Hacker News Reader

Comment by simonbarker87 | Hacker News Reader

The way US companies do these kinds of layoffs staggering. In the UK redundancies are announced, the areas of the business to be impacted are informed, there is a review period of a few days to a few weeks, you are then told you are being made redundant or not, you then have a chance to propose an alternative role if you wish and if you’re still being let go you will be told a date and a process put in place for exiting. At a large company this process can take a couple of months and the steps are made very clear and transparent.

View on HN

This just means a lot of these people wouldn’t have a job to begin with.

Not saying one is better than the other, but if it took months to fire people, lots of US tech companies wouldn’t have grown 30% without thinking twice. Leaving many of then people let go today without an entry ticket to tech to begin with

I know many startup founders in the states who use "Hire Fast, Fire Fast" (vs "Hire Slow, Fire Fast")

If you have more money than time, that could even be optimal for the company.

Just to be pedantic, in the US there may be little difference between being laid off and being fired, but in the UK there's quite a difference. We're talking about layoffs/redundancies, and yes it's hard specifically to discourage these poor labour practices.

However in the UK firing someone is much easier than this. There are protections, and in some jobs (like the civil service) it can be difficult to fire, but that's not universally true.

In the US there is still a big difference between being fired and being furloughed [1].

[1]: https://en.wikipedia.org/wiki/Furlough#Private_sector

In the US there is a big difference between fired and laid off. Fired means for cause, and when asked the company will say "bad employee, you shouldn't hire them" fired also means you don't get unemployment as it is your fault you don't work there anymore (this varies from state to state). Laid off means you were an acceptable employee (or better), but the company just doesn't need someone to do your job anymore, when asked they will report you left in good standing, and since it isn't your fault that you don't have a job you get unemployment while looking for a new job.

Fired is so negatives that companies will rarely fire anyone. They prefer to ask you to quit - you still don't get unemployment pay (varies from state to state, but it is your fault you are not working). If this happens it is in your best interest - while it is now your fault you quit (and you cannot sue them for it - which is why they do it and a downside to keep in mind!) they will then report that you worked there in good standing until you left. In practice most companies only fire someone when they discover actions that would go to the police.

That same argument could be made about lots of worker protections, from safety controls to minimum wage standards.

Greater worker protections leading to greater stability rather than a boom and bust over-hiring and mass lay-offs sounds like a feature, not a bug, to me.

That kind of "stability" is more accurately described as stagnation. It may protect workers in a narrow sense, but it also disincentivizes the kind of productive risk-taking that leads to business creation, innovation and overall societal increases in wealth. This type of worker protection scheme is what people tend to reach for because it's the first thing they think of and it sounds sensible, but it can really drag on society in the long-term.

A much more effective approach would be to make loss of employment not be a big deal, e.g. through stronger social safety nets. That way you ensure people's lives are financially stable but without introducing friction to efficient allocation of resources. Ideally, losing your job would be no more than a mild inconvenience - like having to buy a different brand of milk because your usual is out of stock. That ideal isn't realistically achievable, but we can at least try to get closer.

>, lots of US tech companies wouldn’t have grown 30% without thinking twice

So what? Apparently that didn't work in any way, since their stocks are crashing and they need to mass fire. So what's the benefit of what you are saying at all?

And why would 30% growth be some goal just because its a high number, compared to a stable job market?

> lots of US tech companies wouldn’t have grown 30% without thinking twice.

Sounds like trickle-down risk to me, to just randomly hire and fire.

Let’s not forget to mention the very common practice here of taking away projects, making your job worse, reassigning you to a manager you hate etc to make you quit.

UK HR teams aren’t staffed with angels and in my experience are great at feigning ignorance of the law

And the government did not condemn fire and rehire by BA etc a couple of years ago

This is not universally true in the UK. My employer laid off about 10% during the current downturn, and those impacted found out quietly, while everybody else was left to wonder why people were suddenly no longer in the employee directory.

How large is the company? The UK has pretty strict rules but it only applies above a certain size: https://www.acas.org.uk/your-rights-during-redundancy .

e.g.

> If there are 20 or more employees affected by redundancies, your employer must hold collective consultation.

Of course, it relies on affect people knowing their rights and being willing to stand up for them, which isn't always easy, especially if you're not being let go.

There is a requirement to have a "group consultation" in the UK if 20 or more people are being made redundant which often means the process is relatively well telegraphed. But the "group" which must be consulted with is only people who are at risk so it can still happen relatively quietly if redundancies are limited to a certain team/etc.

In addition, there's no requirement for you to assign them work or require them to be in the office in this period. You can send someone on garden leave while working through the process, you just still have to pay them.

And in the USA, unemployment is really low, and is usually lower than other countries in most economic climates. Investors are more prone to invest in new or expanding companies when the leadership is able to protect their assets faster by shedding costs in the event of a downturn. Wish we had a better healthcare safety net for people, but overall, I think our system is better.

FWIW, in the UK unemployment is also very low at the moment.

Better for who? For sure not workers

After a few cycles on Wall St tech, what I cynically observe is this:

Individual firing takes months, and up to a year, with management papering the decision and only doing so during certain times of the year around the review and compensation cycle. Sort of like the FAANG PIP process. The person being fired still ends up getting severance, etc, they almost never bother with for-cause due to legal burdens. Quite often no one really gets fired but they play chicken with you by giving zero raises and cutting your bonus until you quit.

Mass layoff firing is usually announced and followed through on in weeks. Usually they go after low hanging fruit, but often that might just be out of favor teams/departments/divisions more than just poor individual performers.

It really puts weird incentives in place for people who might want to skate. If you do a bad job - you have many warning signs before you are fired, if ever. And then everyone has an equal risk of random layoff.

People don’t all have an equal risk of a random layoff. There’s some baseline, non-zero, random risk for everyone, upon which is added/subtracted a factor which is individual in nature.

On a team of 15 laying off 2, do you really think that the highest performing employee has an equal risk as the newest joiner or the lowest performing employee?

No, but in some ways its really worse than that. The pattern I tend to see is the most expensive for their title level gets laid off, that is to say, the oldest.

So the incentive is to relentlessly chase promotions, but not so much that you reach a level you are incompetent. But also not too slow, such that you are at the top of the compensation band for your title. Also don't plan to work in this industry til your late 50s.

Ideally the "most expensive for their title level" would be the most valuable for their title level, rather than the oldest. To the extent that there's a mismatch and salaries at some company are set by age instead of value, it shouldn't be surprising if layoffs tend to hit those on the wrong side of cost-vs-value.

The idea that, all else equal, someone should be paid more to be a 50 year-old Senior Foo than a 40 year-old Senior Foo is just wrong and, when/if implemented, could easily be the source of this apparent ageism during layoffs.

In a title-band compensation controlled org, oldest in band being highest paid is extremely common outcome, think about it. Once you hit the terminal IC level, a developer may be in that title band for a decade or more.

At a typical bank it's like..

Analyst->Associate->AVP->VP. However from VP on up, the pyramid narrows sharply. The ratio of Analyst:Associate may be close to 1:1. The ratio of Associate:AVP may be 1.5:1 The ratio of AVP:VP also around 1.5:1 or 2:1. However from there the ratio of VP->ED and ED->MD are like 5:1 or worse.

ED&MD are far more executive management type roles. Zero coding, you may run an org of 100 people.

So the earliest you hit VP might be like 28ish. But you'll find VPs that are 45 to 50 easily.

It's an up or out level. Slowly accumulating raises as you age without seeking a management role means out eventually.

Sorry. I'm not arguing it doesn't happen. (I agree that it's an extremely common outcome.)

I'm arguing that it shouldn't happen and, if it does, that would explain that layoffs disproportionately hitting those whose return-on-cost is lowest means disproportionately hitting those whose candles-on-cake is highest.

> Slowly accumulating raises as you age without seeking a management role means out eventually.

At whatever the career level is for your org, some people should probably stop getting merit raises entirely. If their merit isn't increasing, there's no reason their pay should be either. They could drift up as the entire market wage drifts up, but if a 10-years-at-VP is just as valuable as a 20-years-at-VP, they should be paid the same. (I'd much rather start having that conversation when they're 11-at-VP and get no merit raise and it's still a good time economically than 9 years later when they're surprised to be shown the door with zero warning after a string of merit-free merit increases and a stack of "meets expectations" performance reviews.)

I know this is an aberration during particular boom times, but there’s been a couple of times in my career (circa 2012 and 2020) where new hires were routinely being paid more than more tenured employees at the same level. It’s because large companies try to align comp to some local market benchmark, for example the 75th percentile, but that only ever applies to _new_ offers. I’m yet to experience a company that when faced with data that says there’s been huge growth in compensation year on year go through and give everyone big pay rises.

It depends on how big a company is and how their HR works. I worked at big dumb banks that gave outsize raises the year after promotion to "adjust for market rates" but then in high performance years gave negligible raises because we were all just numbers on a spreadsheet.

The incentives this create as well are perverse because performance becomes less a driver of a big raise in the short term.

In the long term of course, the performance probably drives the promotion which is the thing that gets you into the higher band in which you can be awarded random unearned raises.

However in the long term its easier to just jump ship for a guaranteed 20%+ bump than to pray for a random 10% every N years.

> I’m yet to experience a company that when faced with data that says there’s been huge growth in compensation year on year go through and give everyone big pay rises.

I have actually had a former employer do this once. I think it worked out best for those with 2-3 years of experience, some of whom got 20-25% pay rises, while those with 0 years of experience were closer to hire date and hence what the company considered market rate, while those with more experience were better at negotiating raises on an ongoing basis.

The way US companies do these kinds of layoffs betrays the undeniable immaturity of the United State's "leadership class". All rah rah rah until it's anything negative, and then they are scared little boys and girls, hiding the truth.

What makes you think all US companies are like this? A lot of non tech roles were made redundant at my last job, affected people had a 90 day notice and if they stayed the 90 days a hefty severance based on years worked.

My current company does it similar to what you said and gives you time to find a new role or relocate.

The first company I worked for called people into a room and RIFed them out of nowhere. People still got hefty severances.

It’s not a one size fits all approach, start up’s are usually less caring and ruthless with layoffs.

Only because it's legally necessary. If it wasn't, companies would be nowhere near so well behaved.

Not complaining of course, this form of better behaviour is hugely preferable! But I think it's fear/loss-aversion, not kindness, driving it!

Yeh never said they did it out of kindness, just that the system is very different here in the UK and (imo) clearly better.

No offense, but I would rather not trade the US economy for the UK economy right now.

Maybe get your own house in order before giving friendly advice.

Not commenting on the relative state of the economies, just commenting on how surprising and alien the redundancy process is in the US.

Also, can’t see where I gave any advice in my original post.

Switzerland has also liberal labour laws and people can usually get fired with either 1 month or 3 months notice. This kind of flexibility in the labour market is clearly an advantage because the US and CH have some of the highest salaries and lowest unemployment in the world.

Can you show causation here?

That may be permissive in international terms, but it’s a huge protection for workers compared to the US. You are not guaranteed any days warning in the US.

> This kind of flexibility in the labour market is clearly an advantage because the US and CH have some of the highest salaries and lowest unemployment in the world.

It really is quite a big stretch to assume that this is a causal mechanism. You only need to look to Scandinavia to find a counter-example.

I think it is more reasonable to argue that high salaries in US are fuelled by borderline slave wages for menial labour. And Switzerland's wealth comes in a historical context that is completely different from the US - it's almost impossible to blanket compare them side-by-side. The difference in population size is another huge issue with such a comparison.

I think it's a bit of a stretch to compare the 2 I don't think the US has any period of notice Switzerland has many benefits US definitely don't get, like holidays Strong unions in Switzerland fight to keep wages up

Most of the Eastern European countries as well and their economies are growing great compared to old Europe.

As an Eastern European - that's actually not true.

Any form of this comes from abusing the temporary work and contractor system(not exclusive to Eastern Europe, but here it's common).

But still - even as a pretend temp worker you normally don't get fired on the spot without notice because with the current demographic situation employers can't afford to do this and will usually include some form of notice in the contract to protect their interests.

Also illegal employment, especially in construction, is still very much a thing around here and I would think that, if anything, is a greater factor.

Easier to get ahead when you're cheating.

> This kind of flexibility in the labour market is clearly an advantage because the US and CH have some of the highest salaries and lowest unemployment in the world.

Post hoc ergo propter hoc. There are plenty of other reasons that the US and Switzerland have become wealthy, you can't simply assume that liberal labour laws are a factor.

Swiss labour laws are a bit more involved than that. You can fire with 3 months' notice, yes, but not if the employee has recently been unwell or had an accident, and not for any number of legally protected reasons (including the employee being absent for mandatory military service, employees exercising their legal rights such as freedom of speech in ways not directly related to the workplace, or as a result of a dispute between employer or employee if there was no misconduct). Full list (in German): https://www.seco.admin.ch/seco/de/home/Arbeit/Personenfreizu...

So effectively, the burden of proof is on the employer to show that the reason for firing is a legal one, but that does include "orders drying up so we need to cut back on staff who would otherwise be idling".

Courts can and do award fired employees up to 6 months' salary as compensation if employers overstep the lines here. And because Switzerland has a well-working legal system, that means most employers don't abuse their firing powers, and making a facebook post on $CULTURE_WAR_TOPIC from a non-work account is unlikely to get you fired unless your role is "brand ambassador" or executive officer, for example.

Also, if you are fired in Switzerland and you're a citizen, you have very generous (by international standards) state redundancy/unemployment benefits.

I agree with the parent poster that the flexible labour laws are part of what makes Switzerland attractive for business, but I would much, much rather end up being fired under the Swiss system than the U.S. one.

France, a country famous for workers protections, also allows for:

* rupture conventionnelle, by mutual agreement, which requires at least 1/4 month salary per year on the job for less than 10 years, 1/3 month for more than 10

* licenciement économique, which has a mandatory procedure, and requires 1-2 months notice of the employee, with a compensation same as the above

Since the procedure for the second one is a bit involved and requires approval from the mini-union embedded in all companies over 50 employees and a government agency (since it's only intended when there's economic troubles), often employers would prefer to pay extra compensation in a rupture conventionnelle instead of wasting time with the procedure.

Honestly doesn't sound much more complicated than Switzerland, yet nobody would say this allows France to have low unemployment.

And the UK and the rest of Europe have a weak tech sector.

Reply on news.ycombinator.com