This doesn't seem like a good strategy for tech. Cutting everyone's salary will dislodge your top performers who can get a better position even in poor market conditions.
Will it? Are your top performers only there because of the pay? And how do you even determine who your top performers are? I see this sort of logic frequently and I don't even know how to measure it, much less believe it.
In an ideal work environment, probably less so than other employees. But I think anyone who has their salary reduced is going to reevaluate their position, and those with more valuable skills are more likely to leave. The question is, what is more likely to cause a serious reevaluation, salary reductions or layoffs?
I think for most tech companies, a single round of layoffs is preferable, as the people who you want to remain are more likely to feel they aren't and won't be affected and not reevaluate their position. The reductions approach could work for smaller or startup companies with a flatter structure, where employees are more invested in the company's goals and successes, either through culture or shares.
Either way you'll probably be thinking about interviewing, with a bit less urgency if you get to keep your job.
And if they stay, their morale and motivation may drop 10-20%
And people who quit don’t get severance, so it’s a win-win for the company. Or at least, they seem to think it is.
This is such a weird attitude to me. If it goes up you expect the gains, if it goes down the company is letting you down.
Stock is supposed to involve some risk. It's not cash, and you will only be disappointed if you build your lifestyle around it being a certain price.
BigTech specifically has lured people with the promise of stock appreciation on top of already great base. When stock prices collapsed last year many companies offered “top ups”. The implicit agreement was that stocks only had upside.
Some solutions to this include furlough rather that straight cuts. Those do reduce some infrastructure costs. I can’t reduce service staff and contract work at all if everyone is working 40 hours a week still. We use the same toilet paper, water, electricity, other consumables and depreciating equipment. A saw blade cuts X feet of metal. But I can trim if everyone is working 37 hours.
In case of Google they already "overpaid" by more than that percentage wise. Sundar can just say take your unhappiness and shove it up the place. What you gonna do? Quit when every other FAANG is laying off in hope to find something better? I do not think Sundar would give a flying fuck about this kind of unhappiness.
So top performers will get moving quickly.
Granted, there are a set of people who are very good at job-hopping while executing a performance of being a top performer. But maybe a company will do just fine those people hop away. Maybe it would do better.
The handwringing and psuedo-calculus of cuts does further damage to any interesting work.
Can't do interesting work when instead you have to fill in for a job previously covered by a junior engineer.
It'd take a hell of a company culture to fight these trends.
And obviously, not laying off people has a much smaller impact on staffing and the work one is doing, so I'd like that part better as well.
You need the sort of work I do when you’re trying to get more done with less. Do I prefer using these skills to prevent over hiring in the first place? Of course I do. I’ll even take it for winding down a cash cow so we can start new product lines.
The “goodness” of most people who conflate new with better is a matter of prospects. This kid is going to be amazing someday. In a downturn you need amazing now, not some day.
But above the curve, everything else matters a lot, especially having a good boss / project leader and a project that makes sense / is actually used by people.
Advice to reduce the wages of all individuals is disconnected from reality and likely originates from someone who is insulated from the practical implications of such a decision, such as those in an academic setting.