Wait. Why is Reddit losing so much money?

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The most accurate explanation is probably don't want to.

EmpathicVagrant

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The golden age was when they had r/PAN and therapy gecko and that guy that stacks blocks, and everyone with half a musical instrument was on to watch.

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They would be in profit if they paid Spez and co normal amounts of money instead of nearly 200 million per year on Spez alone.

Basically Reddit is a scam in terms of investment.

Dhs92

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Isn't his salary only 300k per year with 200mil being an estimate of what he'd make from the IPO

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@Dhs92 nope. His salary used to be 300k but last year he got paid $192 million, including stock etc.

Kecessa

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The stock options wouldn't have an impact on their current revenue though, would it?

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It would have an impact on their current profit or loss, yes. Stock options are an expense in accounting.

Even without the options though, look at the actual stock they handed out:

Huffman’s compensation package for 2023 was worth $193.2 million, which included salary of $341,346, stock awards worth $98.3 million and stock options valued at $93.8 million. Wong’s total comp of $92.5 million included a base salary of $583,820, stock awards of $45.7 million and stock options worth $45.7 million.

Kecessa

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Yeah, sorry, I always mix up revenue and profit

Chainweasel

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Nope, that was last year's income.

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Basically Reddit is a scam in terms of investment.

By the way, I think r/WallStreetBets users should set up an alternate community elsewhere (like here); I wouldn't put it past management to shut that sub down if users mention anything about torpedoing the IPO.

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WallStreetBets users should really set up an alternate community elsewhere (like here)

Here as in the fediverse, maybe, I don't think lemmy.ml mods would be too welcoming, seeing as how they are marxist leninists. XD

Seriously though I'm sure WSB guys have a ton of offsite back channels. Aside from short squeezes that sub seems to be running pump and dump schemes.

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They're spending over 400mio a year on RnD. I was downvoted for stating this somewhere else, but tech workers are drastically overpaid and tech companies are structurally incapable of allocating resources properly.

I'm 100% sure, that reddit has a bunch of technologies, frameworks, components, that were developed inhouse for no other reason than a bunch of engineers trying to reinvent the wheel for the 100th time.

LibertyLizard

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Why do you think tech workers are overpaid? I think other workers are underpaid.

Vendetta9076

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They think that cause they aren't a tech worker. Also, as a non American tech worker were also underpaid.

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I'm a senior software developer. I know how the industry works. And I also know the incredible arrogance of IT people thinking they're only millimeters away from being literally gods.

zloubida

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Username checks out.

Vendetta9076

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Sure but thats the same in every technical industry. Doesn't have anything to do with pay.

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No, it's not. Other industries have standards. Nobody would try to re-invent bolts for no reason. Software engineers do. All the time.

And it is related to pay. Or better, willingness to pay. VC funded firms are willing to spend a lot of money on hiring "top talent", but they let them run relatively free. So instead of using a not 100% fitting solution off the shelf, they build a custom solution, that costs obscene work hours and fits a tiny bit better for 3 weeks. That means, a lot of the work of these very capable engineers gets wasted in the sense that it doesn't create business value. So the business value they do create gets more expensive to produce.

Vendetta9076

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You seem to have a hatred for the tech industry and a very warped view of it vs the work force.

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Again, I'm part of it.

Baines

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lol that bolt comment is factually wrong

sincle354

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From a software engineering view: Lots of rebuilding the wheel, now with Internet Explorer dependencies. Large tech firms are more and more bureaucratic rather than innovative. Startups slurp up VC funding for the next 200 or so unicorn investments. NVIDIA is THE ENTIRE S&P 500 at this rate with SERIOUS "Peak of Inflated Expectations" valuation. Elon Musk.

All the while the majority of the job is fixing the mistakes of the past, of yourself and of some code monkey in 2003. There's this theory that code replicates the structure of the design team. When that team spans an entire corporate hierarchy with SCRUM standups every 2.5 milliseconds, you wonder if you could do the equivalent of the ending of Office Space to the codebase.

I'm sorry, I'm just... anyway, a sage piece of advice. For the love of all that is holy, write requirements BEFORE doing validation for Aerospace applications, and DO NOT OUTSOURCE THE REQUIREMENTS WRITING. That is all.

boyi

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During the initial and development stages, the top tech workers were headhunted and paid a lot to set up good infrastructure. Now that the infrastructure is already there, when there's not much new development being done, they ended up being considered overpaid with respect to the works being done. These companies will end up getting rid of this 'overpaid' workers and replace them with migrant workers that they can get for a lot less.

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Do you really think an engineer at Reddit or anywhere in the Valley generates as much value to society as a doctor?

I'm not even close to FAANG, and I earn twice as much as a nurse and slightly more than a doctor of my age. That's great for me, but I'm not worth that much. And tech workers in the USA earn even more relative to regular workers.

zurohki

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People aren't paid for contributing to society, they're paid to generate wealth for rich assholes. Doctors don't earn billionaires as many yachts.

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And you just showed your incapability to distinguish between descriptive and normative.

queermunist

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The purpose of a system is what it does.

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"Purpose" is the wrong category here.

queermunist

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I meant what I said.

exocrinous

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Programmers aren't overpaid. Doctors are underpaid.

Jagermo

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And 193 mio for the CEO, that's a lot of dickpill ads they need to sell...

Perhyte

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And, interestingly, they lost $91 million last year. If the CEO had instead earned $100 million last year, the company have made a multi-million dollar profit (if only just). If it had been $10 million (still way overpaid for any single person, I'd argue), they'd be nearing the hundreds-of-millions-per-year profit scale.

I'll never understand companies paying their CEOs hundreds of millions while they're losing money hand over fist...

Serinus

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Not quite. He's paid mostly in stock, not cash.

Still an absurd amount of cash for a single person in a single year. You can effectively own most people for $4,000,000 (40 years at $100k a year.)

This guy is making half a million every single day. Imagine buying someone else's life's work every week.

Or, optionally, he could buy a nice house every single day.

Ultimately, cash is a measure of what society owes you.

One person simply can not produce the amount of effort that should be required to earn that amount of debt from society.

athos77

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He's literally trying to build up and stock his doomsday bunker.

charonn0

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That's enough money to fund a rogue nuclear weapons program. So, I hereby start the rumor that reddit is developing weapons of mass destruction.

dhork

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It's always been a weapon of mass distraction, though, and Redditors are poor spellers.

athos77

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I think what they stated was that they spent $400 on R&D in 2023 - you know, the year where, after 20 years of twiddling their thumbs and doing shit-all, depending on volunteers to run the site, and RES and 3rd party apps to make it usable, and imgur to provide hosting, etc etc - the year when they finally had to actually do some real coding.

I'm wondering how much of 2023's R&D was spurred by restricting the API code, and then allowing certain applications access; having to finally take seriously their decade-old promise to develop mod tools with no planning or preparation; their total surprise at having to provide access to disabled people; and having to update their app. Those are all areas where they were extremely happy to let languish, and which they suddenly had to provide expedited support for after the protests.

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400 million? For slightly dusting off an app and somewhat improving some aspects of their site?

Think about, what that means. If we assume a very generous 400k per engineer, that would result in 1000 people working full-time for a year. Just in RnD. And for what exactly?

exocrinous

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Actually, 400 million is exactly as much as it takes to pay 10 engineers 100k to write code, and 399 managers 1 million each to do scrum meetings

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I was downvoted for stating this somewhere else

You're not alone; I got two downvotes within a few minutes of posting this -- a very Reddit-like phenomenon.

sudneo

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Hey, until those are money that go from VC leeches to actual workers, I call it a win.

RegalPotoo

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If you are a tech company everything you do is R&D and therefore subject to tax breaks.

nayminlwin

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There is a video somewhere explaining why tech companies need such wasteful bunch of tech workers to give out this image of rapid growth.

Treczoks

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The key question is: What kind of R&D? I'm afraid their key research is "how to squeeze more money out of our users".

_haha_oh_wow_

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Tech worker here: Am underpaid, you are full of shit on that part.

Edit: Looking at your subsequent posts, it seems you are just completely full of shit or quite possibly trolling. Just to be safe: Welcome to my block list! :D

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Yeah, why would you engage with someone who suggests that 200k per year might not be a fair wage?

skillissuer

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spicy take for lemmy, where working in IT seems to be a prerequisite for having an account and engineers disease is endemic

bigfoot

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I have a feeling Reddit users are much less likely to click an ad than a Facebook, Twitter or Google user.

I believe that is why they have been dumbing down the site and encouraging low effort stuff like memes and tiktok reposts.

Lulzagna

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They have 2000 employees and that don't do anything

_haha_oh_wow_

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Including one that just got paid 193 million, holy shit!

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Most of that includes options that he would have to wait to cash out, which is probably what inspired him to blow things up over the summer.

altima_neo

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Because it has no means of generating an income is why

p03locke

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Used to be Reddit Gold, but it's funny how losing a bunch of goodwill impacts a source of income based on social popularity.

DogPeePoo

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Not funny, “ha ha”; but funny, “fuck you Reddit”

Rentlar

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Reddit's spending on this spez guy is making them lose money. If they can cut back on that small expense, good chance they'd be more profitable.

Anticorp

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I just read yesterday that Spez was paid $193M last year. Idk if that's accurate (it seems very high), but if it is, y'all might start looking there for the missing money

melmi

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The $193 million figure is misleading because the majority of it is stock, so that number isn't cash and is just an estimate of value since there isn't even an open market for the stock. The IPO will show how much it's really worth I guess.

He was paid a little over a mil in actual salary + bonus, which is still too much but not nearly as ridiculous.

Anticorp

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That's an enormous stock package. Stock carries real value, and when the stock IPOs he could have considerably more value than the current estimate. Even huge companies with billions in profits don't generally give their CEO such a large compensation package for a single year. The decision to award that to him certainly raises questions about management's competence. Well, it raises additional questions, since I don't think anyone doesn't already have questions about their competence.