Surprise NPM layoffs raise questions about the company culture

Headlines about the recent NPM layoff has raised questions about the company culture and ethics. NPM which stands for Node Package Manager is now being regarded as “Not Politely Managed”. The San Francisco startup, NPM Inc, the company behind the widely used NPM JavaScript package repository, laid off 5 employees in a wrong, unprofessional and unethical manner.

The incident stands imperative of the fact that many of us while accepting those lucrative job offers merely ask companies not to be unethical, and seldom expect them to actually be good.

Indeed, social psychologist, Roy Baumeister convincingly argues there’s an evolutionary reason to focus more on getting people to avoid bad things than to do good things; among other reasons, humans are hardwired to consider potential threats that could harm us. Bob Sutton, author of fantastic and influential books like Good Boss, Bad Boss and The No Asshole Rule, draws on Baumeister’s work to highlight why it’s so critical to stamp out poorly behaving leaders (and employees) in organizations.

Frédéric Harper, a developer advocate who was among those who lost their jobs, posted at length about the situation on Twitter. His concerns, did not come from being laid off. That happens, he said, and will happen again. "It’s the total lack of respect, empathy and professionalism of the process," he said.

In an email to The Register, he said there appeared to be a disconnect between the company's professed values and its behavior.

NPM layoff took its roots under the new leadership

The layoffs actually started last summer when the company hired a new CEO, Bryan Bogensberger, to take the company from about $3m in annual revenue to 10x-20x, explained an early NPM employee who spoke with The Register on condition of anonymity.

Bogensberger was previously the CEO and co-founder of Inktank, a leading provider of scale-out, open source storage systems that was acquired by Red Hat, Inc. for $175 million in 2014. , He has been running NPM since around July or August 2018, a source explained, but wasn't actually announced as CEO until January 2019 because his paperwork wasn't in order.

Bryan brought in his own people, displacing longtime NPM staffers. "As he stacked the management ranks with former colleagues from a previous startup, there were unforced errors," another source explained to the Register.

A culture of suspicion and hostility emerged under the new leadership. At NPM an all-hands meeting was held at which employees were encouraged to ask frank questions about the company's new direction. Those who spoke up were summarily fired last week, the individual said, at the recommendation of an HR consultant.

https://twitter.com/ThatMightBePaul/status/1112843936136159232

People were very surprised by the layoffs at NPM. "There was no sign it was coming. It wasn't skills based because some of them heard they were doing great." said CJ Silverio, ex-CTO at NPM who was laid off last December.

Silverio and Harper both are publicizing the layoff as they had declined to sign the non-disparagement clause in the NPM severance package. The non-disparagement clause prevents disclosure of the company’s wrongdoing publicly. A California law which came into effect in January, SB 1300 prohibits non-disparagement clause in the employment severance package but in general such clauses are legal.

One of the employees fired last Friday was a month away from having stock options vest. The individual could have retained those options by signing a non-disparagement clause, but refused.

https://twitter.com/neverett/status/1110626264841359360

“We can not comment on confidential personnel matters," CEO Bryan Bogensberger mentioned. "However, since November 1, we have approximately doubled in size to 55 people today, and continue to hire aggressively for many positions that will optimize and expand our ability to support and grow the JavaScript ecosystem over the long term.”

Javascript community sees it as a leadership failure

The community is full of outrage on this incident, many of them have regarded this as a 100% leadership failure. Others have commented that they would put NPM under the list of “do not apply” for jobs in this company. This news comes to them as a huge disappointment and there are questions asked about the continuity of the npm registry. Some of them also commented on creating a non profit node packages registry. While others have downgraded their paid package subscription to a free subscription.

Rebecca Turner, core contributor to the project and one of the direct reportees to Harper has voluntarily put down her papers in solidarity with her direct reports who were let go.

https://twitter.com/ReBeccaOrg/status/1113121700281851904

How goodness inspires goodness in organization

Compelling research by David Jones and his colleagues finds that job applicants would prefer to work for companies that show real social responsibility–those that improve their communities, the environment, and the world. Employees are most likely to be galvanized by leaders who are actively perceived to be fair, virtuous, and self-sacrificing. Separate research by Ethical Systems founder, Jonathan Haidt demonstrates that such leaders influence employees to feel a sense of “elevation”—a positive emotion that lifts them up as a result of moral excellence.

Liz Fong, a developer advocate at Honeycomb tweets on the npm layoff that she will never want to be a manager again if she had to go through this kind of process.

https://twitter.com/lizthegrey/status/1112902206381064192

Layoffs becoming more common and frequent in Tech

Last week we also had IBM in news for being sued by former employees for violating laws prohibiting age discrimination in the workplace: the Older Workers Benefit Protection Act (OWBPA) and the Age Discrimination in Employment Act (ADEA).

Another news last week which came as a shocker was Oracle laying off a huge number of employees as a part of its “organizational restructuring”. The reason behind this layoff round was not clear, while some said that this was done to save money, some others said that people working on a legacy product were let go.

While all of these does raise questions about the company culture, it may not be wrong to say that the Internet and social media makes corporate scandals harder than ever to hide. With real social responsibility easier than ever to see and applaud–we hope to see more of “the right things” actually getting done.

Update from the NPM statement after 10 days of the incident

After receiving public and community backlash on such actions, NPM published a statement on Medium on April 11 that, "we let go of 5 people in a company restructuring. The way that we undertook the process, unfortunately, made the terminations more painful than they needed to be, which we deeply regret, and we are sorry. As part of our mission, it’s important that we treat our employees and our community well. We will continue to refine and review our processes internally, utilizing the feedback we receive to be the best company and community we can be."

Does this mean that any company for its selfish motives can remove its employees and later apologize to clean its image?

Update on 14th June, Special report from The Register

The Register published a special report last Friday saying that JavaScript package registry and NPM Inc is planning to fight union-busting complaints brought to America's labor watchdog by fired staffers, rather than settling the claims.

An NLRB filing obtained by The Register alleges several incidents in which those terminated claim executives took action against them in violation of labor laws. On February 27, 2019, the filing states, a senior VP "during a meeting with employees at a work conference in Napa Valley, California, implicitly threatened employees with unspecified reprisals for raising group concerns about their working conditions."

The document also describes a March 25, 2019, video conference call in which it was "impliedly [sic] threatened that [NPM Inc] would terminate employees who engaged in union activities," and a message sent over the company's Keybase messaging system that threatened similar reprisals "for discussing employee layoffs."

The alleged threats followed a letter presented to this VP in mid-February that outlined employee concerns about "management, increased workload, and employee retention."

The Register has heard accounts of negotiations between the tech company and its aggrieved former employees, from individuals apprised of the talks, during which a clearly fuming CEO Bryan Bogensberger called off settlement discussions, a curious gambit – if accurate – given the insubstantial amount of money on the table.

NPM Inc has defended its moves as necessary to establish a sustainable business, but in prioritizing profit – arguably at the expense of people – it has alienated a fair number of developers who now imagine a future that doesn't depend as much on NPM's resources.

The situation has deteriorated to the point that former staffers say the code for the npm command-line interface (CLI) suffers from neglect, with unfixed bugs piling up and pull requests languishing. The Register understands further staff attrition related to the CLI is expected. To know about this story in detail check out the report published by The Register.