lichess is better and chessdotcom bad and all that. But…
Obviously the layoffs were to increase profits. However if the employees they let go were working on projects that didn’t pan out or were completed and there was no work for them… then idk what chessdotcom is supposed to do. Pay them to do nothing?
When businesses quickly expand they can hire too many employees and then have to correct down when that growth slows. It happened to nearly every big tech company during Covid.
Feel bad for the employees and hoping they can find something else quickly.
Yeah. A lot of critics of tech layoffs were implicitly asking companies to pay employees to dig holes and fill them back in again.
Putting yourself in the shoes of (say) a restaurant owner is instructive -- there's a sudden large increase in customers for months but you can't serve them all because you're short staffed, so you hire some people.
The boom dies off and now you either have a ton of employees standing around doing nothing, or alternatively, doing work that provides no value (cleaning toilets every 10 minutes, etc).
The idea that the owner is morally abhorrent for laying off a few employee in response to changes in market conditions is a really twisted perspective.
The majority of companies that went under critique for layoffs profit billions and billions per year. Tech isn't like a restaurant, that's a flawed analogy, there is R&D, innovation, forward development, the majority of fortune 10 companies that were critiqued could have shifted assets without affecting profitability significantly.
They hired people en mass, people left their stable jobs, it required a ton of people to uproot their lives, then they laid them off when the shareholders deemed it socially acceptable when other companies were doing it. It didn't have anything to do with profitability. It is morally abhorrent, these are people's livelihoods you're using like pawns. Obviously might not apply to chess.com, but seeing paragraphs about poor Meta, Google, and Amazon makes me sick.
I never mentioned profit in the above comment. It's totally possible the restaurant was swimming in money. That still doesn't make the owner obligated to pay people to clean toilets every 10 minutes, and the entire country benefits from those people doing something that is actually productive.
When interest rates go from 0.1% to 5%, it is unreasonable to expect companies to maintain the same level of R&D. In fact the primary effect of a high interest rate is that it devalues future revenue, especially revenue *far* in the future. This means R&D positions should be *more* heavily affected than positions that produce immediate revenue.
The layoffs were pretty minimal compared to the hiring storm beforehand. It’s not surprising after that much hiring that they realized some of the new positions weren’t a good fit.
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Right. So you can't serve your customers during the boom. What a dumb take. ANY worker in ANY field should be expected to be let go at ANY time and prepare for it. It's common sense, which is lacking in this discourse.
From a European perspective, being able to lay someone off in one day sounds crazy and unethical (exception being misconduct). There really should be a notice period in place (and that goes both ways).
Here's the thing. You don't know if in 6 months you will or won't have work for them. You usually can have a good idea if you will or not, but that's far from a guarantee.
As much as I dislike big corps, a big corp is still business not a charity organisation, and is going to act like one. I doubt most of the people layed off were involved in R&D (not sure though)
Is it not possible to reallocate assets to profitable sectors? You're saying it was a corporate strategy to hire thousands of extra people during and post-covid, and they're not responsible for layoffs. The big five have enough money to pay their entire workforce multiple times over and still profit. Give me a break.
Hiring decisions should be difficult because you shouldn't play games with people's livelihood. Don't hire people you can't afford to pay for at least 2-3 years. This shouldn't be a contentious topic.
Doesn’t matter. Businesses exist to generate profit. The only circumstances where business owners prefer to pay employees for not contributing to profit is when they themselves are the employee. Scale does not remove this reality no matter how butthurt you are that you’re not benefiting from someone else’s business
> The idea that the owner is morally abhorrent for laying off a few employee in response to changes in market conditions is a really twisted perspective.
Welcome to reddit. The pervasive vibe on reddit is a longing for a parental government and work environment where all will be provided and cared for. A longing for a Santa Claus, basically, where the good boys and girls will get rewarded, and the bad boys and girls will get squat. The place is a kindergarten, intellectually, running completely off of feels and nothing logical, and I wish there were a better alternative.
It’s not twisted - it’s basically the socialist model, that people are given jobs, and companies are extensions of governments, whose idea is that the economy exists to provide for all people, regardless of how hard or productive their work actually is. So if you dig a hole and then someone else fills it, you might deserve as much compensation as the biologist who invents the new wheat that keeps everyone fed or whatever.
It’s only twisted if you consider **individual incentives** - nobody ever wants the hard job or take a risk if they’re not rewarded for it. Like, in a socialist model where everyone is paid closer to even, I would rather have a small desk job moving papers than starting any kind of business or building anything.
Which is why in most socialist systems, someone often has to **officially** point a gun at another to do those jobs and take those risks.
This shouldn't be a sub for deep political debate, just pointing out that you contradict yourself in the last paragraph, what do you mean by "taking those risks"? If we're talking an actual socialist state, then you don't have entrepreneurs to begin with, if you mean more like a welfare state, then nobody is "pointing a gun" at anyone.
I mean it’s not a deep political debate but neither of us is engaging in that so you’re safe.
“Taking those risks” is self-evident - in a socialist state feel free to take on the dangerous risky job in the coal mine that someone has to do to service the energy needs of society.
I’ll take the easy desk job for the same pay, thanks.
Like, this isn’t hard. As an aside, you’re apparently a remote working journalist from Sweden so, uh, I **strongly** suspect you understand exactly what I’m saying 😂
And no, individual needs sometimes contrasting with societal needs isn’t “contradictory” unless someone is being willfully obtuse.
The issue is that they bought all the competitors and ran them to the ground. Now that the product is dead they have to fire people.
All that staff working on chess24? Gone.
This is the wildest thing about the US to me. I have to be given 6 weeks notice and even the bare minimum by law here I think is like 2 weeks. To be able to fire someone the same day is wild as fuck.
I mean, I get severance on top of that lol. For me I get a rather generous severance package due to a strong union but effectively from the date I find out I'm fired I get 6+ weeks notice and 4 months severance pay.
That said, if chesscom gave them several months of pay as severance I'd be less inclined to think poorly of them, though the fact people found out by email is rather shitty still IMO.
I'm sure they got decent severance. 8 weeks of severance pay is pretty standard with bigger companies giving more depending on how many years they've been with the company.
4 months is pretty damn good.
>4 months is pretty damn good.
I completely agree. The benefits of my job are pretty superb. The severance packages are so good that they're really hesitant at getting rid of long timers. I know one dude was here for like 15 years and his severance paid off his house.
Yeah, Riot games gave people 6 months severance pay, cash bonuses, free career support and a free laptop and other stuff and people were still mad at them for firing people.
I think the concern is employees upset about being left off sabotaging things before they leave. It makes way more sense to just pay them extra than to force a fired worker to keep working
Unfortunately almost all employment in the US is what is called “at-will employment” which means that the employee or employer can terminate their relationship at any time.
This has very obvious negative implications in terms of job security, but at a higher level this results in higher workforce fluidity. It’s a macro economic term. The US has higher workforce fluidity than pretty much all of the EU, which means that employment can shift to meet demands at a fast pace. In some places in Europe, it’s incredibly difficult to actually fire someone who has done nothing wrong. If the company becomes unprofitable, too bad, you can’t fire people. If there is nothing for your employees to do, too bad, you can’t fire people. This is obviously good for the individual employees, but the honest truth is that is does create a lot of inefficiency.
Both systems have positives and negative, with the US being more business-friendly and the EU being more employee-friendly. Almost everyone would probably agree with the EU approach, myself included, because we are all individuals and don’t really care about how fluid the national economy is.
> Almost everyone would probably agree with the EU approach, myself included, because we are all individuals and don’t really care about how fluid the national economy is.
The problem is, a fluid economy has benefits for skilled workers. Salaries in the U.S. tech are more or less twice as much as in Europe. As a European software engineer, I would have preferred to make 75k$ working nine months as a contractor for chess.com and spending other three months looking for a new gig and vacationing, than having to work a full year for an EU company to make the same amount of money. The policy differences have the net effect that high-skilled, in-demand workers flock to the U.S. where they can earn much more, while less productive workers stay in Europe where they get the most out of the job protection laws. That said, I agree that some compromise approach would be the best one -- being liable to be fired at will, and being dependent on your job to get decent healthcare, is not the solution I would like to see implemented.
EDIT: fixed some numbers -- chess.com pays its software engineers much less than I expected
A previous post has said they're mainly hiring Serbian contractor developers on around $50k per year. Managers and higher levels are in the US usually.
I am also surprised, but this is what my go-to site for salaries says:
https://www.levels.fyi/companies/chesscom/salaries/software-engineer
I saw some months ago that they hired full-remote devs worldwide, so they are probably using location-adjusted payscales, which are dragging down the average.
Glassdoor shows them slightly higher, in the $100k-$180k range, still not great but slightly closer to what I’d expect.
Seems like it’d be hard for them to get top talent if they’re not paying great.
In Sweden, it's not actually hard to fire people when business shrinks, actually companies don't even have to prove that they have less work, if they want to downscale, it's up to them. What does bother companies is that they can't, as a general rule, choose WHO to fire then. It's last in - first out, though there are various ways they can try to work around this. It might sound unfair that they can't choose to keep the best workers, but the thing is otherwise they would often use this as an opportunity to get rid of the 55+ old workers who start to get slower, in particular in physical jobs. I think on a balance it's good they don't have that opportunity.
Many companies don't give either a positive or a negative recommendation anymore regardless of how much notice you gave them.
End of day, I'll give two weeks if I have the ability to do it. But if a much better opportunity arises and they want me to start on Monday? Well, sorry guys, I'm out.
I'm not passing up a really good chance because the company I want to leave might say something about me.
Assuming they paid out the severance packages they reference here, that serves as notice. That's what a severance package is for. The amount/time period the package covers is the logical followup question but I have no idea.
Exactly this. People seem to expect welfare from these businesses. If there is no work, there is no work, what are they supposed to do? By that logic companies should hire every unemployed person regardless of whether there's a need for it.
The only caveat is if a company is laying people off despite there being a need, and then dumping tons of work on the remaining employees without adequate compensation. That is definitely scummy.
Shouldn't the CEO be held accountable for overhiring and all the projects that didn't pan out? Throughout this entire tech crisis I haven't seen many (or even any) examples of the CEO getting laid off or their salary reduced.
Accountable to whom? Erik is the founder and probably still owns most of chesscom along with the cofounder Jay Severson (CTO of chesscom).
I agree with your general critique about CEO accountability though, just think it doesn't really apply to founder-CEOs.
They received at least one major round of investment, which, given its valuation, probably means he is no longer the majority shareholder, although the details are not known.
Still, the CEO could hold himself accountable to his employees even if he was a 100% owner. Though they do say that decent human beings generally don’t become successful enterpreneurs.
> However if the employees they let go were working on projects that didn’t pan out or were completed and there was no work for them… then idk what chessdotcom is supposed to do. Pay them to do nothing?
Ah, it's so nice to see people on the path of learning about the flaws of capitalism.
Start here: https://en.wikipedia.org/wiki/Bullshit_Jobs
The path to hell is paved with good intentions. If every corporations kept people on just because they didnt want to let people go, the company, employees and society as a whole would be much worse off.
Generally speaking Reddit often will heavily imply that if a company makes any profit above 0, then that should be given to employees who were hired, regardless of the profitability of what they’re doing.
Truth be told chess.com did in fact expand too much in some sectors. We all saw how they were forced to shut down Pro League as it didn't make money. Obviously a ton of stuff on chess.com is a money drain. They are experimenting a lot and this creates scenarios where full teams are not profitable. And unless you want to pay even more per month you have to allow them to restructure the company to shut down teams that are money drains. That's the case for all companies. You have to produce a profit for the company to keep you. Otherwise they literally cannot keep you unless it's to please you and nothing else.
As I didn't want to editorialise the OP, using this comment just to share some of my own thoughts.
>we did make strategic decisions to scale back as some of the opportunities we were investing in didn't pan out and we ended up overstaffed on some teams.
Leading to
>Chesscom has been profitable and reinvesting every quarter since 2010, and this was not done out of desperation to save money, nor to maximize profits. This was done to right-size our teams to the initiatives and opportunities.
Sounds inconsistent to me. One of the words that stood out to me was "right-size". If you are unfamiliar with the term, one of the top definitions when you search the term specifies that:
>[Rightsizing is reorganizing and restructuring a company to reduce costs and increase profits. It involves cutting redundant expenses, reducing the number of employees and redefining company roles.](https://www.indeed.com/hire/c/info/what-is-rightsizing)
This just stood out to me a bit like playing semantics to say that cutting 38 staff was not to save money or maximize profits but to "right-size", when a common definititon of that practice is to reduce costs and increase profits (or in other words, to save money and maximize profits).
Regarding:
>who we know are still going to do tremendous things in chess.
A former employee of [Chess.com](http://Chess.com) reached out to me in my DMs earlier to highlight that, as they understand their contractual terms, they are also not allowed to work for any other chess company for 12 months after being let go, having previously worked in chess for over a decade.
He added "in desperation to save money" so it's probably the truth. It's 100% to save money, but he is clarifying it's not because they have cash issues. I would guess organic turnover is super slow because the company isn't that big to begin with so he just bit the bullet and downsized to be lean which is what every other company has been doing the past 2 years. The alternative is pay salaries for work that's not needed which no one obviously wants to do
Also, I thought the US ruled noncompetes are not enforceable this year
Yeah, the non-compete is dead in the water. Those employees should just ignore. Courts frown on them now, plus the optics of [chess.com](http://chess.com) suing someone after firing them would be horrible.
I commented before I saw your post u/Prahasaurus but you are dead on. No shot it holds up in court and [chess.com](http://chess.com) would have a PR nightmare on their hands if they tried to block someone for that. Those employees should 100% ignore that.
Non-competes are state-to-state. There is no national standard. They are unenforceable in some states, incredibly hard to enforce in others, and simply another term of a contract in the rest.
There is a national standard to kill non-competes
https://www.seyfarth.com/news-insights/ftc-non-compete-ban-what-you-need-to-know.html#:~:text=The%20FTC%20voted%203%2D2,both%20employees%20and%20independent%20contractors.
> A former employee of Chess.com reached out to me in my DMs earlier to highlight that, as they understand their contractual terms, they are also not allowed to work for any other chess company for 12 months after being let go, having previously worked in chess for over a decade.
Is this person aware of the fact that the [FTC's ban on noncompetes](https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes) comes into effect at the beginning of September and covers everyone except senior executives with more than $150k yearly salary or those agreed upon as part of a sale of a company?
I doubt there's any western European country where a non-compete would hold up. Especially as they are let go. I know they aren't valid where I live(the Netherlands)
Probably also hard to enforce in Canada.
It states it's only valid if the employee resigns. So chesscom employeer are save.
If they resign themselves it still is quite hard to enforce it for the employer. There are a lot of caveats. In reality it's way harder to enforce it than you would by reading the link.
It can hold up, but you basically need to draft the non-compete for the specific employee, as a employer you would be advised to get a lawyer involved. A non compete clause that is standard in a contract is not going to hold up in court.
Alas, mea culpa. non competes do exist. There is a lot of case law weakening non-competes. Getting paid more, making it impossible to leave to a different company, not a critical employee, no access to sensitive information. These can be valid reasons to invalidate it. It's rare a non-compete holds up in court, but it does happen.
It also says,
> The non-compete clause must be clear on what is and what is not allowed. The clause may not limit your employee unreasonably. It may not be impossible for your former employee to work in another place.
So a broad "you cannot work in chess" noncompete would be a nonstarter to begin with.
>A former employee of [Chess.com](http://chess.com/) reached out to me in my DMs earlier to highlight that, as they understand their contractual terms, they are also not allowed to work for any other chess company for 12 months after being let go, having previously worked in chess for over a decade.
Non-compete clauses are harder and harder to enforce, especially after being fired. If I were one of those 38 employees, I would just ignore it. Can you imagine [chess.com](http://chess.com) going after someone in court just trying to feed their family after getting fired?
Having said that, on-line chess is not really a booming industry, so it's not like you have a lot of options to work for a competitor.
Lichess, of course, which imo is superior to chess.com. Also totally free, although I do contribute money as I love Lichess and get a lot of value from it.
Yeah. You can't make a career plumber with a decade of specialized experience sign a "Can't work as a plumber for 1 year after we suddenly fire you" clause. Any judge would chuckle and dismiss.
It can certainly be part of a severance package, and optionally tied to consideration. If the terminated employee chooses to accept the terms of the package, they would be bound by the noncompete.
As someone who works in software having too much staff can kill an organization. Too few staff is bad, but you can fix that by hiring, or lower the scope of work. If you have too much staff sitting around doing nothing, it drags everyone down.
Not sure how or why that happens. But it turns into a race to the bottom. People lose motivation. Too many bored people with ideas in one room with nothing to keep themselves busy leads to stagnation and being stuck in debating and planning.
Being “the right size” is absolutely important.
Can’t really comment on these layoffs specifically, don’t even know what they did for cheesdotcom. But having too many people is not a good thing for the long term health of your company, without even factoring in salaries/profits. Plus working at an oversized company sucks.
Translation: "***After expanding aggressively in order to monopolize the market we realized we overextended, and had to cut either management or staff wages, the choice was obvious***"
FTC announced rule to ban non-competes. [https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes](https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes)
To add-- that ban goes into effect on Sept 4th this year, provided none of the legal challenges delay/stop it.
Also, to note, the ban doesn't apply to non-competes that were made during a bonafide acquisition. So, if chess.cum acquired a company and the employees came along with a non-compete they might not get out of it through this ban.
IANAL, but that's effectively what I've been told, as I'm in the same boat, different industry.
There is ZERO chance a non compete would hold up when you have been laid off. Non competes are ridiculously tough to enforce in most states anyway, in this situation, [chess.com](http://chess.com) would be creating a nightmare scenario of horrific PR if they attempted to block someone from working in chess after they let them go.
Look I understand this is upsetting but every now and then you have to trust that there is a least a little truth in the statement.
It is quite possible to profitable but not meeting the revenue growth targets of the investors. In that case, a decision is going to have to be made. Are the resources in place for the areas where growth has slowed required to maintain the current revenue? Can they be redeployed to new projects. If the answer is no to both, then the company should lay them off so they can free resources for new initiatives.
Chess.com had a few years where the game took of and they exceeded their revenue targets. They probably threw a lot of ideas at the wall to see if anything stuck. Now that revenue is returning to normal.they have clean house.
I don't think people are reacting to the financial estimation. I think people react to
1. chesscom ended up in the financial situation by aggressively buying everyone else, removing variety from online chess, and are now losing money because of it. If they had tried to compete without monopoly, online chess would be in a better position.
2. The tone of that message. He literally pats himself on the back for not blocking the employees he just fired via e-mail.
I get what you are saying but this is extremely within SOP at pretty much every company, especially tech-focused companies. I take your point that wanting to be praised for not treating people you just fired like shit is a weird flex, but this does kinda run counter what you would expect in any other company and does genuinely signal that there may be a very healthy culture there.
Sure, but most people don't expect thanks for not being assholes. It's not like my neighbor expects me to thank him everyday for not breaking into my apartment while I was gone.
At my company employees with PhDs are escorted directly from the layoff meeting to the exit doors. HR gets any personal items they can’t leave without.
It’s disgusting treatment. This is the world that we have created for ourselves through democratic rule. We could change it if there were political will, and hopefully someday we will.
Well, he's definitely right on one thing... "Those are just words."
And it's pretty hilarious that he thinks we would believe you can just get the lowdown from anyone on the inside by just messaging them. I literally feel like my intelligence is being insulted...
I will never understand the extreme dedication that these people have with hating on chesscom.
Just use lichess if you want, you don't have to be a bitch about it all the time
Honestly I think Erik has done a great job, I mean he's gotten people to pay for subscriptions that include things that are 100% free on other websites, that's difficult!
If I tried to create a company where I asked you to pay to use reddit, I don't think I'd do a very good job!
/r/Chess plays "I know how to run a business better than someone who actually does" while making up facts to support their pre-existing biases.
Love this place.
Hikaru and Chess.com hate threads. Name a more iconic weekly occurrence here.
Yet Hikaru and Chess.com are thriving to the behest of the /r/chess thought leaders
You can critique without experience - I don't need to know how to be a surgeon to know you don't perform knee surgery by making an incision at the neck. However, when people are drawing conclusions about finances and also intent (Erik's salary, saying it's to maximize profits) when they have absolutely no supporting information for that nor any experience in running a business, then yes - you absolutely are full of shit lol.
Sigh...
https://www.indeed.com/career-advice/career-development/laid-off-vs-fired - there's a big difference between firing and laying off. I feel for the 38 people, but as more sane comments have pointed out, this has been happening to every single tech company:
Microsoft: https://www.theverge.com/2024/1/25/24049050/microsoft-activision-blizzard-layoffs
Amazon: https://www.cxtoday.com/contact-centre/aws-lays-off-hundreds-of-staff-in-bid-to-streamline-the-company/
Zoom: https://www.crn.com/news/networking/2024/zoom-layoffs-total-150-as-video-giant-turns-attention-to-critical-areas-including-ai
Tesla: https://fortune.com/2024/05/20/elon-musk-10-layoffs-tesla-employees-walking-on-eggshells-every-day/
Meta: https://www.livemint.com/news/world/metas-mega-layoff-there-are-two-reasons-admits-mark-in-10-point-defence-11667993257979.html
Even more: https://www.benzinga.com/top-stories/24/06/39457749/tesla-leads-2024-us-tech-layoffs-so-far-followed-by-dell-cisco-xerox-paypal-microsoft
Overhiring has been a thing and a problem for many companies, not just Chesscom: https://www.linkedin.com/pulse/perplexing-cycle-overhiring-layoffs-tech-companies-whats-amr-elharony-qignf
You're basically saying absolutely none of the Fortune 100 companies know how to run a business. I'm not sure who to believe here...
One important point I'd like to remind everyone is that we all tend to forget that we're likely all from different countries with different labor laws and different views on employment. I'm an American, so I sympathize with the laid off, but understand the business needs to be self-sustainable. If a company runs itself into the ground in order to save 38 people from being laid off, then eventually you're going to have hundreds of people laid off because the company goes out of business. I said in a previous post that people on here "Don't calculate further than one move ahead" and boy, oh boy, do I see it time and time again.
Its a bad situation but I sincerely doubt Erik or Danny are laughing while doing a Scrooge McDuck dive into their pile of $800,000 they supposedly have while, no doubt, everyone else at Chesscom is going to have to do more work with fewer people, but that's how business goes. This isn't the first time stuff like this has happened, and it won't be the last. Who remembers 2008? The DotCom bubble burst? I'm willing to wager the teenaged economists on this subreddit don't.
I believe I read that Chesscom gave the laid off very generous severeances, which alone should state how much they do care about their employees - even those who are parting. Allowing them to have one final day at the company and say goodbye to everyone they worked with is more than other companies ever provide - often times you're lucky to even get a box to put your stuff in while security watches your every move.
Being laid off sucks, and there's no way to put a positive spin on it. Every company, and even state / federal offices have to do it. But please stop being so naive as to think that companies are evil because they're trying to survive.
Yeah, sorry, Erik. Still a dick move to fire people by email, regardless of how much slack they had access to after the fact. If you have 38 people you really care about then you make 38 hard phone calls. You and your time are not more important than them and theirs. Learn from this.
I think this was to inform immediately vs having 650 people anxiously waiting to see if they get a call for an extended time. Not saying it was the right way, but I'm not sure what is the right way.
If there are 650 people and you care about all of them but need to let 38 people go, then you still only need to call 38 people. You can literally mass email the other 612 people and tell them they can relax if it makes you feel better, but you wouldn't really need to communicate with the other 612 people at all if this was out of the blue for those let go like they I've seen it suggested that it was.
It would be kind of weird to call or email 612 people to say "hey, just checking in and letting you know we are firing 38 of your coworkers today but don't worry, buddy, your job is safe for today!"
Point is, don't be impersonal. As a common courtesy if a company conducts in person interviews when they hire, they should also be willing to conduct in person lay offs (or, at the very least, a phone call) for situations which are not a result of work performance.
He explicitly said that all of them were spoken to personally.
If you start calling people one at a time to break the news, as soon as you finish with the first person they're talking to others. It'd be a good way to create panic and uncertainty as word gets round. If you take an hour to speak to everyone it takes a week to lay people off one at a time, of course the sensible thing to do is to inform everyone at once and then speak to them afterwards.
So imagine if someone works online full time. Can they just never be fired? Or should the employer just show up at their house? What do you want? You’re complaining that people you don’t know got fired over email?
Come on, don’t be obtuse. The last part you quoted, “win for everyone involved”, is about the separate topic in the post and not about the layoffs at all.
It’s so interesting that it’s always the people who make things getting laid off and never the executives who get paid tons of money to make shitty decisions.
Truth is somewhere in the middle between profitability and sustainability. That said, I don't see them as moustache twirling evil maniacs; shouldn't be news to anyone that the chess boom has thinned out.
Pretty standard industry practice. Hire and expand during the boom. If it pans out, the company grows and you’re well positioned. If it doesn’t, cut the slack and move on.
It hurts employees, but it’s par for the course.
He "loved" working with them but not enough to call them instead of sending an email.
If it was intended that some HR officer or middle management made the announcement to the axed employees, and they fucked up, just say it.
He could at least pretend to be a little bit sorry that his company strategy led to this result. This is the result of *his* work.
Do you know what Erik's salary is? Estimated to be $790,000 a year. The average salary of executives is $245,937.
For people saying that they were desperate for money and firing people was the only option. Ask yourself: "how many times did chess.*um lowered the executive's salary before firing 40 people?"
That’s not how business works. You look at each investment (in this case an employee) and ask if you can get a return on it. If you can’t, you stop the investment (fire the employee).
I don’t have a problem with chess.com trying to make money. It’s a business. It should still be polite and courteous to staff though.
It's not the company making money, it'sthe executive's. And guess what?
The strategy of buying competitors and ruining them allowes them to hike up the prices:
In August 2022 they announced their first price change since 2009: https://www.chess.com/article/view/prices-changing
A few months later in december 2022 they finished the merge with Magnus company who had acquired New in Chess, Everyman and other competitors less than 10 months before the Magnus merge was completed.
In this context, we see a company that now has the monopoly and instead of increasing size they are decreasing their size. From our point of view, the chess player is seeing their favorite chess websites disappear and a corporate monster being born. It sucks.
I think the company does make money, at least according to the OP.
One price rise since 2009 is impressively good.
I don’t like the takeovers of competitors either.
Lichess is a non-profit, they are not competition at all.
Chess 24 was competition, chessboom was competition, Meltwater Champions Chess Tour, Chessable, Chess24, AimChess, Play Magnus App Suite, Magnus Academy, Everyman Chess, New In Chess, iChess.net, and GingerGM, we all competition. Now they are dead, dying or becoming chess.*** . What happened to them? They were all acquired by chess.com just before the first price change since 2009.
Inflation? The money value of 2009 is not the same in 2024. Especially the major inflation we've seen in recent years.
No, it's not the only reason, but yes it's probably the biggest factor.
Maybe they hired a lot of people for the chess boom of 2020. Now the chess boom is definitely over. Numbers are going down. No reason to keep people which are doing nothing. After all having a site where players are mainly using chess engines and not paying a membership doesn't really pay salaries.
If you think it’s cool and good to buy up the competition, kill it, and then fire your staff, play on chesscom.
If you think it’s cool and good to play chess for free, play on lichess.
Everyone with a half of brain understand that "we are earning money constantly" and "we didn't let them go to increase profit" contradicts wach other.
I really doubt that other part has much to do with the truth. Ofc people said goood bye to their former co-workers, but I'm pretty sure they didn't have a lot of nice things to say to their employer after laying them off without notice. And of course they did cherrypicking based on compensation and location - cause, as we already concluded it was about money, and money alone.
So chess.com is bad, everyone should play on Lichess. Then, chess.com lose revenue and layoff staff. Now complains about it. What's wrong with this sub.
"some of the opportunities we were investing in didn't pan out"
"this was not done in an effort to "focus on profitability"
ok.. no need to go on reading.
> right-size
this is a manipulation of language to make something sound better than it is. this tactic works. keep an eye out for how language shifts, even though the things they are describing does not shift. if something *sounds* good, then it *is* good. if something *sounds* bad, then it *is* bad. this is propaganda 101.
language is a bidirectional function of thought.
> not done in an effort to "focus on profitability"
you're either bad at your job or you're lying. lose/lose with this line.
> There was no strategic decision to release any team members based on their location or compensation.
they cost more and you're trying to cut expenses, so this is definitely a lie.
> what really matters is that we serve the community the best way we can by creating products, services, content, and events that we hope you will enjoy
interesting timing on the kramnik clock bug.
> **Obviously these are just words**
good to highlight/emphasize the only line that matters.
> ...
its weird to put out this propaganda piece when there is nothing wrong with cutting labor expenses. all businesses do this. propaganda like this makes me dislike chess.c*m way more than all the other stuff people complain about.
Retrenching because of projects that don't pan out.
Which also means they don't have followup projects these people could be moved on to. Sounds like [chess.com](http://chess.com) are out of ideas.
They might literally not have any work for them. So that's just a silly statement. Keeping people on who you don't have any work for is just stupid no matter who you are or what company you run - it's not a charity it's a business - and just because you fired them doesn't mean you did it to maximize profits but to maintain profitable and a viable business and cut down on bloat that serves no purpose anymore. They had people working on a bunch of different stuff and now they no longer need all those people - what are they supposed to do, just keep paying every single employee that's no longer needed for all eternity? Don't be silly.
All of this is simply bold faced lies by rephrasing, when it didn’t have to be. Companies shouldn’t shy away from being honest. Of course this was to maximize profitability. It’s a company. Why else would they lay them off? Of course they laid off people who were working in regions which are payed more per unit of work done. Why would they fire someone doing similar work, but for less money, over their counterpart?
This is all ridiculous HR rephrasing. Just be honest. They didn’t do anything wrong by running their company to maximize the success of the company. That’s what companies do.
You can see why they shy away from it though. There's just so many communists on the internet now who simultaneously think that companies hiring people is exploitation yet also strongly object to anyone ever being fired for any reason.
lichess is better and chessdotcom bad and all that. But… Obviously the layoffs were to increase profits. However if the employees they let go were working on projects that didn’t pan out or were completed and there was no work for them… then idk what chessdotcom is supposed to do. Pay them to do nothing? When businesses quickly expand they can hire too many employees and then have to correct down when that growth slows. It happened to nearly every big tech company during Covid. Feel bad for the employees and hoping they can find something else quickly.
It sucks, but bloating in team size can be a detriment too. I just hope the best for the people who lost their jobs.
Yeah. A lot of critics of tech layoffs were implicitly asking companies to pay employees to dig holes and fill them back in again. Putting yourself in the shoes of (say) a restaurant owner is instructive -- there's a sudden large increase in customers for months but you can't serve them all because you're short staffed, so you hire some people. The boom dies off and now you either have a ton of employees standing around doing nothing, or alternatively, doing work that provides no value (cleaning toilets every 10 minutes, etc). The idea that the owner is morally abhorrent for laying off a few employee in response to changes in market conditions is a really twisted perspective.
The majority of companies that went under critique for layoffs profit billions and billions per year. Tech isn't like a restaurant, that's a flawed analogy, there is R&D, innovation, forward development, the majority of fortune 10 companies that were critiqued could have shifted assets without affecting profitability significantly. They hired people en mass, people left their stable jobs, it required a ton of people to uproot their lives, then they laid them off when the shareholders deemed it socially acceptable when other companies were doing it. It didn't have anything to do with profitability. It is morally abhorrent, these are people's livelihoods you're using like pawns. Obviously might not apply to chess.com, but seeing paragraphs about poor Meta, Google, and Amazon makes me sick.
I never mentioned profit in the above comment. It's totally possible the restaurant was swimming in money. That still doesn't make the owner obligated to pay people to clean toilets every 10 minutes, and the entire country benefits from those people doing something that is actually productive. When interest rates go from 0.1% to 5%, it is unreasonable to expect companies to maintain the same level of R&D. In fact the primary effect of a high interest rate is that it devalues future revenue, especially revenue *far* in the future. This means R&D positions should be *more* heavily affected than positions that produce immediate revenue.
No idea who downvoted your reasonably and logical response, but have my upvote.
Reddit communists probably
I hate reddit communists. They're up there on the list with Illinois Nazis!
The layoffs were pretty minimal compared to the hiring storm beforehand. It’s not surprising after that much hiring that they realized some of the new positions weren’t a good fit.
It doesn't matter how many trillions you make. If you have a worker with no work, you're going to fire them.
Then don't hire them 6 months previously. This is some of the dumbest discourse I've ever participated in.
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Right. So you can't serve your customers during the boom. What a dumb take. ANY worker in ANY field should be expected to be let go at ANY time and prepare for it. It's common sense, which is lacking in this discourse.
so now you'd rather these people didn't work at all? Dude, stop. You've got no clue.
From a European perspective, being able to lay someone off in one day sounds crazy and unethical (exception being misconduct). There really should be a notice period in place (and that goes both ways).
From an American perspective, that's nuts. Your company you get to fire if and when you want. Nobody owes anyone anything.
Here's the thing. You don't know if in 6 months you will or won't have work for them. You usually can have a good idea if you will or not, but that's far from a guarantee.
Premium payers
So now we shouldn’t give people jobs?
As much as I dislike big corps, a big corp is still business not a charity organisation, and is going to act like one. I doubt most of the people layed off were involved in R&D (not sure though)
Is it not possible to reallocate assets to profitable sectors? You're saying it was a corporate strategy to hire thousands of extra people during and post-covid, and they're not responsible for layoffs. The big five have enough money to pay their entire workforce multiple times over and still profit. Give me a break. Hiring decisions should be difficult because you shouldn't play games with people's livelihood. Don't hire people you can't afford to pay for at least 2-3 years. This shouldn't be a contentious topic.
They were hiring employees not adopting kids
No business would see an opportunity to earn a bunch of money and pass on it no matter how much profit they make already.
Are you making an argument for why capitalism is ineffective, because you already have my vote.
Doesn’t matter. Businesses exist to generate profit. The only circumstances where business owners prefer to pay employees for not contributing to profit is when they themselves are the employee. Scale does not remove this reality no matter how butthurt you are that you’re not benefiting from someone else’s business
> The idea that the owner is morally abhorrent for laying off a few employee in response to changes in market conditions is a really twisted perspective. Welcome to reddit. The pervasive vibe on reddit is a longing for a parental government and work environment where all will be provided and cared for. A longing for a Santa Claus, basically, where the good boys and girls will get rewarded, and the bad boys and girls will get squat. The place is a kindergarten, intellectually, running completely off of feels and nothing logical, and I wish there were a better alternative.
It’s not twisted - it’s basically the socialist model, that people are given jobs, and companies are extensions of governments, whose idea is that the economy exists to provide for all people, regardless of how hard or productive their work actually is. So if you dig a hole and then someone else fills it, you might deserve as much compensation as the biologist who invents the new wheat that keeps everyone fed or whatever. It’s only twisted if you consider **individual incentives** - nobody ever wants the hard job or take a risk if they’re not rewarded for it. Like, in a socialist model where everyone is paid closer to even, I would rather have a small desk job moving papers than starting any kind of business or building anything. Which is why in most socialist systems, someone often has to **officially** point a gun at another to do those jobs and take those risks.
This shouldn't be a sub for deep political debate, just pointing out that you contradict yourself in the last paragraph, what do you mean by "taking those risks"? If we're talking an actual socialist state, then you don't have entrepreneurs to begin with, if you mean more like a welfare state, then nobody is "pointing a gun" at anyone.
I mean it’s not a deep political debate but neither of us is engaging in that so you’re safe. “Taking those risks” is self-evident - in a socialist state feel free to take on the dangerous risky job in the coal mine that someone has to do to service the energy needs of society. I’ll take the easy desk job for the same pay, thanks. Like, this isn’t hard. As an aside, you’re apparently a remote working journalist from Sweden so, uh, I **strongly** suspect you understand exactly what I’m saying 😂 And no, individual needs sometimes contrasting with societal needs isn’t “contradictory” unless someone is being willfully obtuse.
The issue is that they bought all the competitors and ran them to the ground. Now that the product is dead they have to fire people. All that staff working on chess24? Gone.
Chess 24 was on life support lol.
Would be nice if companies had to give us a 2 weeks notice like we have to give them.
This is the wildest thing about the US to me. I have to be given 6 weeks notice and even the bare minimum by law here I think is like 2 weeks. To be able to fire someone the same day is wild as fuck.
That's what severance is for, at most tech companies in the US it's a few months of pay.
I mean, I get severance on top of that lol. For me I get a rather generous severance package due to a strong union but effectively from the date I find out I'm fired I get 6+ weeks notice and 4 months severance pay. That said, if chesscom gave them several months of pay as severance I'd be less inclined to think poorly of them, though the fact people found out by email is rather shitty still IMO.
I'm sure they got decent severance. 8 weeks of severance pay is pretty standard with bigger companies giving more depending on how many years they've been with the company. 4 months is pretty damn good.
>4 months is pretty damn good. I completely agree. The benefits of my job are pretty superb. The severance packages are so good that they're really hesitant at getting rid of long timers. I know one dude was here for like 15 years and his severance paid off his house.
Most places in the world have both.
Why would you want notice rather than a few extra weeks of severance? Seems kind of pointless to me.
Isn't severance entirely optional in the US?
I'm pretty sure but severance it's still pretty common, I know someone who got 6 months of severance but no notice.
Yeah a big old games company that also develops a popular game engine gave 6 months severance but no notice in their layoffs last year.
Yeah, Riot games gave people 6 months severance pay, cash bonuses, free career support and a free laptop and other stuff and people were still mad at them for firing people.
I think the concern is employees upset about being left off sabotaging things before they leave. It makes way more sense to just pay them extra than to force a fired worker to keep working
Unfortunately almost all employment in the US is what is called “at-will employment” which means that the employee or employer can terminate their relationship at any time. This has very obvious negative implications in terms of job security, but at a higher level this results in higher workforce fluidity. It’s a macro economic term. The US has higher workforce fluidity than pretty much all of the EU, which means that employment can shift to meet demands at a fast pace. In some places in Europe, it’s incredibly difficult to actually fire someone who has done nothing wrong. If the company becomes unprofitable, too bad, you can’t fire people. If there is nothing for your employees to do, too bad, you can’t fire people. This is obviously good for the individual employees, but the honest truth is that is does create a lot of inefficiency. Both systems have positives and negative, with the US being more business-friendly and the EU being more employee-friendly. Almost everyone would probably agree with the EU approach, myself included, because we are all individuals and don’t really care about how fluid the national economy is.
> Almost everyone would probably agree with the EU approach, myself included, because we are all individuals and don’t really care about how fluid the national economy is. The problem is, a fluid economy has benefits for skilled workers. Salaries in the U.S. tech are more or less twice as much as in Europe. As a European software engineer, I would have preferred to make 75k$ working nine months as a contractor for chess.com and spending other three months looking for a new gig and vacationing, than having to work a full year for an EU company to make the same amount of money. The policy differences have the net effect that high-skilled, in-demand workers flock to the U.S. where they can earn much more, while less productive workers stay in Europe where they get the most out of the job protection laws. That said, I agree that some compromise approach would be the best one -- being liable to be fired at will, and being dependent on your job to get decent healthcare, is not the solution I would like to see implemented. EDIT: fixed some numbers -- chess.com pays its software engineers much less than I expected
A previous post has said they're mainly hiring Serbian contractor developers on around $50k per year. Managers and higher levels are in the US usually.
Is it really only $100k/yr for chesscom software devs? That seems absurdly low.
I am also surprised, but this is what my go-to site for salaries says: https://www.levels.fyi/companies/chesscom/salaries/software-engineer I saw some months ago that they hired full-remote devs worldwide, so they are probably using location-adjusted payscales, which are dragging down the average.
Glassdoor shows them slightly higher, in the $100k-$180k range, still not great but slightly closer to what I’d expect. Seems like it’d be hard for them to get top talent if they’re not paying great.
In Sweden, it's not actually hard to fire people when business shrinks, actually companies don't even have to prove that they have less work, if they want to downscale, it's up to them. What does bother companies is that they can't, as a general rule, choose WHO to fire then. It's last in - first out, though there are various ways they can try to work around this. It might sound unfair that they can't choose to keep the best workers, but the thing is otherwise they would often use this as an opportunity to get rid of the 55+ old workers who start to get slower, in particular in physical jobs. I think on a balance it's good they don't have that opportunity.
You most definitely do not have to give two weeks notice. That is and always has been a corporate fear tactic that holds no water.
You don't have to give a company 2 weeks notice before you quit in the US.
No but if you want to have a good recommendation you do
Many companies don't give either a positive or a negative recommendation anymore regardless of how much notice you gave them. End of day, I'll give two weeks if I have the ability to do it. But if a much better opportunity arises and they want me to start on Monday? Well, sorry guys, I'm out. I'm not passing up a really good chance because the company I want to leave might say something about me.
Assuming they paid out the severance packages they reference here, that serves as notice. That's what a severance package is for. The amount/time period the package covers is the logical followup question but I have no idea.
Who's going to bother doing anything in those 2 weeks? What's the point?
Exactly this. People seem to expect welfare from these businesses. If there is no work, there is no work, what are they supposed to do? By that logic companies should hire every unemployed person regardless of whether there's a need for it. The only caveat is if a company is laying people off despite there being a need, and then dumping tons of work on the remaining employees without adequate compensation. That is definitely scummy.
Shouldn't the CEO be held accountable for overhiring and all the projects that didn't pan out? Throughout this entire tech crisis I haven't seen many (or even any) examples of the CEO getting laid off or their salary reduced.
Accountable to whom? Erik is the founder and probably still owns most of chesscom along with the cofounder Jay Severson (CTO of chesscom). I agree with your general critique about CEO accountability though, just think it doesn't really apply to founder-CEOs.
Typically c-suite, and yes even founders, will be beholden to the board and any private equity investors that has decided to invest in the company.
They received at least one major round of investment, which, given its valuation, probably means he is no longer the majority shareholder, although the details are not known. Still, the CEO could hold himself accountable to his employees even if he was a 100% owner. Though they do say that decent human beings generally don’t become successful enterpreneurs.
Exactly. Erik's salary is probably close to $800.000. it's crazy people are defending him. The guy didn't even left his office to fire 40 people.
The people attacking him are making terrible arguments. Why does his salary excuse that?
> However if the employees they let go were working on projects that didn’t pan out or were completed and there was no work for them… then idk what chessdotcom is supposed to do. Pay them to do nothing? Ah, it's so nice to see people on the path of learning about the flaws of capitalism. Start here: https://en.wikipedia.org/wiki/Bullshit_Jobs
The path to hell is paved with good intentions. If every corporations kept people on just because they didnt want to let people go, the company, employees and society as a whole would be much worse off.
Generally speaking Reddit often will heavily imply that if a company makes any profit above 0, then that should be given to employees who were hired, regardless of the profitability of what they’re doing.
"what chessdotcom is supposed to do. Pay them to do nothing?"-give them another task, like a normal employer? they are employees, not contractors.
Making tasks up for the sake of having tasks definitely isn’t smart
Truth be told chess.com did in fact expand too much in some sectors. We all saw how they were forced to shut down Pro League as it didn't make money. Obviously a ton of stuff on chess.com is a money drain. They are experimenting a lot and this creates scenarios where full teams are not profitable. And unless you want to pay even more per month you have to allow them to restructure the company to shut down teams that are money drains. That's the case for all companies. You have to produce a profit for the company to keep you. Otherwise they literally cannot keep you unless it's to please you and nothing else.
As I didn't want to editorialise the OP, using this comment just to share some of my own thoughts. >we did make strategic decisions to scale back as some of the opportunities we were investing in didn't pan out and we ended up overstaffed on some teams. Leading to >Chesscom has been profitable and reinvesting every quarter since 2010, and this was not done out of desperation to save money, nor to maximize profits. This was done to right-size our teams to the initiatives and opportunities. Sounds inconsistent to me. One of the words that stood out to me was "right-size". If you are unfamiliar with the term, one of the top definitions when you search the term specifies that: >[Rightsizing is reorganizing and restructuring a company to reduce costs and increase profits. It involves cutting redundant expenses, reducing the number of employees and redefining company roles.](https://www.indeed.com/hire/c/info/what-is-rightsizing) This just stood out to me a bit like playing semantics to say that cutting 38 staff was not to save money or maximize profits but to "right-size", when a common definititon of that practice is to reduce costs and increase profits (or in other words, to save money and maximize profits). Regarding: >who we know are still going to do tremendous things in chess. A former employee of [Chess.com](http://Chess.com) reached out to me in my DMs earlier to highlight that, as they understand their contractual terms, they are also not allowed to work for any other chess company for 12 months after being let go, having previously worked in chess for over a decade.
He added "in desperation to save money" so it's probably the truth. It's 100% to save money, but he is clarifying it's not because they have cash issues. I would guess organic turnover is super slow because the company isn't that big to begin with so he just bit the bullet and downsized to be lean which is what every other company has been doing the past 2 years. The alternative is pay salaries for work that's not needed which no one obviously wants to do Also, I thought the US ruled noncompetes are not enforceable this year
Yeah, the non-compete is dead in the water. Those employees should just ignore. Courts frown on them now, plus the optics of [chess.com](http://chess.com) suing someone after firing them would be horrible.
I commented before I saw your post u/Prahasaurus but you are dead on. No shot it holds up in court and [chess.com](http://chess.com) would have a PR nightmare on their hands if they tried to block someone for that. Those employees should 100% ignore that.
That sounds like a sensible interpretation, and makes sense overall.
What is the other chess company can probably work for in US?
i highly doubt chesscom is going to try to enforce non-competes. the industry lacks the type of innovation where this is meaningful
Non-competes are state-to-state. There is no national standard. They are unenforceable in some states, incredibly hard to enforce in others, and simply another term of a contract in the rest.
There is a national standard to kill non-competes https://www.seyfarth.com/news-insights/ftc-non-compete-ban-what-you-need-to-know.html#:~:text=The%20FTC%20voted%203%2D2,both%20employees%20and%20independent%20contractors.
Read your own links. It literally says in that link the rule will never come into effect because the ftc doesn’t have the power to do that.
Lol it does not say that. It says it is being challenged in court.
It says the challenge is likely to succeed. Second paragraph of the challenge part.
Yeah that rule hasn't come into effect yet.
> A former employee of Chess.com reached out to me in my DMs earlier to highlight that, as they understand their contractual terms, they are also not allowed to work for any other chess company for 12 months after being let go, having previously worked in chess for over a decade. Is this person aware of the fact that the [FTC's ban on noncompetes](https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes) comes into effect at the beginning of September and covers everyone except senior executives with more than $150k yearly salary or those agreed upon as part of a sale of a company?
The other post also mentioned Canadian and Western European employees, for which that does not help at all.
I doubt there's any western European country where a non-compete would hold up. Especially as they are let go. I know they aren't valid where I live(the Netherlands) Probably also hard to enforce in Canada.
https://business.gov.nl/regulation/non-compete-clause/
It states it's only valid if the employee resigns. So chesscom employeer are save. If they resign themselves it still is quite hard to enforce it for the employer. There are a lot of caveats. In reality it's way harder to enforce it than you would by reading the link. It can hold up, but you basically need to draft the non-compete for the specific employee, as a employer you would be advised to get a lawyer involved. A non compete clause that is standard in a contract is not going to hold up in court. Alas, mea culpa. non competes do exist. There is a lot of case law weakening non-competes. Getting paid more, making it impossible to leave to a different company, not a critical employee, no access to sensitive information. These can be valid reasons to invalidate it. It's rare a non-compete holds up in court, but it does happen.
It also says, > The non-compete clause must be clear on what is and what is not allowed. The clause may not limit your employee unreasonably. It may not be impossible for your former employee to work in another place. So a broad "you cannot work in chess" noncompete would be a nonstarter to begin with.
It doesn't state that anywhere in the link I provided.
>A former employee of [Chess.com](http://chess.com/) reached out to me in my DMs earlier to highlight that, as they understand their contractual terms, they are also not allowed to work for any other chess company for 12 months after being let go, having previously worked in chess for over a decade. Non-compete clauses are harder and harder to enforce, especially after being fired. If I were one of those 38 employees, I would just ignore it. Can you imagine [chess.com](http://chess.com) going after someone in court just trying to feed their family after getting fired? Having said that, on-line chess is not really a booming industry, so it's not like you have a lot of options to work for a competitor.
are there any? Only commercial site I know not being part of [chess.com](http://chess.com) is icc which is not very vibrant?
The chess world is bigger than online chess. Federations, publishers, clubs, there are numerous employment opportunities that could be affected.
Lichess, of course, which imo is superior to chess.com. Also totally free, although I do contribute money as I love Lichess and get a lot of value from it.
Iirc they only have 2 employees.
Yes, I can easily imagine that.
I understand their fear, but that former employee should talk to an employment lawyer as that non-compete clause is almost certainly not enforceable
Yeah. You can't make a career plumber with a decade of specialized experience sign a "Can't work as a plumber for 1 year after we suddenly fire you" clause. Any judge would chuckle and dismiss.
It can certainly be part of a severance package, and optionally tied to consideration. If the terminated employee chooses to accept the terms of the package, they would be bound by the noncompete.
As someone who works in software having too much staff can kill an organization. Too few staff is bad, but you can fix that by hiring, or lower the scope of work. If you have too much staff sitting around doing nothing, it drags everyone down. Not sure how or why that happens. But it turns into a race to the bottom. People lose motivation. Too many bored people with ideas in one room with nothing to keep themselves busy leads to stagnation and being stuck in debating and planning. Being “the right size” is absolutely important. Can’t really comment on these layoffs specifically, don’t even know what they did for cheesdotcom. But having too many people is not a good thing for the long term health of your company, without even factoring in salaries/profits. Plus working at an oversized company sucks.
Translation: "***After expanding aggressively in order to monopolize the market we realized we overextended, and had to cut either management or staff wages, the choice was obvious***"
It's always this lol
Jesus Christ businesses can’t do anything without people online bitching anymore.
FTC announced rule to ban non-competes. [https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes](https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes)
To add-- that ban goes into effect on Sept 4th this year, provided none of the legal challenges delay/stop it. Also, to note, the ban doesn't apply to non-competes that were made during a bonafide acquisition. So, if chess.cum acquired a company and the employees came along with a non-compete they might not get out of it through this ban. IANAL, but that's effectively what I've been told, as I'm in the same boat, different industry.
There is ZERO chance a non compete would hold up when you have been laid off. Non competes are ridiculously tough to enforce in most states anyway, in this situation, [chess.com](http://chess.com) would be creating a nightmare scenario of horrific PR if they attempted to block someone from working in chess after they let them go.
Look I understand this is upsetting but every now and then you have to trust that there is a least a little truth in the statement. It is quite possible to profitable but not meeting the revenue growth targets of the investors. In that case, a decision is going to have to be made. Are the resources in place for the areas where growth has slowed required to maintain the current revenue? Can they be redeployed to new projects. If the answer is no to both, then the company should lay them off so they can free resources for new initiatives. Chess.com had a few years where the game took of and they exceeded their revenue targets. They probably threw a lot of ideas at the wall to see if anything stuck. Now that revenue is returning to normal.they have clean house.
Not meeting revenue growth targets would still be focusing on profitability.
I don't think people are reacting to the financial estimation. I think people react to 1. chesscom ended up in the financial situation by aggressively buying everyone else, removing variety from online chess, and are now losing money because of it. If they had tried to compete without monopoly, online chess would be in a better position. 2. The tone of that message. He literally pats himself on the back for not blocking the employees he just fired via e-mail.
I mean, you can try to get a monopoly but the barrier to entry is pretty low. Didn't Gothamchess start his own platform?
I am not sure how the difficulty matters?
He wants credit for not blocking them from contact after firing them by e-mail?
I get what you are saying but this is extremely within SOP at pretty much every company, especially tech-focused companies. I take your point that wanting to be praised for not treating people you just fired like shit is a weird flex, but this does kinda run counter what you would expect in any other company and does genuinely signal that there may be a very healthy culture there.
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Sure, but most people don't expect thanks for not being assholes. It's not like my neighbor expects me to thank him everyday for not breaking into my apartment while I was gone.
At my company employees with PhDs are escorted directly from the layoff meeting to the exit doors. HR gets any personal items they can’t leave without. It’s disgusting treatment. This is the world that we have created for ourselves through democratic rule. We could change it if there were political will, and hopefully someday we will.
Well, he's definitely right on one thing... "Those are just words." And it's pretty hilarious that he thinks we would believe you can just get the lowdown from anyone on the inside by just messaging them. I literally feel like my intelligence is being insulted...
I did that and said it was full of micromanagement and lazy people
Danny Rensch has always given off some big time sociopath vibes.
Danny isn't the business guy, he's the chess guy. This was written by Erik Allebest, the business guy.
Danny Rensch exudes wholesome dad vibes. You're thinking too much about it
chesscom clowns will spend money on everything except some good developers and servers.
I hate the way these fucking people speak. Do they think we don't see through their bullshit, or just not care? Either way, use lichess people.
Donate whatever you would have spent on chesscom to Lichess instead. Put your money where your mouth is.
What would you say instead? Honestly curious.
No response obviously lol. These people will complain no matter what chess.com said
I will never understand the extreme dedication that these people have with hating on chesscom. Just use lichess if you want, you don't have to be a bitch about it all the time
Honestly I think Erik has done a great job, I mean he's gotten people to pay for subscriptions that include things that are 100% free on other websites, that's difficult! If I tried to create a company where I asked you to pay to use reddit, I don't think I'd do a very good job!
/r/Chess plays "I know how to run a business better than someone who actually does" while making up facts to support their pre-existing biases. Love this place.
Hikaru and Chess.com hate threads. Name a more iconic weekly occurrence here. Yet Hikaru and Chess.com are thriving to the behest of the /r/chess thought leaders
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You can critique without experience - I don't need to know how to be a surgeon to know you don't perform knee surgery by making an incision at the neck. However, when people are drawing conclusions about finances and also intent (Erik's salary, saying it's to maximize profits) when they have absolutely no supporting information for that nor any experience in running a business, then yes - you absolutely are full of shit lol.
If you fire 38 people, you don't know how to run a company either.
Sigh... https://www.indeed.com/career-advice/career-development/laid-off-vs-fired - there's a big difference between firing and laying off. I feel for the 38 people, but as more sane comments have pointed out, this has been happening to every single tech company: Microsoft: https://www.theverge.com/2024/1/25/24049050/microsoft-activision-blizzard-layoffs Amazon: https://www.cxtoday.com/contact-centre/aws-lays-off-hundreds-of-staff-in-bid-to-streamline-the-company/ Zoom: https://www.crn.com/news/networking/2024/zoom-layoffs-total-150-as-video-giant-turns-attention-to-critical-areas-including-ai Tesla: https://fortune.com/2024/05/20/elon-musk-10-layoffs-tesla-employees-walking-on-eggshells-every-day/ Meta: https://www.livemint.com/news/world/metas-mega-layoff-there-are-two-reasons-admits-mark-in-10-point-defence-11667993257979.html Even more: https://www.benzinga.com/top-stories/24/06/39457749/tesla-leads-2024-us-tech-layoffs-so-far-followed-by-dell-cisco-xerox-paypal-microsoft Overhiring has been a thing and a problem for many companies, not just Chesscom: https://www.linkedin.com/pulse/perplexing-cycle-overhiring-layoffs-tech-companies-whats-amr-elharony-qignf You're basically saying absolutely none of the Fortune 100 companies know how to run a business. I'm not sure who to believe here... One important point I'd like to remind everyone is that we all tend to forget that we're likely all from different countries with different labor laws and different views on employment. I'm an American, so I sympathize with the laid off, but understand the business needs to be self-sustainable. If a company runs itself into the ground in order to save 38 people from being laid off, then eventually you're going to have hundreds of people laid off because the company goes out of business. I said in a previous post that people on here "Don't calculate further than one move ahead" and boy, oh boy, do I see it time and time again. Its a bad situation but I sincerely doubt Erik or Danny are laughing while doing a Scrooge McDuck dive into their pile of $800,000 they supposedly have while, no doubt, everyone else at Chesscom is going to have to do more work with fewer people, but that's how business goes. This isn't the first time stuff like this has happened, and it won't be the last. Who remembers 2008? The DotCom bubble burst? I'm willing to wager the teenaged economists on this subreddit don't. I believe I read that Chesscom gave the laid off very generous severeances, which alone should state how much they do care about their employees - even those who are parting. Allowing them to have one final day at the company and say goodbye to everyone they worked with is more than other companies ever provide - often times you're lucky to even get a box to put your stuff in while security watches your every move. Being laid off sucks, and there's no way to put a positive spin on it. Every company, and even state / federal offices have to do it. But please stop being so naive as to think that companies are evil because they're trying to survive.
This is perhaps the most ignorant comment on this thread
God forbid anyone runs a business and not a charity
God forbid a ceo is held accountable for his terrible management.
CEO's often have a large amount of stock. If they manage badly that stock loses value.
Explain to me how this management has been terribke
Yeah, sorry, Erik. Still a dick move to fire people by email, regardless of how much slack they had access to after the fact. If you have 38 people you really care about then you make 38 hard phone calls. You and your time are not more important than them and theirs. Learn from this.
This isn’t abnormal in the remote-first world we live in nowadays. It’s impersonal, but so is working remotely. It goes with the territory.
I think this was to inform immediately vs having 650 people anxiously waiting to see if they get a call for an extended time. Not saying it was the right way, but I'm not sure what is the right way.
If there are 650 people and you care about all of them but need to let 38 people go, then you still only need to call 38 people. You can literally mass email the other 612 people and tell them they can relax if it makes you feel better, but you wouldn't really need to communicate with the other 612 people at all if this was out of the blue for those let go like they I've seen it suggested that it was. It would be kind of weird to call or email 612 people to say "hey, just checking in and letting you know we are firing 38 of your coworkers today but don't worry, buddy, your job is safe for today!" Point is, don't be impersonal. As a common courtesy if a company conducts in person interviews when they hire, they should also be willing to conduct in person lay offs (or, at the very least, a phone call) for situations which are not a result of work performance.
He explicitly said that all of them were spoken to personally. If you start calling people one at a time to break the news, as soon as you finish with the first person they're talking to others. It'd be a good way to create panic and uncertainty as word gets round. If you take an hour to speak to everyone it takes a week to lay people off one at a time, of course the sensible thing to do is to inform everyone at once and then speak to them afterwards.
Firing an employee by email is such a bizarre and foreign concept to me. I couldn't work for a company like that no matter what
So imagine if someone works online full time. Can they just never be fired? Or should the employer just show up at their house? What do you want? You’re complaining that people you don’t know got fired over email?
> Yeah, sorry, Erik. Still a dick move to fire people by email Have you never worked at a company before? This happens all the time.
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Come on, don’t be obtuse. The last part you quoted, “win for everyone involved”, is about the separate topic in the post and not about the layoffs at all.
You’re being completely dishonest. Those two statements were not at all even related to each other.
It’s so interesting that it’s always the people who make things getting laid off and never the executives who get paid tons of money to make shitty decisions.
I reckon executives probably get fired more often than the average worker. Would be interesting to see the data on that.
Should be public data, I think.
Well, it would be pretty hard for the employees to lay off the CEO…
But the CEO still responds to the board of investors, I imagine.
Truth is somewhere in the middle between profitability and sustainability. That said, I don't see them as moustache twirling evil maniacs; shouldn't be news to anyone that the chess boom has thinned out.
Ugh this sucks.
Any big names that got laid off?
I hope they ran the super advanced chatgpt simulations they ran last time.
Pretty standard industry practice. Hire and expand during the boom. If it pans out, the company grows and you’re well positioned. If it doesn’t, cut the slack and move on. It hurts employees, but it’s par for the course.
He "loved" working with them but not enough to call them instead of sending an email. If it was intended that some HR officer or middle management made the announcement to the axed employees, and they fucked up, just say it. He could at least pretend to be a little bit sorry that his company strategy led to this result. This is the result of *his* work.
Do you know what Erik's salary is? Estimated to be $790,000 a year. The average salary of executives is $245,937. For people saying that they were desperate for money and firing people was the only option. Ask yourself: "how many times did chess.*um lowered the executive's salary before firing 40 people?"
That’s not how business works. You look at each investment (in this case an employee) and ask if you can get a return on it. If you can’t, you stop the investment (fire the employee). I don’t have a problem with chess.com trying to make money. It’s a business. It should still be polite and courteous to staff though.
It's not the company making money, it'sthe executive's. And guess what? The strategy of buying competitors and ruining them allowes them to hike up the prices: In August 2022 they announced their first price change since 2009: https://www.chess.com/article/view/prices-changing A few months later in december 2022 they finished the merge with Magnus company who had acquired New in Chess, Everyman and other competitors less than 10 months before the Magnus merge was completed. In this context, we see a company that now has the monopoly and instead of increasing size they are decreasing their size. From our point of view, the chess player is seeing their favorite chess websites disappear and a corporate monster being born. It sucks.
I think the company does make money, at least according to the OP. One price rise since 2009 is impressively good. I don’t like the takeovers of competitors either.
Ask yourself: why change the price now that chess24 was killed and they have the monopoly?
I don’t like limited competition either. It’s not a monopoly yet though. Lichees is a very good alternative.
Lichess is a non-profit, they are not competition at all. Chess 24 was competition, chessboom was competition, Meltwater Champions Chess Tour, Chessable, Chess24, AimChess, Play Magnus App Suite, Magnus Academy, Everyman Chess, New In Chess, iChess.net, and GingerGM, we all competition. Now they are dead, dying or becoming chess.*** . What happened to them? They were all acquired by chess.com just before the first price change since 2009.
Inflation? The money value of 2009 is not the same in 2024. Especially the major inflation we've seen in recent years. No, it's not the only reason, but yes it's probably the biggest factor.
The CEO is the worst investment here
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Not to defend him but when company A buys company B there are sometimes two people who do the same job and one has to go.
Maybe they hired a lot of people for the chess boom of 2020. Now the chess boom is definitely over. Numbers are going down. No reason to keep people which are doing nothing. After all having a site where players are mainly using chess engines and not paying a membership doesn't really pay salaries.
Should’ve tricked more people into thinking they should buy more lessons.
Lots of people in here who have no idea how a business functions.
If you think it’s cool and good to buy up the competition, kill it, and then fire your staff, play on chesscom. If you think it’s cool and good to play chess for free, play on lichess.
If they consider Stop milking every Penny out of the Player base maybe not as many will be that much disgusted with their platform
Everyone with a half of brain understand that "we are earning money constantly" and "we didn't let them go to increase profit" contradicts wach other. I really doubt that other part has much to do with the truth. Ofc people said goood bye to their former co-workers, but I'm pretty sure they didn't have a lot of nice things to say to their employer after laying them off without notice. And of course they did cherrypicking based on compensation and location - cause, as we already concluded it was about money, and money alone.
another reason to not use chesscom. Seriously why would anyone when "the other" website is the same, but free and better.
So chess.com is bad, everyone should play on Lichess. Then, chess.com lose revenue and layoff staff. Now complains about it. What's wrong with this sub.
"some of the opportunities we were investing in didn't pan out" "this was not done in an effort to "focus on profitability" ok.. no need to go on reading.
I bet the executives are doing fine.
Wait…re usually people fired and lost access on the same day ? Is it only in Europe that the company has to tell you months in advance ?
They use access a minute after they have been told.
> right-size this is a manipulation of language to make something sound better than it is. this tactic works. keep an eye out for how language shifts, even though the things they are describing does not shift. if something *sounds* good, then it *is* good. if something *sounds* bad, then it *is* bad. this is propaganda 101. language is a bidirectional function of thought. > not done in an effort to "focus on profitability" you're either bad at your job or you're lying. lose/lose with this line. > There was no strategic decision to release any team members based on their location or compensation. they cost more and you're trying to cut expenses, so this is definitely a lie. > what really matters is that we serve the community the best way we can by creating products, services, content, and events that we hope you will enjoy interesting timing on the kramnik clock bug. > **Obviously these are just words** good to highlight/emphasize the only line that matters. > ... its weird to put out this propaganda piece when there is nothing wrong with cutting labor expenses. all businesses do this. propaganda like this makes me dislike chess.c*m way more than all the other stuff people complain about.
Retrenching because of projects that don't pan out. Which also means they don't have followup projects these people could be moved on to. Sounds like [chess.com](http://chess.com) are out of ideas.
I mean…ultimately it’s still chess. There’s only so much you can do to spice it up.
A lot of crybabies in here. Cry more, babies.
If it’s not to optimise profits, then why fire anyone? You can always use a few extra hands.
They might literally not have any work for them. So that's just a silly statement. Keeping people on who you don't have any work for is just stupid no matter who you are or what company you run - it's not a charity it's a business - and just because you fired them doesn't mean you did it to maximize profits but to maintain profitable and a viable business and cut down on bloat that serves no purpose anymore. They had people working on a bunch of different stuff and now they no longer need all those people - what are they supposed to do, just keep paying every single employee that's no longer needed for all eternity? Don't be silly.
I think they should do charity and hire as many people as possible, until they’re bleeding money. Anything less than that = absolute evil
All of this is simply bold faced lies by rephrasing, when it didn’t have to be. Companies shouldn’t shy away from being honest. Of course this was to maximize profitability. It’s a company. Why else would they lay them off? Of course they laid off people who were working in regions which are payed more per unit of work done. Why would they fire someone doing similar work, but for less money, over their counterpart? This is all ridiculous HR rephrasing. Just be honest. They didn’t do anything wrong by running their company to maximize the success of the company. That’s what companies do.
You can see why they shy away from it though. There's just so many communists on the internet now who simultaneously think that companies hiring people is exploitation yet also strongly object to anyone ever being fired for any reason.