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This CEO laid off nearly 80% of his staff because they refused to adopt AI fast enough. 2 years later, he says he’d do it again (fortune.com)

submitted 3 days ago by themachinestops@lemmy.dbzer0.com to c/technology@lemmy.world

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[–] tarknassus@lemmy.world 20 points 2 days ago (1 children)

"Vaughan was surprised to find it was often the technical staff..."

Tell me you're completely out of touch with your company and what it does without telling me you're completely out of touch with your company and what it does. FFS how is this guy the CEO? Oh, he's one of the founders? Brilliant.

Vaughan says he didn’t want to force anyone. “You can’t compel people to change, especially if they don’t believe.”

But he did. Change or be fired, basically.

“You multiply people…give people the ability to multiply themselves and do things at a pace,” he said, touting the company’s ability to build new customer-ready products in as little as four days, an unthinkable timeline in the old regime.

Ooh I bet some nefarious hacker types will be salivating at the incredibly rushed code base that is probably a spaghetti mess and as insecure as fuck.

Vaughan disclosed that the company, which he said is in the nine-figure revenue range, finished 2024 at “near 75% Ebitda”—all while completing a major acquisition, Khoros.

I had to look up EBITDA - some interesting points to consider when you look at this metric he used:

A negative EBITDA indicates that a business has fundamental problems with profitability. A positive EBITDA, on the other hand, does not necessarily mean that the business generates cash. This is because the cash generation of a business depends on capital expenditures (needed to replace assets that have broken down), taxes, interest and movements in working capital as well as on EBITDA.
While being a useful metric, one should not rely on EBITDA alone when assessing the performance of a company. The biggest criticism of using EBITDA as a measure to assess company performance is that it ignores the need for capital expenditures in its assessment.

Hmmm... I'm no accountant (I leave that to my actual accountant), but surely if they were being profitable it would sound better to say something like "We've remained profitable throughout and our earnings per quarter are on par if not greater than before."?

[–] lime@feddit.nu 9 points 2 days ago

I'm no accountant but surely if they were being profitable it would sound better to say something like "We've remained profitable throughout and our earnings per quarter are on par if not greater than before."?

no, because profitability isn't the key figure they are interested in. it's growth. i recently got fired because of disappointing growth; e.g. the increase in profitability was not as large as they expected. which means they still made more money than last year.

this is why expenditures get relegated to "externality" status; because otherwise projections would make it look like a company can not grow infinitely large, and surely that's not true