GTA 6 publisher Take-Two reportedly shutting Roll7 and Intercept Games

Quoting: Mountain ManLike I said, if increasing profits was as easy as handing out raises like candy, then everybody would be doing it.

Funny nobody told the CEO that. How are you managing to not see that your argument is utterly inconsistent?

Look, there's two basic kinds of bosses of a company. There's the kind that people who wish our system worked as advertised think about: People like my son-in-law, who started from nothing or not very much and built up a business from nothing and who know it inside and out. They do exist, there are even quite a few of them, although they tend to be the bosses of small companies. And then there's the kind that was born either rich or well-to-do, went to a prestigious university and got an MBA. They know how to schmooze with other rich, connected people and how to maximize stock price next quarter so they can make a bunch of money from their stock options. They know a bit about how to move money around in companies. They know nothing about the specifics of any given company or how its business actually works, because they have been taught that money and people are completely universal and exchangeable and the specifics of the business don't matter if you know how to move money. They tend to move from company to company, often in quite different kinds of businesses because they think the specifics don't matter. And when they lay people off, it is usually because although in the long run those people probably contribute to the bottom line, in the short term dumping them will goose the stock price because most of the investors are ignorant and they only see (reduction in expenses == bigger dividends next quarter, or money plowed into share buybacks). And that second kind, is the kind that give themselves $26 million-a-year raises. And they are the kind that are most influential in the economy.

Also the kind that gives you situations like Boeing, where the product goes to shit because of all those years getting stratospheric stock prices from the visionary cost-cutting. Of course by that time a few people have made a stack of money--all the layoffs and outsourcing and elimination of quality control did create that result, so in that sense it wasn't stupid. But it wasn't good for the company, or the workers, or the customers, or the people who got killed in the planes, or the murdered whistleblowers.


Last edited by Purple Library Guy on 4 May 2024 at 6:23 pm UTC

Quoting: Purple Library Guy

Quoting: Mountain ManLike I said, if increasing profits was as easy as handing out raises like candy, then everybody would be doing it.

Funny nobody told the CEO that. How are you managing to not see that your argument is utterly inconsistent?

Look, there's two basic kinds of bosses of a company. There's the kind that people who wish our system worked as advertised think about: People like my son-in-law, who started from nothing or not very much and built up a business from nothing and who know it inside and out. They do exist, there are even quite a few of them, although they tend to be the bosses of small companies. And then there's the kind that was born either rich or well-to-do, went to a prestigious university and got an MBA. They know how to schmooze with other rich, connected people and how to maximize stock price next quarter so they can make a bunch of money from their stock options. They know a bit about how to move money around in companies. They know nothing about the specifics of any given company or how its business actually works, because they have been taught that money and people are completely universal and exchangeable and the specifics of the business don't matter if you know how to move money. They tend to move from company to company, often in quite different kinds of businesses because they think the specifics don't matter. And when they lay people off, it is usually because although in the long run those people probably contribute to the bottom line, in the short term dumping them will goose the stock price because most of the investors are ignorant and they only see (reduction in expenses == bigger dividends next quarter, or money plowed into share buybacks). And that second kind, is the kind that give themselves $26 million-a-year raises. And they are the kind that are most influential in the economy.

Also the kind that gives you situations like Boeing, where the product goes to shit because of all those years getting stratospheric stock prices from the visionary cost-cutting. Of course by that time a few people have made a stack of money--all the layoffs and outsourcing and elimination of quality control did create that result, so in that sense it wasn't stupid. But it wasn't good for the company, or the workers, or the customers, or the people who got killed in the planes, or the murdered whistleblowers.

You are generalizing to a ridiculous degree.
CEOs of large corporations are not all clueless rich kids just as small business owners are not all virtuous. Furthermore, you don't know anything about why the layoffs happened in this specific case, but that's not going to stop you from accusing the CEO of being evil. I doubt it was an arbitrary decision. Most likely he had other managers and company accountants advising him and answering questions -- How long have they been working on this game? How much money has it cost us so far? How much longer until it's ready for release, and how much more will it cost? What are the projected sales? What is the expected profit? -- and then he made the best decision for the company based on that information.

You mentioned your son is a business owner. Tell me, would he continue to pay a team of employees who are costing his company literally more than they're worth? Would he cut his own salary in order to keep them around? I suspect the answer to both questions is no.


Last edited by Mountain Man on 4 May 2024 at 8:17 pm UTC

There is a problem with the CEO making more money after cutting all those people. But guess what, it's exactly how CEO pay incentivizes them to make decisions. Say your base salary is $1M with the potential to make $2M when the company meets certain annual profit goals. Guess what you're going to do when the profit numbers don't look good.

Yes, there is a problem with the model. And yes, there are other business models that share more of the wealth, so solutions already exist to CEO caps. But why don't those other companies hold much market share? I'm guessing one of the reasons is start-up money. Investors aren't going to give money to an entertainment company for charity -- they want something back for letting a company "borrow" their money and taking the risk that the company may never be capable of paying it back. And then you get CEO's driven with a profit purpose.

Quoting: Mountain ManYou mentioned your son is a business owner. Tell me, would he continue to pay a team of employees who are costing his company literally more than they're worth? Would he cut his own salary in order to keep them around? I suspect the answer to both questions is no.

I suspect he'd get them to do something else that wouldn't cost the company more than they're worth. Probably he isn't stupid enough to hire a team of employees to do money-losing stuff in the first place. But I'm definitely sure that if he managed his company into a money-losing situation and really had to cut employees, he would tighten his belt too--he would not tell the remaining employees "Yeah, you know those guys we had to let go to save money? I took their salaries for myself, actually three times that, because screw that 'saving money' stuff."

Quoting: 14There is a problem with the CEO making more money after cutting all those people. But guess what, it's exactly how CEO pay incentivizes them to make decisions. Say your base salary is $1M with the potential to make $2M when the company meets certain annual profit goals. Guess what you're going to do when the profit numbers don't look good.

Yes, there is a problem with the model. And yes, there are other business models that share more of the wealth, so solutions already exist to CEO caps. But why don't those other companies hold much market share?

Your explanation is possible. Or, it's possible that firms with models that promote exorbitant CEO pay and short-term-oriented management practices actually outcompete firms without. But the explanation I find the most plausible is that the people who decide on how the models for CEO pay will work . . . are mostly either CEOs, or at least wealthy people who spend much of their social time interacting with CEOs. So for instance, boards of directors for company A are often staffed with the CEOs of companies B, C and D, who in turn have the CEO of company A on their boards of directors. So, I wonder what kind of compensation model those boards of directors will choose?

Quoting: Purple Library Guy

Quoting: Mountain ManYou mentioned your son is a business owner. Tell me, would he continue to pay a team of employees who are costing his company literally more than they're worth? Would he cut his own salary in order to keep them around? I suspect the answer to both questions is no.

I suspect he'd get them to do something else that wouldn't cost the company more than they're worth. Probably he isn't stupid enough to hire a team of employees to do money-losing stuff in the first place. But I'm definitely sure that if he managed his company into a money-losing situation and really had to cut employees, he would tighten his belt too--he would not tell the remaining employees "Yeah, you know those guys we had to let go to save money? I took their salaries for myself, actually three times that, because screw that 'saving money' stuff."

Okay, so that's the fantasy version of running a business. In reality, it's often not possible to move unproductive employees into a more productive role, and things can change that can cause a potentially profitable department to become a financial anchor dragging down the rest of the company, and when that happens, you gotta cut people loose. That's just the way it is.

Quoting: Mountain ManOkay, so that's the fantasy version of running a business. In reality, it's often not possible to move unproductive employees into a more productive role, and things can change that can cause a potentially profitable department to become a financial anchor dragging down the rest of the company, and when that happens, you gotta cut people loose.

And award yourself three times their salary for your genius in cutting them loose--gotta do that too, apparently. You keep evading that bit.