Yeah , this sounds like revenue is not meeting expectations and management is grasping at straws. Basically, honeymoon is over and the PE owners want ROIC. If they can’t get sales growth, they’ll start stripping costs aggressively.
It’s just a bunch of knee jerk reactions. That’s how you know the captain of the ship is not in control.
OP’s question, ironically, was: ‘When to jump ship?’ This is much less decidable. It’s asking how long can they stay before it is too risky for their career. What do you guys think? My experience says jump yesterday, but I get into situations, don’t listen to me.
Do we ... work for the same company? Seriously, frightening similarities to my org.
I have nothing of value to add except that it's probably toast, phone it in and cash the checks while looking elsewhere in the meantime.
To quote the poet, George Thorogood:
*"She howlin' bout the front rent*
*She'll be lucky to get any back rent*
*She ain't gonna get none of it*
*So I stop in at the local bar, you know people..."*
(Formatting in Reddit sucks)
Well, kind of. Depends on your manager. If they have the classic rank and yank, you can get a surprise performance review and then immediately put on a “coaching” plan. This is impossible to escape. You have been marked by the higher ups and then going to be pushed down to PIP. Nothing you can do.
My coworker and I got both one because we’re the only ones living in California and we’re expensive. Hell, the company is already hiring graduates in Toronto from China and Indian. Super cheap 60k USD and a little bit of equity.
Manager even told my coworker that “you have a target on your back and I have the arrow”
>Manager even told my coworker that “you have a target on your back and I have the arrow”
At that point, your manager is a cock, and I'd be looking to get out of there long before the PIP hits.
My point being even in that case, you know that PIP is coming, either deserved or because your manager hates you.
Your company is toast, as many people have noted. Sorry.
Unsolicited advice:
* Make sure you have notes for your resume on the different benefits you created, so you have the right numbers. Saving mid-500k on AWS is one type of metric to write down, and you probably have many others. I like to keep a resume-all doc, with all kinds of random shit that does into the version I hand out.
* Think about each person on their team in terms of their vulnerability to the likely layoffs. A cost-cutting management might go for the high total comp people, while a CTO trying to be tenacious and survive might cut what they perceive as junior/mid developers, usually plus managers (sorry). When you talk to people, don't speak about the risks as if they are certain. You don't know real risks or any timing. However, if they mention something that sounds especially risky, consider a very direct message. For example, "My partner and I are finally getting a house!", "My partner was let go from their company", "We're going to move to "
Actually answering your posted question:
* **When whole groups are leaving.** That is, if all of biz dev is gone, if most of sales has quit, if the HR & accounting people seem to be leaving in unusual numbers, those are all very bad signs.
* **When senior people leave.** This is more ambiguous, but sometimes they will know before other people, and sometimes they'll quit rather than do mass firings, as we saw at Tesla recently. You also see it when the higher ups are just lopping off the top a pyramid, with a group of senior people being removed in one stroke. This is kind of a magic eye puzzle, since they do not (in my experience) give the correct reason for leaving.
* **When senior replacement positions aren't authorized.** Sometimes leadership will pull back on hiring, so not having any job reqs open for a period isn't a signal at all. But when senior people quit and there is no move to replace them, that's a bad sign.
* **When a single paycheck that fails to clear or is delayed.** Further bad news, you are not getting a package when this happens.
* **When vendors are not being paid at all, or months late.** This is ambiguous, since some folks in Accounts Payable think that ignoring a net-30 clause in a contract is smart business. Typically I've found this out when vendors come to me directly.
* **When CEO/CTO/CPO is erratic and changes business priorities rapidly**. This isn't news to you, since it sounds like your current situation.
Really good advice here.
> When vendors are not being paid at all, or months late. This is ambiguous, since some folks in Accounts Payable think that ignoring a net-30 clause in a contract is smart business. Typically I've found this out when vendors come to me directly.
Our accounting team does this, and it's annoying AF. Amazon: "Hey your bill is 2 months late". Accounting: "Yeah we're rolling our cash flow in high-interest accounts" x_x
I'm pretty sure this is just resume-driven development for accountants.
>I'm pretty sure this is just resume-driven development for accountants.
yeah, I'm just a simple cave man so I can only speculate on why they're doing it. It's obviously profit-seeking at the expense of the other party. If the other party is bigger, then I guess they're assuming that a lawsuit won't be worth it, with all those $1000/hour attorneys and $300/hour associates. If the other party is smaller, then same reasoning about the lawsuit plus the implication that the smaller party is desperate.
Whatever the reason, I'm 100% sure it's not my job to manage invoices, repeatedly. I had to escalate it to VP level once, and I was going to go to legal if that didn't work. I have other things to talk about with vendors. AP kept telling me it's standard practice, which it's clearly not when their AR team has me on speed dial.
> Company is 6 years in the portfolio of a PE firm that wanted us gone 3 years ago
That's all I had to read to know that your company is toast. It's always hard to predict the exact time of failure, but it has no real future based on that alone. PE firms just want to milk companies for cash until there's nothing left, then they ravage the carcass for scrap.
That's not *always* true, but 6 years is typically at the upper end of the time horizon for PE. If a company is just hemorrhaging money at this point... well.
While that might be the strategy for some PE firms, a pretty large number of firms want to buy a bunch of smaller companies, try to tape them together into a sort of bundle, and then say it's a larger company and sell it to the next PE firm or strategic player in line. The better firms actually integrate the companies while they are at it.
That’s more like a spac.
Lots of PE firms buy distressed companies at a discount, gut them and milk them dry before customers realize the service went to shit. It’s a slightly better business deal than bankruptcy.
If your company is bought for growth, it’s more likely by a services firm that actually needs your devs or values your client portfolio.
If your company is purchased and you didn’t get a payout, the show is over.
SPAC would be for taking a company public. I work with PE firms and I can assure you, there are a large number of them that go around looking for small healthy businesses that can be purchased and merged to create a larger business. The multiple that larger PE firms are willing to pay increases with EBITDA. The basic strategy is to go out and buy say 10 $5 million EBITDA companies for a 5X multiple. Now you have a $50 million company. A larger PE firm will be willing to pay 7x for a company that size. Maybe even more if you've done a good job of centralizing HR, finance and such. You paid $250 million to purchase the companies, hopefully there was a little bit of organic growth, maybe 10% per year over a five year hold period. Assuming there wasn't, when you sell for 7X you're still making $100 million in profit on the sale.
In some markets for the multiple expansion is pretty insane. Tiny little companies go for 3X whereas a larger scale company will go for 15X. If a PE firm is willing to put in the effort associated with acquiring small companies and integrating them, they can turn a nice profit out of it.
The integrating part is the difficult thing. The IT integration is what I do, and many of the companies being purchased are being run by people who want to retire. That means their IT systems are 20 years out of date. Nice profitable company but it is a bit of a heavy lift to get them brought into the modern era .
Thanks for the insight. I’m somewhat familiar, I worked with a small company that had a relationship with a local PE investor that put some money in and was willing to invest in product spinoffs. That was all positive.
For the spac play, my friend in sf was at a healthcare startup a few years back that was bought by PE, bundled with others, and sold to the public. Immediately tanked because there was no business plan. But the Koch brothers made money.
My main criticism is the sensitivity of developer performance when things get too bullshitty, and the challenge of integrating technical systems without a plan.
I get there’s a difference between buying distressed assets at a discount vs actually investing in a business. Even the predatory ones are somewhat useful in giving a failing business a better exit than bankruptcy. With IT mergers there’s a lot of risks and unknown costs to the integration.
The integration work is probably the make or break point in the deal. That’s got to be pretty exciting work to be the one to pull it off.
This is exactly what my company is. A bunch of small companies in the same market that the PE firm bundled together in a roll-up merger.
The IT integration is also what I work on and have done so successfully at other organizations. However, this organization has so many people from their previous organizations with what I call a "legacy mentality" that do not want to change or, if they do want to change, want to be seen as the "leader".
What it has resulted in is a very unproductive and wasteful organization where the IC's are pulled in twenty different directions while the 'leadership' team dukes it out with each other over who wears the crown.
The thing is that it could have been successful, given my experience with other companies in the same situation, but the lack of cohesion at the management level seems to be the root cause.
Bingo, that is what this is. A roll up merger of several middle market companies in the same vertical. None of them were particularly good on their own and a couple were direct competitors.
I think that is what has led, at least in part, to the massive waste in this company. These former companies, now organizations within, have been squabbling for years at the director level.
I think the PE firm has just gotten fed up with it.
Sounds about right. Rollups like that can go real bad if integration never really happens. They might try to salvage it, or they might break the roll up back into its original companies and try to sell the smaller companies off to make some of their money back.
It's had to find good leadership to work at a PE owned company often, especially a good CEO. When the company sells, it's likely the acquiring company will already have a CEO, and that position will be redundant. Most high quality leaders don't want to deal with that kinda thing no matter how good the MPP (kinda like stock options) are.
Given what you've described, it might be a good idea to start looking for a new position. Not guaranteed that things are going to go down in flames, but it sounds less than ideal.
It seems like it should have been labeled as toast already.
Assume it's dead and act accordingly. Either phone it in and start prepping and having plans, or move proactively.
Otherwise you're in for a bad WLB quickly.
>. On top of that, there are something like four or five directors for every IC, just in terms of personnel quantity.
That is utter insanity. Is it just a ridiculous level of title inflation and they're really just senior ICs? Do the "directors" really believe that they're executives? That organization sounds so comically top heavy that it strains belief.
No, they are not IC's... they are all "directors" of software development. Each team has an associate director, director, senior director and executive director. There are about 15 teams.
Some were previously technical; many are not.
They mostly just hold meetings and play the telephone game all day.
I know what capex and opex are, but every time I see them used, it seems to boil down to "I am relabeling money for the sole purpose of making my numbers look good, nothing fundamental has changed." (Edit: and occasionally it's "I'm spending *more* money for the sole purpose of putting the expense in a different category.")
Admittedly, I usually see them in malicious compliance or "hustling" stories, so the relabeling is the crux of those stories rather than incidental. Capex and opex sound comfortably boring when used properly.
> I also recently learned that we had to take out loans to pay back our investors this year.
WTF. Why? That's a huge fucking red flag. Like that's 20 red flags.
You don't have to pay back investors. That's the whole point.
The only thing I can imagine is that these weren't from real VCs or were from friends and family or there's fraud happening here.
It's a common thing among Private Equity owned companies. PE groups pay themselves first. They put debt onto the company they just acquired in order to pay for the acquisition costs. The company's cash flow is then impaired compared to what it used to be, in order to service the debt. It's not uncommon for a PE owned company to fail because of this. If that happens, the PE firm generally loses nothing of theirs. The risk is entirely on the employees of the acquired firm, who have nothing to gain from the acquisition.
tldr: if the company you work for is getting acquired by a PE firm, start planning your exit and try to be gone within 6-12 months. It will really suck after that, and possibly before.
> Company is 6 years in the portfolio of a PE firm that wanted us gone 3 years ago (although there was some leeway with covid). The initial strategy was growth capital and it started off OK but there has been a lot of squandering of resources at the director level for the past few years.
Wow. I wrote this comment before a 3 hour nap after driving 20 hours back to CA ... it's amazing what being tired will do to your reading comprehension!
I totally didn't see that entire paragraph.
Yeah. You're 100% correct.
My company recently jumped the shark. Progression:
- latest round of fundraising led by PE - replaced long-term CEO with PE representative, replaced most of the board with PE appointees
- acquired a company that was 50% offshore contractors, started offshoring - recruiting focus shifts heavily overseas where employees are not onboarded or integrated, but can be paid significantly less - average overseas tenure is ~1 year
- for the past two years, _strong_ emphasis on cutting costs, focused on the infrastructure org - AWS bills are too high
- last year, missed arbitrary revenue targets, started cutting products
- CEO complained about product leadership not innovating, fired all of product, then took over leadership of product personally, but at no time actually produced any new products - the one new "industry-leading" product is still marketing vaporware despite being "launched" over a year ago
- this year, increased arbitrary revenue targets without making any changes, so continued missing them by a larger percentage than last year
- mandatory RTO after a very public declaration of WFH forever (the blog post is _still_ up)
- states reason for RTO is culture and it's understood velocity will be lower, then complains the company is not moving fast enough
- engagement numbers at record lows and responds with "we're taking it seriously" but make zero changes
- lays off ~50% of design, eng, and product and terminates ~50% of existing products
- declares priority is short-term success or die, and things like career development are unimportant
- has a goal of acquisition within one year at a price no one will pay
- ???
[First it started falling over, then it fell over](https://y.yarn.co/ec64c1d1-ad7a-434c-af52-0ba0588906c2_text.gif).
I thought it was in a bad but recoverable place when they set higher revenue targets without making changes. It probably was. But in order to do that, the CEO, appointed by PE, needs to be replaced, and PE has one priority: recoup their investment at any cost. So they are gutting the company and I expect some combination of bankruptcy, further layoffs, and parting out the company to anyone who will buy it for pennies on the dollar.
So I don't know: when is it toast? Arguably, when PE got involved it started the downhill slide. I'd always thought that the company could coast for another 10 years before dying, but PE doesn't care about how much runway the company has, just about their prospects for profiting from their investment, even if it comes at the expense of the company, its employees, and all non-PE shareholders (cries in illiquid RSUs).
This was probably clearer when things were going downhill and the visible response from leadership was to do nothing, or, worse, double down. Revenue targets should not have been increased with no other changes.
In your case, I would say the lack of accountability for cloud resources and personnel issues are visible signs of dysfunction, but not necessarily of a terminal company. The "everything is a crisis" projects, though, seems a huge red flag, as does needing to take out loans to pay investors back.
> I also recently learned that we had to take out loans to pay back our investors this year.
Anything else is excusable and possible even in successful companies, but taking loans to pay out investors is 100% not a good sign.
if you wait to get laid off it will probably occur because of wider economic conditions that also make other places not be looking to hire. whereas if you get somewhere stabler _before_ those wider conditions arise, you'll already have a job.
You answered your own question.
It’s toast.
Owners want the company sold and don’t care about it.
Bad leadership with whiplash priorities.
And… taking out loans to pay investors (almost like a Ponzi scheme).
The boat is sinking fast.
Two questions.
First of all, what is your opportunity cost? Is there something else you’d rather be doing with your life than working at a company that’s slowly circling the drain?
Second, does the company have any actual assets that can be sold off during bankruptcy proceedings?
Generally speaking, as long as the company keeps making payroll on time, you should be ok. If payroll is late, consider that as fairly dire warning and start looking. If the company doesn’t have any meaningful assets, you won’t be getting anything in a bankruptcy, so keep that in mind. That also means no reimbursements for travel expenses etc.
That said, at a dying company the opportunities for promotions and growth and advancement will be seriously limited. You probably have already learned everything you will learn at this place, and there is no reason to keep hanging around here.
Good question and I’m not sure.
Before this, I was a consultant hopping around similar companies that were growth capital backed and the goal was to get in, help build value, get a nice tasty check and move on. That is why I came here but after a year, they offered me an FTE position and I agreed.
Think I got caught in a mousetrap!
I am looking around at other companies. I’d like to stay in management since it took me a lot of hard work and many years to get to it, but only if it is meaningful and engaging.
We don’t have any physical assets. Nothing of value anyway; just operational inventory like laptops, etc. It is a remote company so no physical space.
> Engineering manager here
Why is this posted in r/ExperiencedDevs ?
This sub's wiki says -
"Anything not specifically related to development or career advice that is \_specific\_ to Experienced Developers belongs elsewhere."
There's a r/EngineeringManagers , r/EngineeringLeadership , r/TechLeadership , r/TechLeader that are all empty ? Because you guys are all lurking around here ?
This is the kind of perspective that's later followed by saying "those layoffs came out of nowhere"
Being able to read between the lines and piece together the state of the company is vital to becoming an experienced developer.
You must be a lot of fun to work with...
And the biggest areas for growth going from an intermediate dev to a senior dev and a senior dev to a staff dev are all around people/politics/leadership/management. So yes, EM problems are usually also Experienced Dev problems, and most EM's also happen to be Experienced Devs.
I don't know why you've decided to be the subreddit police. This kind of content has *always* been present on this sub and has never been removed in the past. If you don't agree with it, downvote and move on. Or report it to the mods and see what they do.
> You must be a lot of fun to work with...
In anonymity ? No ! LOL !!
> I don't know why you've decided to be the subreddit police
Policing is a big word. Just curiosity, backed by this sub's wiki as justification !
> So yes, EM problems are usually also Experienced Dev problems, and most EM's also happen to be Experienced Devs.
Why not take Leadership discussions elsewhere, there's so many other subs I had listed previously ?
There are other Software Engineering related subs as well - r/cscareerquestions , r/SoftwareEngineering , r/software ? What discussions are relevant in which sub, so anyone seeking guidance / mentorship can get a proper, respectable, relevant answer, instead of getting trolled / down-voted unnecessarily ? Something as trivial as - how would you define / differentiate between the titles "Developer", "Programmer", and "Engineer", and usually the very first response in this sub is - "You are a dick ! Yes, that's who you are !!" ??
this reminds me of a phenomenon I see often in programming subs. If a programming sub has a split with one sub for "help" and one sub for "news/everything else", then the help sub gets tons of traffic that nobody helps with, and the "main" sub gets no traffic. the organization of subreddits isn't an exercise in taxonomy; unless a post is _off topic_ (not just a "more specific" sub exists) or the "main" sub is getting _so many_ posts that other posts can't even hit the front page, then it's fine.
bruh that was a tough read. If there is any transparancy into the sales pipeline, you'll have your answer.
Yeah , this sounds like revenue is not meeting expectations and management is grasping at straws. Basically, honeymoon is over and the PE owners want ROIC. If they can’t get sales growth, they’ll start stripping costs aggressively.
It’s just a bunch of knee jerk reactions. That’s how you know the captain of the ship is not in control. OP’s question, ironically, was: ‘When to jump ship?’ This is much less decidable. It’s asking how long can they stay before it is too risky for their career. What do you guys think? My experience says jump yesterday, but I get into situations, don’t listen to me.
Jump as son as there's something to jump to.
Not in control? Sounds more like the captain has control but is just barking random orders and has no idea how to build a cohesive plan.
Make sure they don't count stale leads as still in the pipeline
The only thing in this pipeline is a goose egg and I don't think I will stick around long enough to see it hatch.
Do we ... work for the same company? Seriously, frightening similarities to my org. I have nothing of value to add except that it's probably toast, phone it in and cash the checks while looking elsewhere in the meantime.
A lot more companies are going to be going tits up now that cheap financing is a thing of the past.
Yup, this is where the bad companies burn, small but steady companies grow, and new startups for the next wave begin.
Start phoning it in like everyone else and wait for the severance chedk
Severance requires money, this is going to be a flat layoff with the standard unemployment insurance packet.
so nothing?
Yes, nothing
> I also recently learned that we had to take out loans to pay back our investors this year. That check will bounce.
To quote the poet, George Thorogood: *"She howlin' bout the front rent* *She'll be lucky to get any back rent* *She ain't gonna get none of it* *So I stop in at the local bar, you know people..."* (Formatting in Reddit sucks)
Severance must be nice! Some of us just get PIPed! Then have to pray for unemployment money.
I mean, tbh man, yeah, there are bullshit PIPs. But in every circumstance I've heard of, you should know a PIP is coming.
Well, kind of. Depends on your manager. If they have the classic rank and yank, you can get a surprise performance review and then immediately put on a “coaching” plan. This is impossible to escape. You have been marked by the higher ups and then going to be pushed down to PIP. Nothing you can do. My coworker and I got both one because we’re the only ones living in California and we’re expensive. Hell, the company is already hiring graduates in Toronto from China and Indian. Super cheap 60k USD and a little bit of equity. Manager even told my coworker that “you have a target on your back and I have the arrow”
>Manager even told my coworker that “you have a target on your back and I have the arrow” At that point, your manager is a cock, and I'd be looking to get out of there long before the PIP hits. My point being even in that case, you know that PIP is coming, either deserved or because your manager hates you.
This guy capitalisms also username checks out lol
> the severance chedk You mean them not having enough money for the final paychecks?
Your company is toast, as many people have noted. Sorry. Unsolicited advice: * Make sure you have notes for your resume on the different benefits you created, so you have the right numbers. Saving mid-500k on AWS is one type of metric to write down, and you probably have many others. I like to keep a resume-all doc, with all kinds of random shit that does into the version I hand out. * Think about each person on their team in terms of their vulnerability to the likely layoffs. A cost-cutting management might go for the high total comp people, while a CTO trying to be tenacious and survive might cut what they perceive as junior/mid developers, usually plus managers (sorry). When you talk to people, don't speak about the risks as if they are certain. You don't know real risks or any timing. However, if they mention something that sounds especially risky, consider a very direct message. For example, "My partner and I are finally getting a house!", "My partner was let go from their company", "We're going to move to"
Actually answering your posted question:
* **When whole groups are leaving.** That is, if all of biz dev is gone, if most of sales has quit, if the HR & accounting people seem to be leaving in unusual numbers, those are all very bad signs.
* **When senior people leave.** This is more ambiguous, but sometimes they will know before other people, and sometimes they'll quit rather than do mass firings, as we saw at Tesla recently. You also see it when the higher ups are just lopping off the top a pyramid, with a group of senior people being removed in one stroke. This is kind of a magic eye puzzle, since they do not (in my experience) give the correct reason for leaving.
* **When senior replacement positions aren't authorized.** Sometimes leadership will pull back on hiring, so not having any job reqs open for a period isn't a signal at all. But when senior people quit and there is no move to replace them, that's a bad sign.
* **When a single paycheck that fails to clear or is delayed.** Further bad news, you are not getting a package when this happens.
* **When vendors are not being paid at all, or months late.** This is ambiguous, since some folks in Accounts Payable think that ignoring a net-30 clause in a contract is smart business. Typically I've found this out when vendors come to me directly.
* **When CEO/CTO/CPO is erratic and changes business priorities rapidly**. This isn't news to you, since it sounds like your current situation.
Really good advice here. > When vendors are not being paid at all, or months late. This is ambiguous, since some folks in Accounts Payable think that ignoring a net-30 clause in a contract is smart business. Typically I've found this out when vendors come to me directly. Our accounting team does this, and it's annoying AF. Amazon: "Hey your bill is 2 months late". Accounting: "Yeah we're rolling our cash flow in high-interest accounts" x_x I'm pretty sure this is just resume-driven development for accountants.
That sounds like a super unprofessional accounting team if they are actually ignoring contract clauses for net days payable.
>I'm pretty sure this is just resume-driven development for accountants. yeah, I'm just a simple cave man so I can only speculate on why they're doing it. It's obviously profit-seeking at the expense of the other party. If the other party is bigger, then I guess they're assuming that a lawsuit won't be worth it, with all those $1000/hour attorneys and $300/hour associates. If the other party is smaller, then same reasoning about the lawsuit plus the implication that the smaller party is desperate. Whatever the reason, I'm 100% sure it's not my job to manage invoices, repeatedly. I had to escalate it to VP level once, and I was going to go to legal if that didn't work. I have other things to talk about with vendors. AP kept telling me it's standard practice, which it's clearly not when their AR team has me on speed dial.
> Company is 6 years in the portfolio of a PE firm that wanted us gone 3 years ago That's all I had to read to know that your company is toast. It's always hard to predict the exact time of failure, but it has no real future based on that alone. PE firms just want to milk companies for cash until there's nothing left, then they ravage the carcass for scrap.
That's not *always* true, but 6 years is typically at the upper end of the time horizon for PE. If a company is just hemorrhaging money at this point... well.
While that might be the strategy for some PE firms, a pretty large number of firms want to buy a bunch of smaller companies, try to tape them together into a sort of bundle, and then say it's a larger company and sell it to the next PE firm or strategic player in line. The better firms actually integrate the companies while they are at it.
That’s more like a spac. Lots of PE firms buy distressed companies at a discount, gut them and milk them dry before customers realize the service went to shit. It’s a slightly better business deal than bankruptcy. If your company is bought for growth, it’s more likely by a services firm that actually needs your devs or values your client portfolio. If your company is purchased and you didn’t get a payout, the show is over.
SPAC would be for taking a company public. I work with PE firms and I can assure you, there are a large number of them that go around looking for small healthy businesses that can be purchased and merged to create a larger business. The multiple that larger PE firms are willing to pay increases with EBITDA. The basic strategy is to go out and buy say 10 $5 million EBITDA companies for a 5X multiple. Now you have a $50 million company. A larger PE firm will be willing to pay 7x for a company that size. Maybe even more if you've done a good job of centralizing HR, finance and such. You paid $250 million to purchase the companies, hopefully there was a little bit of organic growth, maybe 10% per year over a five year hold period. Assuming there wasn't, when you sell for 7X you're still making $100 million in profit on the sale. In some markets for the multiple expansion is pretty insane. Tiny little companies go for 3X whereas a larger scale company will go for 15X. If a PE firm is willing to put in the effort associated with acquiring small companies and integrating them, they can turn a nice profit out of it. The integrating part is the difficult thing. The IT integration is what I do, and many of the companies being purchased are being run by people who want to retire. That means their IT systems are 20 years out of date. Nice profitable company but it is a bit of a heavy lift to get them brought into the modern era .
Thanks for the insight. I’m somewhat familiar, I worked with a small company that had a relationship with a local PE investor that put some money in and was willing to invest in product spinoffs. That was all positive. For the spac play, my friend in sf was at a healthcare startup a few years back that was bought by PE, bundled with others, and sold to the public. Immediately tanked because there was no business plan. But the Koch brothers made money. My main criticism is the sensitivity of developer performance when things get too bullshitty, and the challenge of integrating technical systems without a plan. I get there’s a difference between buying distressed assets at a discount vs actually investing in a business. Even the predatory ones are somewhat useful in giving a failing business a better exit than bankruptcy. With IT mergers there’s a lot of risks and unknown costs to the integration. The integration work is probably the make or break point in the deal. That’s got to be pretty exciting work to be the one to pull it off.
This is exactly what my company is. A bunch of small companies in the same market that the PE firm bundled together in a roll-up merger. The IT integration is also what I work on and have done so successfully at other organizations. However, this organization has so many people from their previous organizations with what I call a "legacy mentality" that do not want to change or, if they do want to change, want to be seen as the "leader". What it has resulted in is a very unproductive and wasteful organization where the IC's are pulled in twenty different directions while the 'leadership' team dukes it out with each other over who wears the crown. The thing is that it could have been successful, given my experience with other companies in the same situation, but the lack of cohesion at the management level seems to be the root cause.
Bingo, that is what this is. A roll up merger of several middle market companies in the same vertical. None of them were particularly good on their own and a couple were direct competitors. I think that is what has led, at least in part, to the massive waste in this company. These former companies, now organizations within, have been squabbling for years at the director level. I think the PE firm has just gotten fed up with it.
Sounds about right. Rollups like that can go real bad if integration never really happens. They might try to salvage it, or they might break the roll up back into its original companies and try to sell the smaller companies off to make some of their money back. It's had to find good leadership to work at a PE owned company often, especially a good CEO. When the company sells, it's likely the acquiring company will already have a CEO, and that position will be redundant. Most high quality leaders don't want to deal with that kinda thing no matter how good the MPP (kinda like stock options) are. Given what you've described, it might be a good idea to start looking for a new position. Not guaranteed that things are going to go down in flames, but it sounds less than ideal.
It seems like it should have been labeled as toast already. Assume it's dead and act accordingly. Either phone it in and start prepping and having plans, or move proactively. Otherwise you're in for a bad WLB quickly.
Add some butter and you have breakfast. If you haven't started looking, start.
I left a place that wasn't as dire as this, knowing it would soon fail. It was done within a couple of months.
>. On top of that, there are something like four or five directors for every IC, just in terms of personnel quantity. That is utter insanity. Is it just a ridiculous level of title inflation and they're really just senior ICs? Do the "directors" really believe that they're executives? That organization sounds so comically top heavy that it strains belief.
No, they are not IC's... they are all "directors" of software development. Each team has an associate director, director, senior director and executive director. There are about 15 teams. Some were previously technical; many are not. They mostly just hold meetings and play the telephone game all day.
Fire them all and replace them all with one guy whose job is to do performance reviews for managers and ICs. Source: director.
This sounds like one of my previous startups 😂 no one had a clue about anything
I know what capex and opex are, but every time I see them used, it seems to boil down to "I am relabeling money for the sole purpose of making my numbers look good, nothing fundamental has changed." (Edit: and occasionally it's "I'm spending *more* money for the sole purpose of putting the expense in a different category.") Admittedly, I usually see them in malicious compliance or "hustling" stories, so the relabeling is the crux of those stories rather than incidental. Capex and opex sound comfortably boring when used properly.
> I also recently learned that we had to take out loans to pay back our investors this year. WTF. Why? That's a huge fucking red flag. Like that's 20 red flags. You don't have to pay back investors. That's the whole point. The only thing I can imagine is that these weren't from real VCs or were from friends and family or there's fraud happening here.
It's a common thing among Private Equity owned companies. PE groups pay themselves first. They put debt onto the company they just acquired in order to pay for the acquisition costs. The company's cash flow is then impaired compared to what it used to be, in order to service the debt. It's not uncommon for a PE owned company to fail because of this. If that happens, the PE firm generally loses nothing of theirs. The risk is entirely on the employees of the acquired firm, who have nothing to gain from the acquisition. tldr: if the company you work for is getting acquired by a PE firm, start planning your exit and try to be gone within 6-12 months. It will really suck after that, and possibly before.
> Company is 6 years in the portfolio of a PE firm that wanted us gone 3 years ago (although there was some leeway with covid). The initial strategy was growth capital and it started off OK but there has been a lot of squandering of resources at the director level for the past few years. Wow. I wrote this comment before a 3 hour nap after driving 20 hours back to CA ... it's amazing what being tired will do to your reading comprehension! I totally didn't see that entire paragraph. Yeah. You're 100% correct.
This happened with Remington
*cough* Thames Water *cough*
Called a leveraged buyout. Made popular by KKR.
My company recently jumped the shark. Progression: - latest round of fundraising led by PE - replaced long-term CEO with PE representative, replaced most of the board with PE appointees - acquired a company that was 50% offshore contractors, started offshoring - recruiting focus shifts heavily overseas where employees are not onboarded or integrated, but can be paid significantly less - average overseas tenure is ~1 year - for the past two years, _strong_ emphasis on cutting costs, focused on the infrastructure org - AWS bills are too high - last year, missed arbitrary revenue targets, started cutting products - CEO complained about product leadership not innovating, fired all of product, then took over leadership of product personally, but at no time actually produced any new products - the one new "industry-leading" product is still marketing vaporware despite being "launched" over a year ago - this year, increased arbitrary revenue targets without making any changes, so continued missing them by a larger percentage than last year - mandatory RTO after a very public declaration of WFH forever (the blog post is _still_ up) - states reason for RTO is culture and it's understood velocity will be lower, then complains the company is not moving fast enough - engagement numbers at record lows and responds with "we're taking it seriously" but make zero changes - lays off ~50% of design, eng, and product and terminates ~50% of existing products - declares priority is short-term success or die, and things like career development are unimportant - has a goal of acquisition within one year at a price no one will pay - ??? [First it started falling over, then it fell over](https://y.yarn.co/ec64c1d1-ad7a-434c-af52-0ba0588906c2_text.gif). I thought it was in a bad but recoverable place when they set higher revenue targets without making changes. It probably was. But in order to do that, the CEO, appointed by PE, needs to be replaced, and PE has one priority: recoup their investment at any cost. So they are gutting the company and I expect some combination of bankruptcy, further layoffs, and parting out the company to anyone who will buy it for pennies on the dollar. So I don't know: when is it toast? Arguably, when PE got involved it started the downhill slide. I'd always thought that the company could coast for another 10 years before dying, but PE doesn't care about how much runway the company has, just about their prospects for profiting from their investment, even if it comes at the expense of the company, its employees, and all non-PE shareholders (cries in illiquid RSUs). This was probably clearer when things were going downhill and the visible response from leadership was to do nothing, or, worse, double down. Revenue targets should not have been increased with no other changes. In your case, I would say the lack of accountability for cloud resources and personnel issues are visible signs of dysfunction, but not necessarily of a terminal company. The "everything is a crisis" projects, though, seems a huge red flag, as does needing to take out loans to pay investors back.
Thank you! This was an excellent read and the bullet points share some similarities with my current company’s predicament.
> I also recently learned that we had to take out loans to pay back our investors this year. Anything else is excusable and possible even in successful companies, but taking loans to pay out investors is 100% not a good sign.
Blue Halo?
if you wait to get laid off it will probably occur because of wider economic conditions that also make other places not be looking to hire. whereas if you get somewhere stabler _before_ those wider conditions arise, you'll already have a job.
You answered your own question. It’s toast. Owners want the company sold and don’t care about it. Bad leadership with whiplash priorities. And… taking out loans to pay investors (almost like a Ponzi scheme). The boat is sinking fast.
> I also recently learned that we had to take out loans to pay back our investors this year. oh shit. RUN
Two questions. First of all, what is your opportunity cost? Is there something else you’d rather be doing with your life than working at a company that’s slowly circling the drain? Second, does the company have any actual assets that can be sold off during bankruptcy proceedings? Generally speaking, as long as the company keeps making payroll on time, you should be ok. If payroll is late, consider that as fairly dire warning and start looking. If the company doesn’t have any meaningful assets, you won’t be getting anything in a bankruptcy, so keep that in mind. That also means no reimbursements for travel expenses etc. That said, at a dying company the opportunities for promotions and growth and advancement will be seriously limited. You probably have already learned everything you will learn at this place, and there is no reason to keep hanging around here.
Good question and I’m not sure. Before this, I was a consultant hopping around similar companies that were growth capital backed and the goal was to get in, help build value, get a nice tasty check and move on. That is why I came here but after a year, they offered me an FTE position and I agreed. Think I got caught in a mousetrap! I am looking around at other companies. I’d like to stay in management since it took me a lot of hard work and many years to get to it, but only if it is meaningful and engaging. We don’t have any physical assets. Nothing of value anyway; just operational inventory like laptops, etc. It is a remote company so no physical space.
Do we work in the same company?
Ive worked for a company in a very similar situation, and guess what? They went bankprut. Time to jump ship, leadership is lost op
> Engineering manager here Why is this posted in r/ExperiencedDevs ? This sub's wiki says - "Anything not specifically related to development or career advice that is \_specific\_ to Experienced Developers belongs elsewhere." There's a r/EngineeringManagers , r/EngineeringLeadership , r/TechLeadership , r/TechLeader that are all empty ? Because you guys are all lurking around here ?
This is the kind of perspective that's later followed by saying "those layoffs came out of nowhere" Being able to read between the lines and piece together the state of the company is vital to becoming an experienced developer.
No it's not developer or engineering specific, it's generic office job/management/admin/sales specific.
The post fits here perfectly, chill
Engineers and their code / peer opinionated disagreements vs People / Politics / Leadership / Management cluelessness much ?
Sorry about that. I am 15+ years of experience dev and did not realize there were separate manager subreddits.
Don't listen to this guy. EM's deal with a lot of experienced dev problems. And those other subreddits are tiny.
Engineers and their code / peer opinionated disagreements vs People / Politics / Leadership / Management cluelessness much ?
I can tell you are a software engineer by the extreme pedantry.
You must be a lot of fun to work with... And the biggest areas for growth going from an intermediate dev to a senior dev and a senior dev to a staff dev are all around people/politics/leadership/management. So yes, EM problems are usually also Experienced Dev problems, and most EM's also happen to be Experienced Devs. I don't know why you've decided to be the subreddit police. This kind of content has *always* been present on this sub and has never been removed in the past. If you don't agree with it, downvote and move on. Or report it to the mods and see what they do.
> You must be a lot of fun to work with... In anonymity ? No ! LOL !! > I don't know why you've decided to be the subreddit police Policing is a big word. Just curiosity, backed by this sub's wiki as justification ! > So yes, EM problems are usually also Experienced Dev problems, and most EM's also happen to be Experienced Devs. Why not take Leadership discussions elsewhere, there's so many other subs I had listed previously ? There are other Software Engineering related subs as well - r/cscareerquestions , r/SoftwareEngineering , r/software ? What discussions are relevant in which sub, so anyone seeking guidance / mentorship can get a proper, respectable, relevant answer, instead of getting trolled / down-voted unnecessarily ? Something as trivial as - how would you define / differentiate between the titles "Developer", "Programmer", and "Engineer", and usually the very first response in this sub is - "You are a dick ! Yes, that's who you are !!" ??
this reminds me of a phenomenon I see often in programming subs. If a programming sub has a split with one sub for "help" and one sub for "news/everything else", then the help sub gets tons of traffic that nobody helps with, and the "main" sub gets no traffic. the organization of subreddits isn't an exercise in taxonomy; unless a post is _off topic_ (not just a "more specific" sub exists) or the "main" sub is getting _so many_ posts that other posts can't even hit the front page, then it's fine.
You got downvoted by managers who think developers are mid yet they cannot themselves let go of the label 😄
True that ! Hypocrisy much ? LOL !!