This is a neat hack by management. It would be great if there was a union that they had to bargain with before doing this kind of thing.
> Severance pay is often granted to employees upon termination of employment. It is usually based on length of employment for which an employee is eligible upon termination. There is no requirement in the Fair Labor Standards Act (FLSA) for severance pay. Severance pay is a matter of agreement between an employer and an employee (or the employee's representative). The Employee Benefits Security Administration (EBSA) may be able to assist an employee who did not receive severance benefits under their employer-sponsored plan. Please contact EBSA if you have any questions.
Letting someone go because of performance doesn't remove the position and it can be filled again.
If the company is realizing that there are people who are just coasting and not doing work and that they're not getting fired previously because it really is a pain and paperwork to fire someone and they want to let those low performers go but not eliminate the position, this is the way to go about it.
Microsoft's old stack rank wasn't a layoff - it was a cold hearted "people who aren't preforming get let go."
Stripe is recognizing that they've got people coasting and not contributing at the expected level. Somewhere an estimate was made that the lowest performing staff based on manager ratings aren't matching the actual performance. If someone is let go for performance (severance or no - that isn't part of the calculation), that position remains and can be filled again. If it was a layoff, then that position would be eliminated after the person was laid off.
So many smart people here who are passionate about labor. Just make that into your company from day 1!
As a business owner I would never do this. But you could do that yourselves without coercing me into them!
The only way for labor to get a square deal is through a union. The fact is obvious because large corporations do everything possible to try and prevent their labor from unionizing.
You may be a good person running a business that respects your employees and if you are, I have no issue with you. But if you’re someone stocking the shelves at Home Depot or working in an Amazon warehouse you aren’t respected by your employer and you aren’t getting a square deal.
Honestly you get more protections if they are part of a recognized union than if their only choice is a wildcat action.
Even more fundamentally though, why should your employees care about your property? If you're worse off but they're better off, they should do it. Your wellbeing doesn't enter into the decision, just as their wellbeing doesn't enter into yours.
Property rights are the foundation of civilization. Please - go start your own commune as so many fantasists have and see how well it goes. I prefer to own my own stuff and keep thieves from taking it.
In fact, in the US (and many other countries), it's illegal to do so.
Nothing stops you from operating a business at full personal liability. As a worker, I would never do this, but you can do it yourselves without coercing me into supporting the existence of liability-shielding legal entities with more power than ordinary humans.
See how you can kinda do that with anything, so it's not very convincing?
That freedom is a two-way street, and it's equally true that nothing stops labour from coming together to bargain collectively. In fact, in the US and many other countries, that freedom is explicitly enshrined in law.