Discord to lay off 17% of staff
CEO Jason Citron cites over expansion in 2020 as the cause for layoffs.
2023 was a horrible year for video game industry layoffs and 2024 has unfortunately picked up where it left off. We’ve already seen layoffs at Unity and Twitch in the early calendar year, and now Discord is cutting jobs too. The company behind the popular social app has confirmed that it’s laying off 17 percent of its staff.
Discord announced its layoffs in an internal email obtained by The Verge. In it, CEO Jason Citron parrots countless other CEOs in saying that the layoffs were a “difficult decision” and something that the company “did not take lightly.” He attributes the layoffs, which will affect 170 Discord employees, to the company’s rapid growth during the worst days of the pandemic.
Source: Discord
Citron’s letter goes on to outline the severance packages for affected employees, which includes five months salary, three months of outplacement services, and access to Modern Health service through the end of the year. 2024 is already off to a terrible start in regard to industry layoffs, and we wish the best for everyone impacted.
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replyDonovan Erskine posted a new article, Discord to lay off 17% of staff
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I've seen various Twitter threads about how changes to Section 174 of some tax code stuff is massively impacting how less/unprofitable software companies can afford to keep previous headcount. Way outside my area of expertise but it seems like Discord could fit in that bucket. But I also don't know why execs don't cite that sort of thing as a reason for cost cutting if it's actually the reason.
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The amendment to S174 means employing software engineers can no longer be accounted as a direct cost in the year they are paid – unlike the norm, globally. Here’s a simplified example of the change from the final tax year before the change.
Take an imaginary bootstrapped software business called “Acme Corp.” This company generates $1,000,000 of revenue per year running a SaaS service. It employs five engineers, and pays each $200,000. That is $1,000,000 paid in labor costs. For simplicity, we omit other costs like servers and hosting, even though those costs can also fall under the new R&D rules, and have to be amortized. So, how much taxable profit does this company make?
In 2021, the answer would be zero profit. In 2022, the answer was $900,000 in profits(!!) This is because from 2022, software engineer labor costs must be amortized over five years. Here is how amortization works:
10% amortized for the first year
20% amortized for years 2 to 5
10% for year 6
...
What happens to a small, bootstrapped company without $189,000 in cash floating around with which to pay this tax? There are two options:
Take out a loan at a relatively high interest rate (likely at around 10% or so.) I’ve heard of small businesses needing to use personal loans to pay tax.
Lay off a software engineer on $200,000 per year and use this saving to pay the bill!
https://blog.pragmaticengineer.com/section-174/
Trump tax cuts are bad
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5x growth since 2020 is wild. no wonder they have to cut.
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Discord? More like cutcord.
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Fuck, that's funnier.
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Workers are scared now. You know all that talk about unions?
Great way to depress unions is to make workers fear for their jobs. -
why didn't Discord lay these people off during the last round of layoffs they did last year? not enough cover then?
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What, you don't want to spend like $20 a month on emojis?
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another manual lol
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Manual lol
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sadlol on that one
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Brutal lol
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This layoffs really suck. As someone looking for a gig, all of these tech layoffs sure are helping morale.
Each one is more competition, as it displaces more people who now enter the seeker market.
What a great market.-
Just go into government. You'll be unionized and have a defined benefit pension. Most are WFH or hybrid these days.
Plenty of state, county, and local positions open and in California you can retire at age 55 earning 2.5% of your income per year of service.
Say you start at age 30 and work to age 55. That's 25 years and with 2.5% per year you get out with 62.5%. Hell work to 58 and get out with 70%. If you retire with your income for the highest of your last 3 years topping out at $150K (a Senior IT Security Engineer is around $220K in the Bay Area) then you will get paid out $105K a year with adjustments until you die. Retire with your home paid off and if it's less than what you aren't getting from the rest of the pension then you're pretty well off with regards to income. You can also still work part or full time after you retire and draw a pension as well.
Then there's the state's version of 401k as well and if you save enough in it you can draw from it whenever you retire and I know people who retire 1-3 years early and live of that waiting for the pensions to kick in.
I haven't checked in a few months but plenty of IT positions open in local and state ranging from enterprise admin to help desk to cybersecurity to app development. Feels like not that many people are considering government probably because the pay is anywhere from 50-75% as much as private but that pension and job security is honestly worth way more. Plus just go private after you retire with the pension to double dip especially with a contractor that the government hires. Another downside too is promotions aren't as common since you have tk wait for the one above you to promote, retire, or die. But you can always lateral to another agency in the system and keep your benefits and applying/interviewing can be done in your work hours with nothing lost if you don't make it.
My friend who's private calculated out that to retire like I am he'd have to accumulate assets of up $2.5-3 Million.-
"Just go into government"
i'm 100% ignorant of how it works in the states, but i know up north these kinds of positions are heavily gated by in-groups/nepotism at this point and you'd have to have been basically groomed into positions like this from birth or found the right dick to suck to get your foot in the door.
i remember i did my college practicum in a canadian navy posting and my team comprised entirely of dudes who had already done 15+ years of military service and the base admiral's son. and this was 20 years ago, things have only gotten more competitive since.
what percentage of the total workforce do you think is employed by the government your state?-
Most government agencies are going to be the largest single employer within their locality.
I've listened to plenty of news segments in the last couple years plus about the shortage of government workers needed and how few from private make the jump over. The markets were still hiring like crazy so I don't blame people not picking government first but eventually it will become one of the few options available and even the government will start having hiring freezes. We don't lay people off that's for sure.
Out here on the west you just apply online and go through the accession process which is fairly standardized. Everyone takes the same initial test for reading and writing then go on to a specific job testing be it accounting, IT, Clerical work, etc. Plenty of positions only require a high school degree so you really only end up needing to pass that first one. Others might have a need for more specific skills like reading spreadsheets or typing speed.
Then it's 1-2 rounds of interviews and any necessary background checks especially for positions that give you access to sensitive data. In CA the application system is universal enough that most state and county agencies are grouped into the same job application site so you can search and apply with one account.
https://www.calopps.org/job-search
I see an Oracle Database Developer spot for the Water District opening here going for $136K starting and after you work for 4.5 years it tops out at $178K.
These jobs use a step pay system where they pay you a certain amount step 1 and it raises up basically every year until step 5 which is the highest. It's something most municipalities and government does to pay less since lots of people leave within 5 years so they pay less to start and then pay more the longer you stay.-
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It's not that they changed it's just things ebb and flow depending on the economy and culture at the time. We're in a phase currently where a lot of the government employees were hired in batches usually within a specific decade and are now approaching retirement age.
Right now lots are retiring and new management and hires are getting younger and younger. If you came in at the tail end of a hiring surge then you'd be bottom of the totem pole for a long time. If you came in at the front then your seniority increases like crazy.
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You can start and end whenever. Even starting at 40 and working to 65 is 25 years. Most pension systems I can tell has no age cap or % cap. If you retire before the payout (after working long enough to vest which depends on the agency, mine is 15 years) then you don't draw the pension until you hit that age.
If you are lucky like someone I know, she started with the city at age 22 graduated from college into a librarian job. She worked to age 45 and then switched to another agency (university) which was a different retirement system. New job pays more than before but she vested into her retirement which she will draw when she turns 55. Then if she decides to work to age 65 she can draw another retirement pension on top of the first. Some teachers do this as well if they start young enough and switch to a school system that is a different retirement system.
Technically I have my second pension with the military reserves which I won't get until age 58ish (factors affect how soon I can get it) and should amount to between 20-25% depending on if I have any more tours or deployments in the future. I've already have that one locked in.
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55 at 2.5% has not been the formula for years now.
If you were hired today you’d be using the last formula on this list.
https://www.calpers.ca.gov/page/active-members/retirement-benefits/benefit-factor-charts-
Or if you prefer a direct link using your example scenario they would pay out at 24.25%
https://www.calpers.ca.gov/docs/forms-publications/benefit-factors-state-misc-industrial-1-25-at-67.pdf-
That's one option of payout for certain job types. I work county and we use 2.5% at 55 for our system with CalPERS.
https://www.calpers.ca.gov/docs/forms-publications/benefit-factors-local-misc-2-5-at-55.pdf
It's a menu of retirement selections that depends on what the agency opts into and pays for and the job position can get. There's some that start at 1.25% but teachers get 2% and Public Safety get 2.7% at different payout ages. All of them listed here.
https://www.calpers.ca.gov/page/active-members/retirement-benefits/benefit-factor-charts
City and County agencies can either use CalPERS or their own system. Usually the biggest ones use their own like San Jose or SF.
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Super hard to get though. I spent two years trying to get a position with LA County. Was finally making progress with interviews when the pandemic hit and that was all she wrote.
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Maybe we can all just go back to IRC
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I actually worked for their now CEO at his previous company OpenFeint. Alright dude, overall.
But...
Based on Citron’s message to employees and my understanding of the business, Discord isn’t in dire financial straits, though it has yet to become profitable and is still trying to revive user growth after a surge during the pandemic. In his memo to employees, which you can read in full below, Citron said Discord grew its headcount too fast over the last few years — an admission that has become quite common among tech CEOs as of late.
That was the exact deal back in 2012, too. Some things never change.-
Like we had developers in the office playing Diablo 3 because there was no scoped work for them to do.
It was weird.
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It really sucks that no one just wants to make a good reliable product without glutting it with features no one ever asked for. Stability and maintenance are boring and don't inflate stock prices, I guess.
Zoom was a perfectly fine meeting client before the pandemic. We're all sick of it now, but as an IT person I am sick of Zoom trying to sell me Zoom Phone (Vonage), Zoom Team Chat (Slack), Zoom AI Companion, Zoom Calendar, etc etc. Every update makes the product worse and it should be so simple. Enshittification never ends.
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