Okta To Lay Off 7% of Staff Because 'Reality is That Costs Are Still Too High' (cnbc.com) 35
Identity management company Okta said on Thursday in a message to employees that it would lay off 400 employees, about 7% of the company's headcount. From a report: CEO Todd McKinnon said in his message that the "reality is that costs are still too high." Okta is only the latest tech company to trim headcount in the opening weeks of 2024. Nearly 24,000 tech workers lost their jobs in January alone, even as many tech companies saw their stock prices continue to grow.
Fire the CEO (Score:3, Insightful)
With a single person gone, you save more than you could losing 7% of your staff.
And you also do less damage to the company.
Re:Fire the CEO (Score:5, Informative)
According to google the CEO only made about $400k last year, 2022 was 32m, 2021 was 12m (most of that was stocks/options). But let's say 20m a year.
So 400 employees * $100,000k a year (remember employees cost much more than their pay) = $40 million a year.
Yeah, they probably over-hired, it sucks for the workers. But "omg the ceo makes soo much" is rarely the solution.
https://www1.salary.com/Todd-M... [salary.com]
Re: (Score:2, Troll)
Well, we could fire only half the people if we got rid of the dead weight on the top. It's a start.
Fire the whole C-Suit and we can probably even hire a few more productive people while getting even.
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Well, Paypal laid off a bunch of middle managers and on up, and they still got roasted for it. Sure a few people at the bottom got laid off, but it was Paypal clearing out a lot of management deadweight as well (enough to actually be notable). And we're not talking "Paypal sucks" comments, just general comments
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Don't get me wrong, a good manager is worth his weight in gold. Even though they tend to be heavyset.
But I've had my share of CEOs in the more recent past, hell, they switch out the C-suit every other year in my company. And time and time again it's the same song and dance. First, they of course all have their own "vision" (and I agree with former German Chancellor Helmut Schmidt in this regard, when someone has "visions", he might wanna get a shrink to look at that problem), and then they do the same crap
Re: (Score:2)
According to google the CEO only made about $400k last year, 2022 was 32m, 2021 was 12m (most of that was stocks/options). But let's say 20m a year.
So 400 employees * $100,000k a year (remember employees cost much more than their pay) = $40 million a year.
Yeah, they probably over-hired, it sucks for the workers. But "omg the ceo makes soo much" is rarely the solution.
https://www1.salary.com/Todd-M... [salary.com]
Whatever you're smoking, please share.
Here in the UK the cost to employ someone including once offs like recruitment and nebulous things like "time wasted" and "productivity loss" it's at best 50% in addition to salary, that's in the UK where employers also need to pay National Insurance. So you're trying to claim the average salary is at least $66,000 p/a on 400 staff. In reality it's going to be less than 50% of the employees salary, especially as costs come off your taxable income.
Isn't it far more
Anyone else get the feeling (Score:4, Interesting)
Anyone else get the feeling a lot of these layoffs are holdouts still refusing to come back to the office? Most corporations cut 1-2% from the bottom every year so they can hire fresh grads, but a lot of these numbers are way higher than the norm.
Re:Anyone else get the feeling (Score:5, Informative)
Anyone else get the feeling a lot of these layoffs are holdouts still refusing to come back to the office?
Okta has no RTO mandate, so no, not in this case.
Most corporations cut 1-2% from the bottom every year so they can hire fresh grads
Typically, companies lose about 20% of employees every year due to job hopping. So there's always room for new hires.
but a lot of these numbers are way higher than the norm.
That's because of selection bias. Only the big layoffs are news. You don't hear about a dozen people losing their jobs or a corporation laying off no one because that isn't newsworthy.
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Most corporations cut 1-2% from the bottom every year so they can hire fresh grads
Typically, companies lose about 20% of employees every year due to job hopping. So there's always room for new hires.
Where did you get the 20% number? That seems awfully high for yearly attrition.
Re:Anyone else get the feeling (Score:5, Interesting)
Where did you get the 20% number? That seems awfully high for yearly attrition.
BLS says the average job tenure in America is 4.1 years [bls.gov]
So, actually, about 25% quit or change jobs annually.
How long have you stayed in one job?
My longest job was for 9 years, but I've had several in the 2-3 year range. When I left the 9-year job, there wasn't a single person in the company who had been there as long as I had.
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I followed your link but it is for "wage and salary workers."
What other kinds of workers are there?
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No, I get these are panic hires from the 2021-2022 "TECH SHORTAGE!" idiocy and companies are just now realising there never was a shortage and they never needed the inflated head count.
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A lot of them are because Wall Street rewards layoffs, whether they're wise or not (no comment on whether this particular one was). Cut staff, stock price goes up, board of directors and shareholders are happy. Cut more staff, line goes up more, wow this is great!
Re:enough data now? (Score:4, Informative)
> someone said that one company firing people does not make a meaningful statistic
There's a lot of young people that feel invincible and have never been through layoffs before, nor do they known the signs of a major economic downturn. I've been through several starting in 2000. Weird because 24 years ago doesn't feel like 24 years ago.
I think my generation weathered it because prior to the 90's, we did other work. Networks weren't common place in the 80's. Prior to getting into tech in 93 when I was 20, I spent the previous 2 years doing hard labor, roofing and landscaping. Prior to that, a lot of odd jobs like dishwashing/waiter/paperboy. Was thinking the other day how when I was a kid, kids had those options. These days they say, "Kids don't want to work" but my kids desperately want to work.
I'm not sure how this generation is going to weather it. Not saying they're not capable, just those jobs are GONE. People make careers out of what used to be temp/summer jobs.
Re: (Score:3, Interesting)
The number of people losing jobs will accelerate now.
Maybe. Every time I think it's the big one or the recession is about to hit, the Fed deals some more monetary heroine and the Wall Street junkies push new highs. Yes, I know it cannot last forever, but it can last long enough to make anyone planning for recession very uncomfortable. It's the whole "they can stay irrational longer than you can stay solvent." Plus, this is an election year. The incumbents will be willing to do anything to push the crash to the next guy's watch.
I am not sure if they will ever stop until there is a dollar crisis.
As you say, they won't. The prob
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okta net income for 2023 was minus $815 million (Score:5, Informative)
https://www1.salary.com/OKTA-I... [salary.com]
Indicates Okta median employee pay is $233,825 which is a big part of the problem.
For approx 6,013 employees that is approx(This is wrong as it is the median not the mean but I can't find the mean) $1.4 billion.
Total board pay cash+equity was about $50 million
https://www.macrotrends.net/st... [macrotrends.net]
Shows the companies net income has been negative since 2015(earliest date there is data for).
Net income got much worse in 2022:minus $848 million, 2021:minus $266 million
I do not understand how companies survive for so long with such large losses.
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It likely goes back to 2008. The broader global economy never actually recovered from that recession. It was only governmental spending and other handouts in 2020-2022 which pushed it past the line.
The reality is (Score:3)
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Re: The reality is (Score:2)
Bubble pop (Score:2)
We had a 2-3 year tech bubble that started with the WFH craze of early lockdown restrictions, and continued to gain head with early GenAI/LLM innovations/releases. Everyone was hiring gangbusters to "keep up". The costs associated were offset heavily by the increases in productivity people encountered from WFH.
We are now in a collapse period of that bubble, reverting to (effectively) post-2008 stagnation/stagflation and reflecting more of the broader economic state, where things have slowed down or stopped
The fact that Okta still exists ... (Score:1)
... is close to a miracle. Their core product is basically a commercial OIDC service - something a group of smart highschoolers could probably set up - correctly(!) - in a week - which they at least twice managed to set up so broken that they got hacked and leaked critical OIDC data. How Okta even still is a publicly traded company is beyond me.
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If you read the info about the breaches, they didn't set it up "so broken," rather someone missed perm
What's old comes back again (Score:3)
To quote storeis from the nineties, "CEO of company X downsizes until Wall St. stops rewarding them with higher values on their stock options".
layoffs = less quality, innovation, service (Score:3)
Over-hyped? (Score:2)
I remember when Okta was pretty new.... They kept inviting me to free lunches or dinners where a sales rep would "teach" you all about the great things it was supposed to bring to your company.
Nobody I knew in I.T. had a very high opinion of it. Where I worked, we just implemented Azure SSO and called it a day. I feel like that's how it played out in a whole lot of other companies too?
I haven't even had a reason to look at their offerings any more closely in years so maybe I'm completely missing something.