This reminds me of a story I heard about Steve Wozniak's time at HP: They were going to lay off 10% of the staff, but instead they decided to reduce everyone's pay by 10% and give them an extra day off every two weeks.
Side note: if staff took better to getting their pay cut, they'd get more frequent (faster) raises. When a company is suddenly more profitable, compensation increases lag far behind, as they have to first feel very secure of the higher profit level. After all, if it falls back to normal, they can't cut salaries...
Note: my personal experience is limited to managing a few dozen people and there are surely plenty of exceptions to the advice above.
What? You can. Many companies even do it every year with some arbitrary bonus system.
I guess the fear seems to be that it will lead to uncontrolled attrition of good people. But I would assume hiring freezes in the industry would still prevent this. Also, you will retain the truly "loyal" employees that are willing to suffer a bit for future growth.
It also addresses the wasteful folks in a fair way. I've definitely observed shifts in company cultures of new hires not being attached to the overall mission, demanding more and more benefits (e.g. business class flights) without "giving back" in equal amounts by working hard.
> I guess the fear seems to be that it will lead to uncontrolled attrition of good people. But I would assume hiring freezes in the industry would still prevent this.
The best are near-immune to that. It's the average worker that will have problems finding next job, not the best one.
> Also, you will retain the truly "loyal" employees that are willing to suffer a bit for future growth.
That doesn't mean productivity
> It also addresses the wasteful folks in a fair way. I've definitely observed shifts in company cultures of new hires not being attached to the overall mission, demanding more and more benefits (e.g. business class flights) without "giving back" in equal amounts by working hard.
It's a job for money, not charity, and you're competing with other companies. New hire have no reason to be attached to the company either. It's fine to like where you work, but people don't live with their work.
They have family and hobbies, that's why they work, to fund that, not to "have a mission", in job where someone on top is earning way more than what they put in effort.
Is it healthy? No. Is it needed? Not always/necessarily. But a company that's laying off members to save costs should likely try to retain those that do go the extra mile.
Also, I mean you can argue all you want that those people aren't productive but in my experience that's just not true. People who live and breathe the company tend to care a whole lot about quality and thinking through user experience. The typical "it's just a job, I can quit any time and find something better" folks just don't stick around long enough to suffer from their decision or care about the company's image / their coworkers.
I mean I've been there. A bunch of folks get hired because they were at Google or Meta before and they must know their stuff, and get elevated to somewhat high positions, but they never deliver on their promise and I cannot say they were particularly productive and they generally also do their "I only work as much as I need" or "Sorry I won't join this one time meeting that needs to happen at odd hours to accommodate time zone issues, it's 30 mins past my end of day" routine. Then after a year or so they leave for greener pastures, probably getting paid more.
Again, I think for a company where it's the norm that people protect their time it might not matter and I'm not saying it's an issue. But if you take a company full of heavily invested employees that see it as their family, and you add, simply because there's a bubble, equal the amount of people who just see it as another job and the company tanks in an economic downturn, retaining more of the latter portion (at all cost) does not seem wise.
The people who don't see the company that way / care are still likely to leave the sinking ship soon, but the damage to the laid off as well as remaining loyal employees has already been done.
And no, if companies were able to accurately identify low performers they could have dealt with them before. I've seen many good folks lose their jobs in the last few months and folks who never released a single thing or provide other tangible output (design docs) be retained.
Your best employees can leave and you are left with the “Dead Sea Effect”
I would have left anyway over the next year. By the time the paycut came, I had already basically purposely “put myself out of job”. I trained other coworkers. Put processes in place and I had nothing left to do but normal CRUD development.
They were pivoting to selling various microservices to large health care providers and he wanted to move away from VMs to Fargate (serverless Docker) and Lambda along with some other projects.
He was a great mentor and he was very straightforward and unapologetically blunt (after we got to know each other).
3 months after I left, they gave everyone additional equity to make up for the paycut and they restored everything a month later.
When they got bought out six months later for 10x, everyone made a decent amount of money from $50K - $200K (we aren’t talking a tech hub), the founders gave everyone bonuses and they reached out to someone who had been there for years and who had left and gave them an extra “thank you” bonus.
I would have stayed, but a recruiter from Amazon Retail reached out to me about an SDE position. I didn’t want to be an SWE at any large company, I didn’t want to relocate, and I wasn’t about to spend months “grinding LeetCode”.
We kept talking and she suggested I apply for a fully remote position at AWS ProServe as a consultant specializing in enterprise app dev + “devOps”.
It was too good of opportunity to pass up.
The rest of the story with the startup. Soon after it got acquired, the CTO left and most of the best employees went with him to a new startup in the same space.
If I were working anywhere else and he could afford me, I would definitely work with him again. I still give him free advice from time to time when he calls and we meet for lunch every now and then.