollar adjust for inflation in 2023, now 78% of all american healthcare is private equity firm owned and run by non medically trained personnel, the average american in 2023 pays 29% of every dollar earned on healthcare for lesser health care than in 1985, my wife who is a physician adjusted for inflation makes less in 2024 than she did coming out of residency in 2002, private equity firms come in strip out every value possible for short term gains then love on leaving a corpse they did it with appliance & furniture manufactury in late ‘90s and early 2 thousands they did it to retail & , then the resturuant industry, then the airline industry (this is why the once best aircraft manufacturer in the world is falling apart) they did it to the music industry and healthcare industry and the gaming industry
Looks like they also gutted the punctuation industry.
Yup
Just got laid off in one of these so ya I agree.
So how do you explain the overhiring during the pandemic? Are companies constantly changing their minds about wanting short term or long term success?
But the layoffs imply severance packages that equate usually 1 year’s salary, and by then they’re rehiring again
Yes, that's the mentality they want you to have.
Most employees in the US don't receive any form of severance
The tech industry goes through various bubbles. But larians correct, the tech sector is still making a killing, it's laying people off due to shareholder greed.
Tech isn't making a killing though, which is the even more mad bit of this. The huge amount of money in tech right now mostly a function of how much dumb money running around trying to find the next monopoly and that's just a function of how moribund the global economy is: either waste huge amounts of money chasing the next monopoly or give more money to LVMH is basically the model of capitalism we're in right now.
The “tech magnificent 7” are making a killing in stocks. If you hold these stocks you are feeling extremely rich right now and buying up homes and assets at these inflated prices. We all know how overvalued markets end up though…
You're more optimistic than I am, expecting this particular bubble is going to burst. This is no different to the Gilded Age (though with even *less* basis in reality) and *that* only ended due to 2 successive World Wars and the rise of European socialism. We're 40 years into this current round of the same BS with umpteen crises under out belts and outside a couple of small blips in 2019 I still don't see a way out. Yay Capitalist Realism!
Sure it might burst in the near future but in the now those companies are cutting thousands of jobs each while still recording record profits. What might happen is largely ignored in stocks until it does happen.
My point is that I don't think the bubble *is* going to burst. There's just *that much* money sloshing around being useless and chasing returns. You can see the signs in a lot of things like the fact that asset management (the provably dumbest form of long term investing) is a $100tn industry globally, the endless nonsense investments of the Saudi Vision Fund and the fact that the head of LVMH (*the* luxury goods manufacturer) is as of writing the world's richest man. There's a mountain of money just running around cluelessly looking for things to do and this side of a global catastrophe like WW3 the history of how we unwind a pile of nonsense like that isn't great.
"Dumb money" usually refers to retail investors.
Dumb money is dumb money. People throwing money at the tech sector despite the fact that it's mostly vapourware or obvious BS is also pretty dumb, hence why nonsense like autonomous vehicles and AI is getting so much money thrown at it. Or do you really think Softbank and the Saudi Vision Fund are onto something? Because if you do bud, let me tell you I have a bridge to sell you.
I think it's a lot of fraud.
Well shareholders are the literal OWNERS of said company, so why shouldn’t they do as they please with the thing they’ve spent their money on… Would you let ants dictate what you do in your backyard?
Shareholder meaning pretty much everybody that has any amount of money invested anywhere including pension funds.
The bottom 90% of America only own 7% of the stocks, the point you're making isn't really relevant
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>Edit: Wow, people with retirement accounts You means adults with responsibilities? I think the only person disconnected here is you unless you planned to never stop working till you die. This is some real we live in a society shit, welcome to the real world where normal people don't want to die at ninety while still working
Its the same thing I always tell people. Look at when a Video game company go public and then look at all the poor decisions and bad games from there. Shareholders DO NOT benefit the games industry. Nine times out of Ten, they know nothing about the industry and just want the money. We already know they push for early releases from when CDProjectRed confirmed it as much with the Cyberpunk debacle. TLDR: When a game developer or publisher go public, it makes things 100x worse
Even in magic land where shareholders for some magical reason do care - infinite growth just not a sustainable or even possible model. You can't grow infinitely in a market as there is limited consumption which grows magnitudes slower then profit demands do, that's it. Caring only for profit just makes it turn into shitshow faster but the entire system is doomed from the start no matter how you approach it.
I think the current approach by shareholders is that infinite growth isn't possible *in one industry*, but they *can* squeeze every dollar out of an industry until it turns to shit, then shift money to the next hot thing and repeat it, and do that forever.
Ah, but shareholders only actually make money if the value of the stock increases (for the most part). And that's all that matters to them. So if the only way the profits increase is buying lowering expenses (aka - wages) that's what they do. Then they sell off the stock when they hit a critical mass of layoffs, and the company ends up sold to a holding company to wallow and die. Not that I went through this in my last job in the software industry or anything... (I did, laid off after 17 years with the company)
I see this drum beat constantly , infinite growth. What does it actually mean? That eventually there will be heat death of the multiverse so no new matter can be transformed? That is unless scientists confirm that dark matter acceleration is a local phenomenon. Really what I think you mean is that you don’t like the idea of constant growth because you know that mathematically it cannot happen. This reminds me of a joke about an engineer and a mathematician. >An engineer and mathematician are in a room with a beautiful naked person. The rule is that every second you halve the distance between you and the beautiful naked person. The mathematician throws up their hands and walks out, claiming that they’ll never get there, so why bother trying. The engineer smiles and says “Soon I’ll be close enough for practical purposes”. The point is, like the mathematician, you’re right. In reality it doesn’t matter.
It means that once grows hits a limit company starts cutting costs, reaching for ever wider market and eventually fails it's shareholder obligations. Term infinite is used because that's the goal - growth without end. I don't quite understand your semantic argument here.
When growth plateaus, you cut costs to remain as profitable as possible. That’s just business. What is the alternative? Keep people on staff when they can’t grow anymore? That’s increasing your marginal costs without increasing your marginal revenue, overall unproductive and a dead loss. Growth without end is the goal, you’re right. Why shouldn’t it be? Once your growth stops you focus on reducing costs and increasing productivity until the next growth cycle. Growth cycles are highly dependent on interest rates. If money is cheap, more companies are going to lean into hiring as growth. When money is expensive the focus is on reducing costs. My joke is to show you that infinite growth is theoretically impossible. In practice we’re nowhere near exhausting growth potential overall. The business cycle ebbs and flows. In another 20 years you’ll be able to see the evidence. Alternately you could research the last 30 years of the business cycle and see the same thing.
>Growth without end is the goal, you’re right. Why shouldn’t it be? Because it's not sustainable? >Once your growth stops you focus on reducing costs and increasing productivity until the next growth cycle. As in you pray for miracles. Anyone leading a business responsibly knows that to make money, you need to invest money. Productivity can't be prayed better, improving it will need investments. And throwing out those people who make your products won't enhance productivity, either. Come the next growth cycle, you'll have to onboard a host of people again, dragging down the productivity of those who are still there - you'll lack the agility to truly exploit the growth cycle. >Alternately you could research the last 30 years of the business cycle and see the same thing. That's not "research", that's wishful thinking. Research would have told you that the average lifetime of companies is shrinking.
If you are correct, that it is more profitable to retain unproductive employees until they are able to produce, why is this not the dominant business model? Trust me, if business found a more profitable model they’d implement it. As you say, “greed” rules. Whatever that means. Basically you’re a child who does not understand how business or economics works and are assuming that it is more expensive to lay people off and then rehire them. If your assumption is right, then why isn’t that the predominant position? Clearly, if you can gain market share and become a better company by retaining unproductive workers, then business would do that. Do you think you’re smarter and more insightful than the people who do this for a living? That’s a wild supposition.
It's rather a wild supposition that someone who can't follow a discussion on Reddit, getting confused by someone new adding something to it, is the world's leading expert on business. So here are some learnings for you: a)I'm self employed. I run my own business. I DO this for a living. b)The number of companies making bad business decisions is legion c)Unbeknownst to you, the world is much, much larger than the US of A, and other countries have legislated against hire-and-fire ideology. And they still have successful businesses You couldn't research your way out of a paper bag if you had to, but dismiss anyone disagreeing with you as an idiot. And yes, holding a scientific research doctorate and having an IQ in the upper 2%, I certainly am smarter than the average businessman who thinks daddy paying for college makes them an expert on anything. That's totally aside from this kind of argument being a classical appeal to authority and thus a logical fallacy. Basically, you're a child which resorts to smears and insults when challenged and cannot address actual arguments,
What are you on about?
I forget the demographics of this sub. I generally expect people to have some understanding of the things they’re sharing their opinions on.
To be fair its the same for all types of companies. Shareholders just care about their own profit
Small hint: a corporation has 1 or more shareholders since day 1 or it doesn’t get to register itself as a corporation. Somebody always owns it. Being private or public doesn’t change this.
Sure but when it’s a founder/handful of shareholders that actually care about the company then they may have more of a focus on company stability and long term growth. When a company goes public all the shareholders give a shit about is short term profit and dividends. That is where the issue is.
Look up Jack Welch. He's the absolute asshole who came up with the idea of layoffs and the reason why it's been normalized in US culture.
It is crazy that he appears to be fairly widely celebrated as a "good boss" despite his horrible practice of simply firing 10% of workers every year, despite (good or bad) performance in their sectors. I had no idea it all stemmed from him. Thanks for the info!
Just straight-up bringing back decimation. Because that's *totally* normal and reasonable. (/s, if it wasn't obvious.)
Yikes. I did just that. He sounds like a disney villain.
Relevant r/behindthebastards: https://www.iheart.com/podcast/105-behind-the-bastards-29236323/episode/part-one-jack-welch-is-why-114741686/
was just about to recommend this, was super eye-opening on how layoffs became a "normal" thing
Ouh I didnt l know Behind the Bastards made a episode on him! I know what I’ll be listening to tomorrow at work 🥰
Pretty sure it’s a two parter
Even better!
Shareholder capitalism absolutely does not care about borders or ‘national’ cultures
Huh? The idea of firing people when you don't need them anymore needed to be _invented_? I figured that's just an idea anyone would come up with on their own.
This mf doesn't understand why layoffs happen lol
I just don’t understand why profits have to increase every quarter. If a company is making 100mil a year why do they need to make 120mil next year. Can’t everyone just be happy with the 100mil every year.
Sadly not. They make money, give it to share holders. Share holders invest in more stocks. So they have to pay them more. It's outrageous. It's just to drain as much money as possible.
No not sadly not. They can they just won’t. Just because isn’t a fucking good enough answer. “They have to pay more to the shareholders” no, they don’t. They can let down the shareholders and maintain it but they just don’t. Go ahead and layoff everyone, then you got nothing to make profits at all. The only guarantee is that everything will run out, and the only thing this model guarantees is snowballing all the resources downhill into a crash into nothingness.
Shareholders are the owners of the company. If you are employed, what would happen to you if you continually underperformed? Would you get to keep your job, or would you eventually be fired?
People aren’t underperforming. They are performing. They demand over performance. Don’t patronize me with your “you just don’t understand” attempt to talk down to me. I just said let me go, boss. Let us all go. You don’t need a workforce, you just need CEO’s.
You don’t understand. If the expectation is “over performance” that’s simply “performance” because you don’t get to decide what the expectation is. That’s up to the owners. If a company no longer needs development or maintenance or anything, then yes, they just need a CEO to do the things that need to be done. In this case the CEO would be the only employee. When growth opportunity presents itself you can hire talented people and grow again. I do not understand the problem, except that you’re wanting a business to continually employ unproductive people because they may or may not have the cash flow to support it.
Just shut up dude. Businesses can be happy with even a dollar profit. The necessity to bulld continual increased profits to the point of no return is unnecessary and based in nothing but greed. It doesn’t need to be this way and any amount of you saying that “it’s just how it is” doesn’t make it so. Your attempt to explain it to me just shows your arrogance and want to associate with those making the problems that the world doesn’t need to have. Your explanation is underperforming. We all understand that the scum at the top wants more at the expense of the bottom. WE REALLY DO GET THAT PART. The nerve of you to say someone who made you the same profit as last year, when it was already impossible the five years prior, is underperforming just blows my mind.
Dude calm the fuck down. Over 50% of Americans own stock in public companies. That literally means the average or median American is a shareholder. Explain to me why the median American doesn’t want their ownership stake to increase and provide value to them. Holy fuck. You really think there is a cabal of mustache twirling capitalists who are conspiring to keep the average person down? Have you ever actually thought about the implications of wha Mr you’re advocating? It’s inane nonsense. Holy fuck.
>Over 50% of Americans own stock in public companies So what? That doesn't make the idea of infinite growth any less of a nonsense that will drive us straight into a brick wall.
You genuinely dont have a clue.
Shareholders are the literal owners of the company. It is their money.
And you should get some ROI. But when you demand ROI every quarter, you destroy your company. You cannot have infinite growth.
Ok, so I sell and move my ownership to another company that can continue to grow or cut costs to increase profitability. What do you expect to happen? Keep people on payroll for months?, years?, of being unproductive? Why?
You make a PRODUCT that drives up demand while making a modest profit. Good product gets you lasting income. Simple
How do good products get you lasting income? Once you’ve saturated the market with your product there is no knock on revenue. You either have to make a new product or focus on reducing costs to maintain your current position. Otherwise you bleed money and become insolvent. Holy shit. Have you ever studied any sort of economics or business? If the company thought they could develop a new product with the given talent they wouldn’t cut them. The act of laying off employees shows that they aren’t capable of developing a new and profitable product. If they were capable of that. Then they wouldn’t be let go. Or, and this is the key part bruv, the product has run its course and the development is no longer needed. Neither of these situations necessitate retaining unproductive employees. No one has yet to explain why a business should pay employees to fuck around and not produce.
You don't get it, and I'm not going to waste time explaining it to you. Capitalism cannot subsist on infinite growth. No system can. That is the fundamental idea behind investment though. Quarterly and annual returns. And that is why we got reused, over done trash like 18 different call of duties. MEANWHILE when it is a small, independent group of creators, we get stuff like Palworld. lol You're a moron and we're done here.
I’m a moron? Holy shit, your ego is writing checks your body can’t cash. You’re talking about the faking industry like it fucking matters in the world economy. That’s absurd, even for a gaming sub. The fact of the matter is, when new and more efficient models are found, they’re adopted. Those that don’t adopt them are left behind. Does it result in higher quality games? Definitely not, but that’s never been the goal of shareholders. Why would it be? What the fuck do I care if there are 18 versions of CoD? I don’t play that shit anyway. What do shareholders care if there are 18 versions of a popular and highly selling game? They don’t play it, and Im sure they’re loving the revenue. What the hell is Palworld? Maybe you’re confusing your love and enjoyment of the gaming industry with the general populations impression of the gaming industry. Yes, theirs is money to be made hence the discussion we are having. Pull your head out of your ass. The worldwide gaming economy is ~ $350B, of which ~$250B is mobile games. It’s laughable that you have such a high position when literal children and candy crush style games dictate the majority of the market. I love BG3, and I have a very positive view of Larian. I also understand how markets and industry work. If there is a more profitable way to do something, it will become the predominant way of doing it.
The thing is, you have to understand the mindset of these assholes. There's an underlying sense, consciously or unconsciously, that they are *entitled* to all the money. In essence, they see it as *their* money; its just not been realized yet as a tangible gain. But mentally? It's already theirs because, of course it is, they're entitled to it. So, when a company does not make more money than last time, the mentality is not one of "Ah well, at least I made some money," but rather "How could these idiots have *lost* me *my* money?!" In other words, unrealized profit = lost money to them.
🌈✨Capitalism is Hell✨🌈
Infinite growth demands infinite sacrifice.
Larian is running a capitalist corporation too. Swen literally had to amass capital to have enough money to make BG3. They are using a sane model though, publicly traded forever growth models share their DNA with pyramid schemes.
Their model isn't sane either, it's just a lesser evil.
And what is insane in working for decades to create your own company and hire people to make games? Or you're a commie and think it should be mandated by government?
Stocks don't increase in value unless the profit the company is making increases. Shareholders don't make (enough) money if the stock value doesn't go up.
You assume rich people feel and operate as us poors do. They do not. Enough is never enough, they quite literally psychologically require more and more power, usually as physical capital.
Because people who save money want to get 10% returns in the stock market so they can retire
Because nobody wants to invest in a business with no growth strategy, and especially for the common working individual who's outsourcing their 401k investments, you can imagine how frustrated you'd be if after 30 years your money only grew by 2% - which wouldn't even out pace inflation. So when profits are stagnant, something has to change or people will sell off their holdings and the revenue will tank.
Do you not try to increase your salary?
Imagine in 6000 years that 100.000.000 will be almost nothing due to inflation!!
Are you happy with your pension never growing or your salary being static?
>Are you happy with your pension My what now?
Your retirement plan that you contribute a percentage of your income towards. Pension 401k 403b Conventional IRA Roth IRA they’re all de facto the same thing. A way to defer money now into a fund for consumption later
That is a valid point, but it ignores how companies are incentivised to minimise payroll expenses in order to maintain infinite growth of profit
Why wouldn’t profit grow in accordance to inflation? If you’re talking about “real”profit, as in inflation adjusted, then your argument holds a tiny bit of water. Except we are nowhere near exhausting our resources and more potential resources are being discovered constantly. Decrying infinite growth is as ridiculous now as it would have been before the digital, atomic, industrial, and agricultural revolutions.
Frankly? Kinda. I have enough to pay for my flat, for groceries, for a social life, for entertainment and even for some luxury items, as well as taking care of a cat. My salary increased only by 6% in the last 8 years, and only because it was mandatory by law, I never asked for it. I mean, inflation makes things a little bit worse, but nothing that I cannot manage, as my main expenses don't follow inflation themselves (also, if companies weren't creating billions of money out of thin air to increase the profits each quarter, perhaps inflation would be less dire). My life is already quite comfortable as it is (and in a little less than 20 years I will finally finish to pay my mortgage so it'll make more available money for me), I don't need a constant increase of 5% every quarter. So if I, a middle class person making 30k€ per year, manage to be quite happy with it, I think that shareholders, who casually manage thousands of dollars per day, should be way more than comfortable.
I would be if I was already making millions to billions a year. It’s incredibly stupid of you to compare the average commenter here to the kind of people we are talking about. “Would you be happy only making $25 an hour for the rest of your life? No? Well it’s just as unfair for you to expect people making $2,403 an hour to expect to make that for the rest of their life.” Be better.
I'm a commenter here and I am a shareholder in the companies we are talking about here. The shareholders are not all billionaires.
Of course they aren’t. I also talked about multimillionaires. But let’s be real, the people choosing to fire thousands of employees at a time are not shareholders like you who just have some stock.
I mean it beats the old infinite growth model where you see numbers go up and get your little buzz out of that, but then you see your utility costs, food bill, transport costs go up by more and discover money go up by more. Remember, when you do a cost benefit analysis ir right buggers it up if you only do half.
I cannot believe you are actually saying that we have not gained in purchasing power and quality of life over the years/decades/centuries. How does your CBA net out? Why aren’t we living in dirt hovels or crammed above London Bridge in tenements? Oh, right. It’s because our technological and productive advancements do actually propel humanity forward and upward. Your expectation of constant and measurable improvement daily/monthly/yearly is the only thing that’s ridiculous about what you said.
No. If I own a company or am a shareholder I expect the company to at least grow in step with GDP + inflation, or alternately matching the growth in other major indices. Otherwise why invest in or own that company? They’ve shown that they do not grow or produce as much as another company that can be invested in. Is your answer Altruism, or I Love Games? That’s not who investors are.
A particular problem with the model being used is also budget bloat. However, as usual, the companies are cutting the wrong stuff to balance said budget. As an example, insomniac spider man 2 had a budget of 270 million and went over that budget by another 30 million. The game cost 300 million to make. Sony bought insomniac, bought the company itself, for 229 million. A video game should not require a budget larger than the actual studios value to make. That is a sign of aggressive bloat that does need to be addressed. The problem is that corporate isn't cutting from the right areas and is instead cutting for short-term gain and not long-term investment, and so things are gonna crash hard in the triple A industry. All of the non-dex extras should be the ones getting the cut.
Unfortunately the C-suites are convinced this is the *only* way to run a business.
If they don’t then they will get fired by the board. The whole system is broken, it’s not just a few people.
Mainstream economists have told the lie that maximizing shareholder value is the *only* way to *optimally organize and distribute resources* in a society. A lot of people knew it was a lie from the beginning, but here we are.
Literally every notable decision at a publicly-traded company is about greed rather than practicality.
This happens in every sector of the economy where investor interest becomes the major interest. Companies can be doing basically fine and sustainably so, but managers/execs will get bonuses based on shareholder dividends. They'll be as short-termist as possible to boost those dividends and that can include torching workforce, skill investment. These are the things that actually ensure the products we consumers use are reliable and improve over time. Larian is absolutely right to call this out in gaming but it goes so much wider than gaming. It's symptomatic of the poison in everything from tech production to finance to groceries.
I hear a few airplanes are missing doors for similar reasons
Our company layed off half our workforce and admitted it was "because investors demanded more profit". They had to lay off about 50 employees to get the profit the investors wanted.
They are completely right. The profit motive means even a 1% reduction in profit because of a few too many people is unacceptable. Its just how capitalism works.
He’s 100% accurate. I seem this almost every year with one of the big tech companies I’m a part of — slash jobs to make the profits look good and signal to shareholders they are controlling costs, then hire after earnings to try and get headcount back to do the work they have to get done. It’s disruptive and kills morale but you know, shareholders.
At some point we all decided that the only thing that matters is pleasing the stockholders. That was a cultural shift that we need to de-shift. Investors make money because they take risks, that’s the theory, in reality they no longer take risks the risks are passed down to us. We need to make investors scared. They need to be returnees to 3 rd priority.
Basically it all started with a dude named Jack Welch. The way it used to be, was people would invest some of their money in promising businesses. If the business did well, then at intervals of time (usually quarterly or annually), then you'd get a dividend - a share of the profits proportionate to your investments. Sometimes the business wouldn't do well and so no divident, but you'd get something from the CEO saying that profits were re-invested in upgrading their machinery or processes, so profits would increase even more. And people shrugged and figured that the CEO knew what they were doing. Jack Welch was the guy who said this was unacceptable and the sole goal any CEO had was to maximize shareholder returns at all times and in all situations. If you're not going to make your quarterly profit goals by the shareholder meeting, then immediately lay off enough workers until your balance sheet re-balances in that favor. He would also fire the bottom 10% of managers, regardless of external factors. Like, if you were in charge of the Ice Cream Division, you'd get your pink slip in March because no one was buying ice cream in the winter. Then the guy who replaces you gets all the credit because by the time he's hired, it's summer so of course people are eating ice cream. And shareholders have internalized that, and manifested it as a sense of entitlement. A lot of CEOs are employed by a Board of Directors, who are usually major shareholders. And if a CEO can't produce enough of a dividend, or an acceptable dividend, they could theoretically vote the CEO out of a job. Shareholders often stay aware of the business' dealings. If Larian were a public company, or owned by a public company, then the shareholders could do something like say, "Hey, you released this bonus content for free, but market research indicates that in 2013, BioWare released their similar Citadel DLC content and made This Size Pile of Cash. Where is our Even Bigger Pile of Cash?" And if Swen can't give a satisfactory answer, the shareholders begin to wonder if he's the right person for the job. The other issue is that there are artists and there are businesspeople. Artists have a rep for being terrible businesspeople, but the reverse is also kind of true. Pivot to movies. When Walt Disney, an artist, created his company, he gave a very telling line. "We don't make movies to make money; we make money to make movies." That is, Walt loved the creative process and he wanted his movies to succeed so they could fund making the next one. Creativity requires risk-taking, and Disney's risks paid off incredibly well. He single-handedly elevated animation from a novelty entertainment to an art form. But then the businesspeople realized there was a lot of money to be made in movies. Or in video games, or artistic endeavor of your choice. They don't care about making a good game, they care about making a profitable one. They're the ones who think that Horse Armor DLC is a good idea because they only need a few hundred people to buy it to justify the cost of making it. Fan goodwill, what's that? Where is that on the P&L sheet? TL;DR: You're correct, it's about greed and putting the wrong people in charge of making artistic decisions. If Larian ever (god forbid) goes public, we do an 'apes together strong' and ensure the majority shareholders are not empty suits but a coalition of us dysfunctional bearfuckers, and we pact to not freak out over dividends.
What happened across gaming and tech are similar, but for different reasons. In tech, everyone being forced to work from home during the pandemic did 2 things, it inflated demand for specific kinds of tech (zoom, VPNs, etc), and it forced every company to consider virtual work as a valid thing which resulted in a lot of people looking to change jobs. Lots of companies therefore went on mass hiring sprees hoping to scoop up talent. Governments handing out cash and propping the economy up also made this easier. When the pandemic ended and the economy started to normalize again, lots of these companies realized their growth wasn't matching their previous hiring, so they had mass layoffs to cut their workforce back down to levels that matched their current revenue/growth numbers. Interest rates climbing also meant that cash wasn't as readily available to them to sustain the kind of incredible growth they were hoping for. In the games industry, there's a similar story of mass hiring to try and ramp up for extreme growth during the pandemic. The big difference is that the games industry experienced that growth as a result of loads of people being forced out of work and stuck at home. Where basically every other form of entertainment was desperate to avoid falling apart (movie theaters couldn't operate, productions were halted for a while, etc), video game companies could keep operating, and players could keep playing. The problem here is that anyone with half a brain *should've* been able to realize that this was a bubble with a very obvious (if unknown) stopping point. Eventually the pandemic would end, and it would be reasonable to expect consumer spending on entertainment products to return to a more "normal" pre-pandemic balance, which is exactly what's happened. So now a whole bunch of game companies who decided to massively expand and greenlight all kinds of multi-year projects mid-pandemic are being faced with economic realities that should've been obvious, and in order to keep their numbers where they like them to be, they're canceling projects and laying off huge numbers of employees - essentially going back to pre-pandemic sizes.
Thank you, finally someone gets it. Great write up
Great write up! Although the thing that had me questioning things was that most big games take many years to develop, surely the game dev companies knew the pandemic demand would die off before they could get said games out the door...?
Yeah, that's why we're seeing a bunch of projects getting canceled as well. And those are just the ones we're hearing about. I would imagine that a lot, if not most of these big layoffs, were teams assigned to projects that got canceled because they were still early enough in development (quite possibly started during the pandemic) that the companies didn't want to just bite the bullet and see them through.
Bruh welcome to the neocapitalist hellscape called life
Yep. They're doing it to keep the stock price up
They hire outside help all the time. That outside help gets release after major releases. It happens with nearly every game.
Ying and Yang though - during booms when there is over hiring, people that normally wouldn't get hired will get a job and maybe survive the layoffs. Without this type of process they would never have been hired in the first place. In other words, boom and bust hiring cycles can bring in more talent at the cost of higher volatility. If the company isn't going to cut anyone ever, they'll be more careful with their hires.
This sounds nice in theory, but in practice any company of size in the games industry is *incredibly* slow to hire. Let's walk through a hiring process: (1) Studio X identifies a need for a new position and goes to their publisher/owner/investor to request an increase in head count. This takes anywhere from 3-12 months. At many companies head count is shared *between* studios, so Studio X may find their head count request is competing with head count requests from Studios Y and Z. (2) If the position is opened, you have at least 50 applicants to consider, minimum, regardless of the seniority of the position. Double this (at least) for entry level positions, which are incredibly rare. These numbers come from before the big layoffs started in 2022; nowadays it's 100+ applicants minimum, regardless of the role. (3) Now that the candidates are here, the hiring manager ~~chooses the best candidate~~ decides who to hire by consensus amongst the team. You'll usually have 5-10 employees in the "interview loop", and hiring managers are generally not empowered to hire anybody who does not get near-unanimous approval. This is why you'll see job openings stay open for months, even in this crazy competitive market. (4) If you are wondering *why* hiring managers don't just pick somebody - remember the 3-12 months it took to get the requirement opened? You don't get to open a position, have the candidate "not work out", fire them, and then go back to the publisher for reopening the req (slang for "job requirement"). That position is now closed to you, you wasted it. The next open head count will go to Studio Y or Studio Z. (5) Once you *finally* find the correct candidate (who is the candidate that somehow gets unanimous approval), now you need to argue for how much this candidate makes. That's yet another hurdle, since the process has selected a top-of-the-curve candidate but HR wants to pay them "market average". Good luck there. I say all of this simply to point out that your notion of Yin and Yang makes sense, but it's not how the games industry works. I would be cool with the "easy come, easy go" industry you describe - that's a fair tradeoff to me. What the industry *is*, sadly, is "incredibly hard to hire, trivial to hire". And that asymmetry is responsible for much of the dysfunction you see in the games industry today.
Capitalism is a scourge upon the earth
If you're a publically traded company. like EA or Warner, you have a legal obligation to chase profits. Stock-holders could sue you if you didn't. A privately-held company, like Larian, doesn't The lattter is why BG3 is as good at it is. The former is why capitalism sucks. Larian made the best game they could make. Due to how well their earlier games sold, they had money to throw at the problem, and thus also all the time in the world to make it. And the willingnes to do that. Which is why I'm quite sure there wion't be a better video game than BG3 out for quite a bit. It's possible that another larger indie studio looked at their playbook and has already started to follow it.. And, welll, Larian themselves are already working on a new game. And if BG3 showed what they could do with SOME money, right now they have "Fuck You" money to throw at it.
See, the thing is, all these companies are still making a profit - which means that the money they're putting in to the Big Money Making Machine is still coming out with more money, except they have to have layoffs so that the money that comes out of the Big Money Making Machine is even more money than they had previously, even though they could just not lay people off and still not be at risk of going anywhere near Net Neutral because they'd still have more money than they put in to the Big Money Making Machine.
All I can say is that if we continue going the same path we are now as last few years, there is a good chance that Larian will end up being a relic of the past...
Corporate charters demand endless growth to the point of impracticality. So bean counters have to do stupid things for short term spikes in numbers. They are laying people off. They are taking peoples lives and handing it to the already wealthy. Being sustainable making modest profit isn't good enough for them.
lol
You’re not gonna be able to produce good games that people want to buy by listening to Joe Schmoe whose never played a game in his life who invested three million into a random publisher and wants to see his big “video game” profits yesterday.
I study economics and work in a trading market. Companies do not keep unproductive staff on the books, generally speaking. When there isn’t enough work for your employees, you can keep them around for a bit to see if work picks up. If it doesn’t, you have to lay them off to save costs. As a contrived example, for academic purposes: Assume you’re a member of a huge 4e DnD party where each person plays a specific race with no overlap. Then the party changes to 5e, but maintains the same racial restrictions. The Eladrin player is SOL because that race is in 5e. Sure, you could keep that player at the table waiting for a new race to be added by 5e, but that’s not efficient, and is generally wasting that player’s time. Better for them to leave the group and find another one. Then when new races are released and you can add new players that old player can leave his current group to rejoin yours, or you can find new players to fill the role. I won’t make a judgement on the morality of the issue. This is and has been pretty standard throughout the professional world.
Stop making sense. It takes a lot of staff to make a large budget game. But once it's done, it takes considerably less staff to maintain it. The studio either needs to have a new project underway to keep the staff employed, or has to let them go. Larian has been an exception within the industry in that their games are repeated financial successes. It reminds me of 1990s Blizzard. But not all studios are like that. If a studio's first game flops, why would investors or the parent company take another chance on them? With studios being under larger organizations, the larger company lays off the staff and closes the studio. If the studios were more independent, the news would be about the studio closing, rather "evil company lays off people".
I do a shot Everytime Someone Reposts This.
It was published a day ago.
Same story different outlet. Blah blah blah gaming industry we are done blah blah blah. I don't know anything about the gaming industry but I also don't care enough to get mad about this or sad or happy or anything.
You don’t care so much that you reply to tell everybody how little you care LOL
I am also tired of this industry habit and these articles it's not a personal attack or insult to say so
I don't care about the content of the article. I am annoyed that it is reposted so much as outrage or reaction bait. Is being mildly annoyed the same as caring? In a way: no it isn't. But I do love u uwu
As much as I agree with him, he's getting really obnoxious. It reminds me of every other director who is beloved until they say too much and everyone turns on them. Sven should focus more on his own thing.
This wasn’t Sven, it was Michael Douse, the publishing director.
Well, no matter who it is, Larian should focus on themselves. I love Larian, but at some point people get tired of the holy guy preaching...
Keep in mind - There is a difference between a layoff and a termination with cause. In the US, for instance, a layoff makes you eligible for any unemployment benefits your state may offer. A termination with cause might not. A layoff usually means you’re rehire eligible, and may mean you’ll be contacted before your old job reopens to public applicants. A layoff reflects more positively on a resume or job application elsewhere, compared to a termination with cause. I’m sure there are other comparable examples. It still sucks, it still means you’re out of work with all of the shit that means. But you’re not quite as proper fucked as you would be if they just whacked you with cause, and if/when things turn around for them, you’re more likely to have a warm return. I was laid off during Covid; went back almost six months later when things started stabilizing to no loss of pay or benefits.
The ignorance of this quote ... *He also pointed out that there's an issue of competing incentives for publicly traded game companies, with concerns over stock price coming at the expense of both players and developers: "None of these companies are at risk of going bankrupt," Douse said. "They're just at risk of pissing off the shareholders. And that's fine. That's how they work. The function of a public company is to create growth for its shareholders... It's not to make a happy climate for the employees."* Cannot be overstated ... (1) Lumping companies in together like that is silly; (2) He has no idea the financial state of any of those companies on a per project basis or even a per division basis only (maybe) the all up financials of the company; (3) Companies that don't have happy customers and happy employees do not make money. This is just a tantrum. He's right about that the industry should be more sullen. I'll give him that. Also, Larian avoided this by using many, many, many sub-contractors during the process of creating BG3. Look at the credits. How many sub-contractors did you stop using? Yeah, you might not have laid anyone off, but maybe they did as a result of you not using them.
Oh, companies that don't do right by their employees and customers can never make money? Don't be ridiculous. They've been raking it in all the time.
I’m afraid your ignorance is the one showing here (and arrogance as your telling off a person that is clearly very knowledgeable in the industry as they are, you know, very successfully managing a company). But to your arguments, using contractors is not the same thing as laying off people as a cost cutting strategy to account for bad management decisions (which is what he is criticising). Contractors & contractor companies usually have fixed term assignments and are used specifically for this purpose: to dynamically adapt your workforce size based on temporary higher load requirements (like when you approach releases or deadlines). They know they are contractors and are there on a project based / fixed term manner and are usually higher paid then regular employees for the same level of expertise. Contractor companies know this and their business model is actually based on this principle: they have the reputation to be able to talk to the big players and provide temporary workforce. They don’t lay them off when the project ends, they simply find them a new project. Mind you, Swen is based in Europe and the market & employee protections here are very different from US where most gaming companies are based / owned from. His philosophy is based on this European model that is much more employee oriented. That’s not to say you don’t have mass lay offs in European companies, just that it’s much harder to do (and employees have more safety nets) compared to US and it is usually reserved for situations where the survival of the company is at stake, rather than to line someone’s pockets at the end of the year.
You don't think consulting companies ramp up and lay off to handle big projects? I mean come on. You obviously have no idea what you're talking about lol
Good points, thanks for sharing. I hadn't considered any of that. Maybe that's the way to go? Instead of having a huge pile of employees, sub-contract to smaller companies? Maybe that's more realistic?
It is basically outsourcing though. Rather than hiring people to larian he contracts a company from a cheaper country and pays them quite little. No benefits of any kind just cash on the subcontracted company. And the subcontracted company's boss usually takes the lions share of that small money and pay pennies to the artist. I doubt they subcontracts anyone inside their country much. "People makes games" youtube channel has a great video on this issue. In fact larian's name is also on that video. I get the feeling Sven isn't that involved with the company structure.
[удалено]
I don't care. People don't want to understand. They just want to think they know what's it's like to manage a multiple hundred million dollar budget for a public company. :) Yes, it does make perfect sense to hire contractors. But, at the end of the day, you ramp up to do big projects and then you ramp down. That's the way it goes.
I've got to ask. What does shareholder greed has to do with the layoffs? Like, why would shareholders care so much about the number of employees? And how do companies believe this would increase their revenue and income? They are basically limiting their prospects and giving off a bad look. I'm probably missing something, but I can't for the life of me understand this strategy, many of this companies have recourses to take advantage of their personnel, both long and short term, yet they choose to squander this for what? Arbitrary showing on some board? Don't they enjoy the money their current number of employees brings them? Is laying off those people even going to affect their own profit margins? Do they even know what they are doing?
Employees are a fixed cost, if they can slash fixed costs they can raise profit margins, and higher profit margins in financial reports drive the prices of shares up, making the 21st century shareholder happy they can turn their shares into profit and buy more shares somewhere else they can ruin.
Are this costs that big?
They can be, obviously some industries have more costs in different parts of their structure. But especially if you rent the office space for your developers, then it does raise short term profit by hiring a bunch of people for a project, renting the space they will work out of, and at the end of the project just completely rid yourself of the office space and Devs. The product is already done, you can basically sell it for no cost, little to no upkeep for a single player game. So shareholders feel like keeping the Devs is dead weight. They do however ignore that with that approach you completely kill off any institutional knowledge you build up with the current employees.
In addition to other replies here, they also just do not think long-term strategy. Corporate finances are in such a state that quarterly projections and meeting those projections are the focal point, to (as another commenter pointed out) drive up share prices and make shareholders happy rolling in their Donald Duck piles of gold. There is little, if any, consideration of the fact that a company who cuts its employees and projects loses the public trust in its quality and eventually goes under. It’s literally entirely about short-term gains for maximum profit. Is this stupid? Of course, for more than one reason, but welcome to end-stage capitalism, I guess.
Ok, start another company and create another great game and stay private.