I can’t imagine three layoffs in a year is great for morale.
Is there a reason they chose this sort of trickling layoffs approach?
Is there a reason they chose this sort of trickling layoffs approach?
As a founder, the act of paralizying the company to effectively "bleed the fat off the bone" while cost effective, is insane. Because nothing gets done during those low morale months. I refused to believe this could be a valid strategy.
Then I was countered with: this org is already not shipping features or anything customers want anyway, so its not like it has any productivity to lose. Then proceeded to name Twitter as exhibit A of the argument.
I could not retort to that.
They'd need to have a bulletproof insider threat program, one they're not laying anyone off from to mitigate the risk of their own team becoming a threat.
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Tldr: once you've had two layoffs back to back, the risk isn't low morale, it's animosity.
Folks resigned to whatever / want to be laid off stay.
Heck I was the latter once, stayed for a while waiting for my payout.
It's a major pet peeve of mine when people's conspiracy theories don't even make sense even if you accept the theory at face value:
1. If you want to fire people for performance or other reasons, it's true that a great time to do it is during layoffs - there doesn't need to be any rationale given, and there is nothing to sue over when a hundred other people are also being let go for non-performance reasons. So if you're already having layoffs, why again are you hoping for some people to resign??
2. Why on Earth does your friend think having multiple rounds of layoffs will convince poor performers to resign? That doesn't make any sense. If anything, it's usually the crappiest people who are OK stocking around when a company becomes paralyzed during layoffs season - it's top performers who see the writing on the wall and go elsewhere.
for the sake of playing devil's advocate, i'd like to remind that poor performers may not see that same image when they look in the mirror.
it's likely that they too will experience the same dread and despair as anyone else might when they are confronted by the very real future prospect of unemployment.
Don't assume that.
Not everyone can just hop into a new job. Some top performers, who are deep into their career, need to invest a lot of time in their job searches.
If finding a new job takes someone 160+ hours, it's impractical to do that while doing honest work for their employer. People have families and other things to do outside of work.
That's why negotiating a severance package is a thing.
1 - because even during a mass layoff, theres always a threat of a lawsuit. Sure, it may not go anywhere, but as already mentioned, defending is costly. An employee that decides to leave on their own volition is no risk. Plus, laying off people has in some states some remuneration and compliance requisites. Unemployment hearings that tie up senior staff and can be a time drain. Then theres fringe benefits. And of course, there's morale, reputation, and other intangible costs like IP loss and making an unwanted enemy or even encouraging a scrappy conpetitor. Its infinitely cheaper and desirable to get someone to leave vs termination.
2 - Please see serf's post. In addition - High performers can also be those that actively prevent product from actually shipping, ensnaring the org in turf wars, and similar (typical) large org roadblocks.
To be clear, my worldview was that this premise was insane. I still think it is strange -based own personal experience- but im far less certain of its invalidity, and I am forced to acknowledge that the CEO has better information than I have. Perhaps I need to reconsider my position.
That is, the conspiracy theory presupposes that the company is already going to have lots of layoffs. So you're saying it's arguing that companies want to avoid the negative consequences of layoffs - by having a lot of layoffs???
The whole idea is nonsense.
If the layoff announcement is t0, and every layoff round is t1, t2 ...t(n), the company is banking on:
-employees do not know n
-employees only have standing to sue (AND benefits) at T(n+1)
-employee anxiety level will not tolerate waiting to T(n)
- notice that even if n = 1, it still has the same effect as n=5 since (n) is unknown to employee.
Therefore, Opco announces layoffs, but to lower the t0 cost of terminations, it moves terminations to (n). Note t0 is most expensive scenario for the employer. This is the hard thing to accept because its counterintuitive, and does not generalize (I.e. cutting the cord now,and moving on).
Besides, it still doesn't make any sense. Having been at a company previously that had many layoffs over a series of years, a very common opinion was that it would be crazy to quit, and get no severance. Better to just hope you'd get laid off with a fat severance package, especially since most of the packages at the big tech companies over the past year and a half have been extremely generous.
That really depends on the jurisdiction, in Australia and mich of Europe you can't replace someone laid off for a certain amount of time.
I'd like to amend that - it's not the lowest performers who stick around and the top performers who leave.
It's more, the poor-at-interviewing people who stick around and the good-at-interviewing people who leave.
I've worked with a shmuck who took two years to deliver a basic CRUD system that fell over at 10 req/sec [1], and then got hired at a another place as an architect (or team lead - I forget which).
[1] I did a similar one in about 3 months, and it handled more than 4 req/sec, without weird crashes.
Meanwhile the talent that can't get a job elsewhere easily will be hanging on for a payout.
You basically alienate your teams, throw timelines off anyway and frankly it's a dick move.
I think if this is the case, it's because it's mismanaged to the point that no one knows who should go, so you put the feelers out as opposed to restructure solidly going forward.
It does hurt to let people go, and I understand why people don't want to put themselves in that position. But to some extent, that's why you get paid the big bucks. If it was all sunshine and rainbows, you'd just do it for free! (I finally canceled my cable last week after 5 months of procrastinating. So don't put me in charge of your Fortune 500. But there's someone that can get the job done, probably. ;)
I am also unsure that laying people off during a high interest rate period makes a lot of sense. The article smugly points out that "other bets" made 200 million while losing 800 million. If you only care that every venture makes money, then you probably won't ever hit the next big thing. Look at ChatGPT vs. Bard, for example, and remind me which company pioneered consumer AI products. Stop investing, and it's all gone in a flash.
Staff that failed to make random idea #32 work might very well make random idea #33 work. If you take a failed project and wait to start assembling a brand new team after you think of random idea #33, you're already years behind. What if your competitor just kept the team and moved right on to random idea #33? You're done! Scary! (But at some point, money doesn't matter, and I think most of the founders / execs at these big companies are more than finished. If they go out with a whimper instead of a bang, it doesn't really change their life. So, sell that stock today I guess!)
Funny thing is, I think I can pin the problem on the rank-and-file at just one company. The reality is that most of the front-line just do whatever they’re told. When you have e.g. toxic culture, that comes from top down, or is at least given a free pass by the folks at the top.
There will be rare exceptions here and there. I’ve seen a company that made something that people wanted, but they simply did not have the marketing, money, and focus to acquire enough users to break even, and lost to a competitor that had an inferior product but went gonzo on their marketing. But maybe you could say that that was a fault of marketing, product, and senior leadership, not the org making the product.
So anyway, my retort is that if you do not know what exactly is broken in your org, then you have bleeped up royally. There is practically always a very specific reason, and you don’t address a specific problem with a blind sledgehammer.
Which is to say, assuming you are not actively looking for the exit door, why even bother to do your job? At-will employment and all that, but it is an entirely different thing if the company has announced they have a fixed dollar expense target to hit.
Layoffs have always had a random component to them (I know brilliant people shown the door, yet worthless mouth-breathers who can dodge any bullet). Now we are told to potentially hang on for a year, knowing the axes could strike at anytime to make sure management hits their blood quota?
Needless to say, I expect productivity to be astounding for the foreseeable future.
The entire company has been told they could lose their job anytime in the next 14 months. People with options will start looking to leave, those without alternatives will live in fear.
There's certainly no incentive to "go the extra mile" and be a high performer.
Only the high performers still have jobs.
There’s one reason - from experience, it’s a lot easier to find a job if you are currently employed. So if you think you will likely be a target in round 2 or 3, the rational thing to do is to try to stay employed as long as possible and switch jobs quickly. Also, the severance tends to get worse with each round. I saw one job where round one got 3 months severance plus a week per year, with insurance, round 2 got a month, and round 3 got 2 weeks. I found new employment between rounds 2 and 3.
It seems like there are quite a few people here who have never experienced a tight labor market.
If you drive stock prices down three times a year, layoffs will happen three times a year.
If you drive stock prices up, they'll go on a hiring spree. It's that simple.
Who all? This isn’t exactly a short-selling subreddit.
In this case, though, it's deserved. Nobody can "drive the price down." That's a futile pursuit, and would be illegal if it worked.