She then immediately recounted the day she and her entire floor were laid off unceremoniously. Luckily, that was about the time that we reached her floor.

Don't think that everyone who worked at AOL were a bunch of "you've got mail!" chatroom admins.

Who in this community would think that??

Wow, I just discovered Wikipedia has no page for Sprynet. Now just who do I contact about getting that edited?

Of all the ones I've spoken with, it followed the pattern of "BigCo outsourced jobs to those darn Foreigners, and I got laid off, and it will happen to you too!". In particular I worked with a former DBA for IBM at a grocery store in highschool, so I used to hear these tirades. What I never heard was any constructive career advice, or any details other than the outsourcing and cheap foreigners. Now the cynic in me says if low wage, and probably lower skilled workers can take your job, you probably suck. Regardless, it has always struck me a bit like talking to that xenophobic uncle at Thanksgiving type scenario. Nothing good to come.

More probably these decisions are made at a very high level and the individual abilities of these workers aren't even taken into consideration. The real lessons here are never trust your employer, loyalty is a two-way street and always have an exit plan.

I don't think the purpose of their tirade was to provide you with career advice. It sounds like they were bitter that they invested time and energy in their career and they were resentful of managers replacing them with an option that seemed cheaper. They probably grew up in a time where you could work for a company for life. I bet IBM seemed like a great place to work when they started.

Can't you empathize with them even if you find yourself making better life choices?

For a lot of people, I think part of the purpose of the conversation is offering a warning (combined with a bit of venting). That they aren't explicitly saying, "And the moral of the story is..." doesn't mean there isn't something that we can't learn from it.

The alternative hypothesis is that you are overqualified. You may not have been overqualified when you took the position but now you are. De-skilling is a very real phenomenon in the workplace.

The xenophobic uncle has seen more than you and may well be the wiser man. Sometimes the country on the other side of the border is the enemy.

What do you mean by that?

Open source has also cut many jobs and devalued salaries, but many don't see it this way. As businesses get more tech savvy (which is happening fairly quickly), they realize that they don't have to pay software engineers to build software any longer. They can take open source, which many engineers and good developers toiled away on for years, and pay what I call a 'software mechanic' considerably less money (and they don't need nearly as much experience) to add features to it. It makes outsourcing very easy and a realistic option.

I predicted this 10 years ago when everyone said free software was the future and Stallman somehow thought that all developers would become government workers (his dream was to have all software "free" and have the government pay developers salaries for the good of everyone).

I just don't understand why people in the tech community try so hard to give all of their leverage away to big companies.

The flip side is that open source fueled the web explosion.

Example: you don't need a multi-million dollar IT team to have a storefront, because you don't have to hand-build a framework. How many people here are making over $100k/yr doing computer stuff for a business that wouldn't have dreamed of hiring someone to do computer stuff twenty years ago?

Without open source, we'd probably just have a small priesthood building WebObjects front-ends to mainframes, and only Fortune 500 companies would be able to afford a web presence.

[citation needed]

Obviously, choosing an open source model limits the opportunities for monetizing software development through licensing fees. I don't see the evidence that it has actually, in fact, "cut many jobs and devalued salaries", however.

> As businesses get more tech savvy (which is happening fairly quickly), they realize that they don't have to pay software engineers to build software any longer.

Non-software business avoided doing that directly even before open source was particularly popular, by paying other people for COTS software licenses, support, professional services, custom development, etc. Having worked in an enterprise firm at the time, while we had large license fees, the hammer to get people to pay them wasn't that "if you don't pay, we'll sue you for copyright infringement for using the software without a valid license", it was "if you don't pay, you lose the support that's bundled as part of your license agreement".

Support, professional services, custom development that's different features desired by the general market, etc., is what most business pay for with software, no matter what the licensing model is. Open source doesn't affect that at all. And the people that can be most effective at selling that, even with open source software, are the people who are actually deeply involved in developing the software. Which is why, even with open source software, the firms that make their revenue selling support to enterprises are still paying core developers on the project -- so, in effect, the end users are still paying for the development of the software, just like they always did. (Of course, open source means that the companies that want to can just get the source and provide their own support -- but many of the big users doing that, it turns out, also and up paying their own employees to work as core developers on the upstream project.)

Or the company is short-sighted, undervalues the skill and experience of onshore jobs and overvalues the $$ they're saving on paper. I bet a buffalo nickel you've never personally seen how offshoring affects a team/department.

It doesn't matter how good you are when your whole department or office is axed. The wheat is thrown out along with the chaff.

if low wage, and probably lower skilled workers can take your job

What actually happened in many cases was executives thought low wage unskilled workers could do your job, and over the course of a few years discovered whoops, no, they really can't. Jobs are then repatriated. Then a few years later some executive gets a bright idea... It seems to be a cycle these days.

My dad was working in $TECH_FIELD for a subsidiary of a multinational megacorp ($BIGCO; you might have heard of them). Said subsidiary had decided to branch out into providing $CERTAIN_KIND_OF_TECH_SERVICES to $OTHER_BIGCOS.

My dad's team was one of the few that got their work done without trying to play "the game" too hard. Almost everyone else in the company would fight them every step of the way, fighting to gain control over a certain aspect of his account (for the power and influence, of course), then never ever doing any work towards it, forcing my dad's team to pick up the slack for everyone else while they took the credit. Say, a team would receive the job of designing $TECH_SOLUTION, but the deadline would loom and my dad's team would never, ever receive the design from the design team for him to implement, so it would end up being all on him and his teammates to design and implement $TECH_SOLUTION.

So it was just under a dozen people with my dad, working their asses off to provide services to this particular account. A friend in middle management let slip once that they were the only profitable account in the entire division, and their customer was the only one happy about the service they were receiving.

After a few years of depressingly poor management and vicious office politics, $BIGCO decided it was time for a change, and brought in a new CTO to turn the ship around. Naturally, said CTO decides that the best course of action would be to lay off almost the entire team working on the only profitable account in the whole fucking division, and replace them with offshore contractors. Only a few months before a critical infrastructural change required by the contract needed to be completed, and just over a year before the contract was to expire. I'm sure you can see where this is going.

My dad was one of the few spared from this show of gratitude, and was promptly tasked with training the offshore workers. Pretty straightforward, right? Employees are just cogs. It doesn't matter if they've spent decades, almost their entire working careers, mastering this field. You can just take any random college graduate and bring them up to speed in a month, right? Better yet, get an offshore one that costs a 10th or a 20th of what a Red Blooded American would demand, and pocket the difference. That's like, free money!

Wrong. Said contractors barely spoke English, and knew less about $TECH_FIELD than I did. As futile as it would be to train a western college grad up to the required proficiency before the deadline, it is downright impossible to do the same with language barrier erected in front of you. My dad and the rest of his team would spend hours on the phone with the outsourced workers, trying to walk them through a process, starting from very basic first principles that anyone with their degree in their field should know, and... silence.

Needless to say, my dad and most of the other remaining members of the team got out of there ASAP. $BIGCO realized their incompetence too late, tucked their tail between their legs and tried to hire back the laid off team members, but unlike most of the stories you had scoffed at, they were all able to get new jobs in the mean time. Service quality plummeted, the customer was appalled when they realized what had happened, and when the time came, decided not to renew their contract. A few months later, $BIGCO decided to get out of $BUSINESS and laid off the rest of the division.

---

Ok, so what can we learn from this? Let's consider a few (not necessarily mutually exclusive) possibilities:

1. (Some) corporations are mind-boggling stupid, with the foresight of a goldfish, and greed that would make Ebeneezer Scrooge blush. They will happily ruin a profitable business to save a few pennies in the short term.

2. (Some) offshore firms from third world countries know this, and build their business around pulling fast ones on these stupid corporate executives. They tell them everything they want to hear about how the workers in $COUNTRY are just as good as the ones in America, but will work for pennies on the dollar, and so much harder! Then, when they seal the deal, they go out and hire a bunch of newly minted college grads with zero experience in said field, and tell them to play the part while they cook up some nice resumes. Yeah, I said it. It's stupid enough to begin with to fire 75% of a business, leave it in the hands of a few college grads, and expect everything to work out. It's downright suicide when you consider the rampant degree and resume fraud that these offshore firms perpetrate, and how brazenly corrupt many universities from the third world are. And the beautiful thing is, the language barrier makes it extremely difficult for management to tell that anything is wrong until it's already too late.

3. Of course not all foreign workers, or even all foreign workers from the third world, are like this. When people talk about incompetent offshore workers taking their jobs, this is the kind of downright fraudulent practice they speak of, not the honest workers that really are just as good as their western counterparts (and will probably end up moving as soon as they can...)

4. Don't be intellectually lazy and lean on the perception of racism or xenophobia. Said stupid corporations will also happily fire older workers with decades of experience for clueless American college grads, and ruin businesses that way. It never occurs to them that you can train young employees while the old guard keeps things running smoothly, because they're seeking the petty short term profit at the long term detriment to the business. Why?

5. Corporations are managed by psychopaths. They ruin their businesses in these ways because the go-getters all want the short term boost in profitability that will promote them up the corporate ladder quickly enough that they won't have to deal with the consequences. Even if it destroys the company, these psychos will have long since bounced to another job beforehand. Said psychopaths wage wage war in the office. An interpretation that I didn't initially consider of my dad's story was that maybe said CTO or one of his new managers was deliberately trying to justify axing the division by destroying the only profitable team. So it's also entirely possible that in many cases of offshoring, the "incompetent" actions of the corporation at large is really just one person trying to snuff out someone else vying for the promotion they want.

---

So, all of this giant wall of text considered, my point is that, well, there are a lot of reasons beyond employee incompetence why a corporation might offshore a worker. It's intellectually lazy and downright rude to imagine some straw factory worker screaming "DEY TOOK ERR JEERRRBS" and shut off your brain every time you hear someone complain about the practice.

As for the question of "what about the guy that got offshored and has been unemployed since," I have more stories (some my own, some from others) I could tell, but since I've already overstayed my welcome, I'll be explicit: Economic downturns suck. Getting laid off or offshored during one could very well leave you unemployed for years, during which no one is willing to hire you. Even when the economy picks back up, it's going to look bad on your resume if you spent years unemployed (or employed in an unrelated field). It's even worse if you're older, and ageism kicks in.

In this scenario, you'd probably need to change careers to survive. As programmers, this doesn't sound so bad to us, because we know (knock on wood) that some kind of programmer will be demand for the foreseeable future, and we should always be able to change a technology "stack" or platform or whatever and find a new job doing very similar things. But not everyone is as fortunate as us. For most people, having to change careers means throwing everything away and learning something new. If you need to do that to keep the lights on, you do it, but it gets harder and harder to do so as you get older. So don't be so hard on people that made the wrong choice and picked a career that disappeared from under them.

I hate this attitude. It reeks of privilege and naivety of the working world outside the speaker's bubble. But I digress.

team got their work done without trying to play "the game" too hard. Almost everyone else in the company would fight them to gain control over a certain aspect of his account then never ever doing any work towards it, forcing my dad's team to pick up the slack for everyone else while they took the credit.

A friend in middle management let slip that they were the only profitable account in the entire division, and their customer was the only one happy A new CTO decides to lay off almost the entire team on the only profitable account in the whole division and replace them with offshore contractors. Remaining members of the team got out of there ASAP.

Said contractors barely spoke English...

$BIGCO tried to hire back the laid off team members, but, they were all able to get new jobs in the mean time. Service quality plummeted, the customer decided not to renew their contract. A few months later, $BIGCO decided to get out of $BUSINESS and laid off the rest of the division.

can i get the sparknotes for your middlebrow hacker news dismissal i got SHIT TO DO SON 💩

I would like to add some constructive criticism: it seems like you are idealizing your dad in this story (his team was really the only one in this really big company making any money), which is a very normal thing to do, but it is not needed to make your point. Also, you are dehumanizing "corporate people" by calling them psychopaths. They are not (usually) psychopaths, they have feelings and empathy, but are just very good at rationalizing those feelings away. I think it is important to recognize that they are no different from you or me, since that might prevent you from doing the same thing in the future.

I'm really glad you made this point, and I'll add that we have to remember that most people can be induced to make callous decisions with the wrong incentive structures and the right pressures from their management. In some environments, behavior we might deem callous is merely institutional for others for pragmatic reasons.

All too often, we forget that when building institutions (commercial, government, etc.), it's critical we don't inadvertently construct systems that give people incentives to do the wrong thing. We have to stop labeling normal people as psychopaths and remind each other we can all act callously under normal circumstances. Not exceptional circumstances, but normal pressures from management and colleagues.

Dan Ariely wrote a good book that tries to explain some of the mechanics: http://danariely.com/tag/the-honest-truth-about-dishonesty/

When they built the pipes, there was no data/content, so they had to create it. But now there is so much more content/data that is so much better, and people just want to use these companies as a dumb pipe to get to the good stuff.

We see it now with cell phone carriers and cable TV companies who built infrastructure to transmit data, and also wanted to sell you content/data for that infrastructure. Hence phones from a decade ago full of bloatware and crappy ringtone stores and crappy Brew-based "app" stores, and cable providers who (still) have poor DVR interfaces and pay-per-view and TV packages.

The iPhone's most powerful innovation wasn't a touchscreen computer in your pocket. It was the business relationship with the cell phone carrier Cingular (and then AT&T). It was wedge that freed the device so people could control it (relatively) more, and allowed people to treat the network as a dumb pipe. Its still early, but Netflix, Youtube, Hulu, etc are largely doing the same thing to cable TV.

This goes back further than AOL. You can see it with AT&T, their refusal to allow 3rd party equipment on the POTS network, the rise of Sprint using their infrastructure, and their ultimate breakup.

Every time this battle has happened the infrastructure companies lose and get pushed into "dumb pipe."

1 - aol was quite expensive to use: it was a long time before they introduced flat rate pricing. When I got it in the mid 90s, you paid something like $20/mo for 15 hours (it's been a long time) and then paid something like $2/hour for every hour after that. I ran up a $60 charge and then had to be much more careful about how much time I spent online. Lesson: because aol was so expensive to use, it incentivized people to use raw internet which had much less content at that time. But some local isp offered $20/mo unlimited use pricing.

2 - they basically missed the transition to broadband

Had they realized they were a content business that had to run access infrastructure out of necessity, I think they could have had a shot at owning the internet. Thankfully they messed that up.

I don't think it was that much, because when AOL first came out with their "$20/month unlimited plan" (years after the regular ISPs did), I remember thinking "this is great for people like me, but I kinda feel bad for people who only use their connection for an hour a week". I think it was more like $7/month for your X free hours (and I remember they kept bumping the X as more and more people began integrating AOL into their daily lives until they finally said "fuck it, we're going unlimited").

Also, people would get around it by using the crapflood of AOL CDs they got everywhere to register new accounts every month. They really started ramping up the free hours on those... when you got to "100 free hours", it made more sense to just make a new account and use a new AOL CD every month.

http://www.forevergeek.com/2007/04/what_did_online_access_co...

They failed to do all of the above, and are now in the dustbin of history (and to me, are solely remembered for their acquisition of nullsoft who then created Gnutella - predecessor of P2P file sharing services).

I'd bet there were plenty of people within AOL who knew they were fucked in the long term, and I'm sure some of those actually tried to change things. But it's extremely hard to do anything that threatens existing revenue streams. Eventually the innovative people leave and you're left with the people who can't see the decline or are ok with trying to squeeze the last few drops of cash from the remains.

And really, in some ways they're only around now because they did manage to change a little. They've collected some decent content brands, which was basically an investment in the open internet.

   As employees, we weren’t proud of our business tactics, and we griped about 
   them frequently. The topic came up at company meetings, round table 
   conversations with executives, and through a lot of water cooler 
   conversation over email, during lunch, and across the foosball table.
   
   One day my manager showed me a horrible graph. It was pretty simple: the 
   graph was steady, then it dropped straight down, then after a short period, 
   the line shot straight back up and stayed level again:
   
   “That’s what happens when we do the right thing”, he said while pointing at 
   the drop, “and that’s how much money we lose. We tried it just to see how 
   bad it was for our bottom line. And this is what the data tells us.”
   
   “Wow,” I said, taken aback. My employer clearly had two options: “do the 
   right thing” or “be profitable”. That was the position they had maneuvered 
   themselves into through a series of bad management decisions.
   
   My manager then said, “More than half the company would have to lose their 
   job in order for us to stop these tactics ... so are you volunteering to be 
   one of them?”

http://www.nasdaq.com/symbol/rnwk/stock-chart?intraday=off&t...

Now they're worth maybe 10% of what they were when that guy left Real Networks.

The thing that kills me here is that they had more than two options. In the short term, sure, they're stuck. But in the long term, they could have either kept sucking or they could have worked to turn it around.

If people quickly found what they wanted, they wouldn't spend any time on your page. Time-spent-on-page is how Yahoo measured engagement, and thus ad-revenue. Improving Yahoo's search engine would have threatened existing revenue streams, and Google would be a terrible investment for them, given the metrics in use at the time.

Competing directly with cable companies in wiring up homes for broadband is a mug's game. This was before it was reasonable to do with fiber and they didn't have anything like Google's freighters full of cash.

So they rode it down. That was probably the right thing to do - their dial up business is still there and still profitable. They have some viable properties on the content side, which is about the best you could have expected without having them get into an entirely new business (like search).

As an investor I'm perfectly capable of taking my dividend and investing in other businesses - I'd rather not have the officers of a company in which I've invested my money taking Hail Mary shots to preserve their jobs.

Reducing expenses to the minimum would basically value all of that at zero, which I think is rarely the right case. Look at the examples in Innovator's Dilemma, for example. The successful companies kept making technology/market transitions, one after the other.

As an investor you are capable of taking the cash and investing elsewhere. But you are also capable of selling the stock if you really think they have no hope of innovating.

None of the big ISP's from the 90's "made it". Earthlink, Netcom, Prodigy... They were all either acquired, went bankrupt, or became DSL resellers. They didn't have any content so they were worthless as broadband took over.

There's only a handful of dot-com's still around from those days. Google, Amazon, eBay, Yahoo... AOL would have ran any of those into the ground had they purchased them, and buying ISP's like XO or Covad wouldn't have worked out well, or buying someone like Sun, Cisco, or SGI would also have been a disaster.

There truly was nothing they could have done.

They bought Time-Warner in 2001 for $164 billion to create AOL Time-Warner. The expected synergies of the acquisition largely failed to materialize, the AOL name was dropped from the combined entity in 2003, and AOL was spun back out of Time-Warner in 2009.

AT&T, Comcast, and Verizon are still chugging along, among others. Some of them aren't household names like Level 3 or CenturyLink.

> There truly was nothing they could have done.

It's 1996, sales are terrible, stock price is in the toilet, the newest product line isn't selling as well, and it was very expensive to develop as it moved to a different CPU architecture. Moreover, the operating system isn't getting better, despite numerous attempts to improve it.

There are numerous newspaper articles saying the company should just fold, and return all the money to the shareholders.

There was nothing they could have done to save the company either.

Except, of course, to bring back Steve Jobs; the company was Apple, and the rest is history.

It's easy to decry the obscene amounts CEOs receive in compensation, but the right one would have been able to right the sinking ship that was AOL. Of course we'll never know if it could have been saved, but it's interesting to think about the position AOL was in, back in the 90's.

The big one was the switch to DSL, which AOL didn't keep pace with. I don't even recall if they did start offering DSL. My internet experience in the 90's was interrupted dial-up and busy signals.

DSL changed all that, but AOL didn't want DSL, so they got left behind. Suddenly, instead of AOL being the cool new thing, it didn't just become staid, it become dysfunctional. Instead of wanting to be on AOL and putting up with busy signals, you kept AOL because you were trapped by the @aol.com email they gave you. The rise of Hotmail took away that last excuse.

I don't know about better search technology, but if AOL had gotten into the online catalog business, Amazon may not even have gotten off the ground. AOL had the brand name recognition, and a warchest to fund something that was clearly going to happen, it was just the small matter of who was going to win. Grocery delivery was unproven, but books? Literally any book in print (and even some out of print) is available in a few days, shipped to your house. Sign me up!

Meanwhile, AOL was content to collect money from their dial-up business.

I actually think buying up ISPs to jump start their entry into the DSL market would have worked out well, or at least slowed the downward spiral. It gets them off the shrinking dial-up as into the nascent high-speed broadband market. The purchase of a backbone internet provider, combined with their purchase of Time Warner in 2000 may have prevented Netflix from getting off the ground, and could have jump started the online video streaming business five years faster.

Finally, buying an equipment manufacture like Sun may not seem like it would have made sense, but with the racks and racks of computers they already owned, a vertically integrated and merged AOL and Sun could started the popularization of cloud services, helped along by their online catalog and online video services.

The benefit of writing this two decades years past AOL's heyday is that hindsight is always 20/20. But saying AOL was doomed, and there was no choice in the matter ignores any possible move they could have done along the way.

Compared to $166 billion, the purchase price of $4.4 billion is not very much at all, but that's still approximately $4.4 billion more money than I have.

AOL may not be the household name it once was, but it did manage to pivot away from the dial-up business, and over to the content business. It's just that the content business, even a $4.4 billion one, is a different market than everyone in America paying you a monthly fee to get on the Internet.

We're in the middle of a similar story with Yahoo, and time will tell if Marissa Mayer is be able to right that ship.

To reinforce your point, Earthlink did jump into the DSL market early and they're still chugging along.

They did. My parents had it in the early 00s. They'd resell the local phone company's DSL but require you to log into the AOL app in order to actually use your connection.

I wonder why!

Instead of being about branding or a political decision to require the user to see an AOL logo, there may have been some technical reason for it. Especially given limitations in Windows 95/98.

They just didn't do all of the above better than the competition.

A major factor that killed AOL was the shift to broadband in the late 90s. AOL had a huge infrastructure and competitive advantage in providing dial-up access to consumers. As the Internet grew, though, consumers got hungrier for bandwidth, they got hungrier for content, and the relative share of both of these resources that was not owned by AOL increased. It was easy to justify subscribing to AOL when they were $10/month for 56.6K access, your local ISP was $10/month for 56.6K access, but AOL gave you all this extra content. It was a lot harder when you could pay $30/month for 500K/sec ADSL or Cable access that unlocked a whole world of multimedia content. AOL owned none of the infrastructure that made the broadband net possible.

GFiber, Loon, and cell phones risk doing the same thing to Comcast, TWC, and Verizon FIOS now.

[1] http://en.wikipedia.org/wiki/AOL#1990s:_a_new_Internet_age

None of the big ISP's from the 90's "made it". Earthlink, Netcom, Prodigy... They were all either acquired, went bankrupt, or became DSL resellers. They didn't have any content so they were worthless as broadband took over.

There's only a handful of dot-com's still around from those days. Google, Amazon, eBay, Yahoo... AOL would have ran any of those into the ground had they purchased them, and buying ISP's like XO or Covad wouldn't have worked out well, or buying someone like Sun, Cisco, or SGI would also have been a disaster.