This is incredibly dumb.<p>> The downsized companies, however, were outperformed consistently by the nondownsized ones during the initial two years following the downsizing.<p>Can you think of any confounding factors in this analysis? How do you control for important factors like, say: <i>whether the board is in enough financial trouble to downsize</i>?
Nobody likes getting laid off. But it's weird to see all of these think pieces implying that once someone is hired into a job, that job should exist forever.<p>Things change. Company growth isn't monotonically increasing. Not all positions will exist forever. Joining a company was <i>never</i> a guarantee that you'd have a paycheck and work to do until you decided to leave.<p>Also, pointing out that companies that did layoffs had worse performance than those that didn't have layoffs is an impressive example of missing the point. Layoffs usually are a result of declining performance, not the cause of it.
I think the crappy thing here is because upper management wants to plan a layoff in extreme secrecy, they put themselves in the position of not being able to consult with the parties that have the most context. The cuts end up being crude and poorly targeted because of this secrecy. Because the assumption is that an employee who is being laid off, or thinks they may be laid off, becomes a liability immediately, no knowledge transfer or hand meetings can happen, and people may abruptly be cut off from internal systems. The company then has some extra short-term issues from the remaining staff trying to cover for their laid-off peers while missing important information and context.<p>The responses to this post, of "we're adults that accepted an at-will employment contract" are correct. But if we all had that attitude, and if execs could treat staff like responsible adults rather than potential saboteurs, perhaps a more targeted, less disruptive and ultimately smaller layoff could be arranged.<p>(updated for typos)
The dog analogy is terrible.<p>You should never, ever consider your employer to be your family. The employer is not your friend, nor a relative. They are your employer.<p>I really dislike the whole "let's build the team spirit and be a great family together" approach. It's dishonest, and often done with the (explicit or implicit) intention of brainwashing.<p>Also, this goes both ways: I was an employer for the majority of my professional life. I had the best intentions and tried to be "good" and a friend to my employees, only to get screwed over many times in various ways by people later on. I learned that a professional relationship is different from a family relationship, and while you should try to be fair, you should never confuse the two.
This was too dumb.<p>First, the intro with the dog analogy. If you remotely see your relationship with your employer as you being the beloved family dog, you're the problem.<p>Second, the author quotes a paper on downsizing in a journal and afterwards says, "[i]n all my searching I wasn't able to find any hard data which suggests layoffs either enable a company to better compete or improve earnings in the long term." However the conclusion of the very paper he references says, "[t]he findings of this field study indicate that downsizing can improve an organization's financial performance but not in the near-term.... [R]esearch strongly suggests that it likely will take three or more years for organizations to be able to truly see the financial benefits of downsizing." If you look at all the graphs in the Results section of the paper, it shows that companies who downsize started out being weaker performers than those who weren't downsizing, but a few years after downsizing they were largely able to close that underperformance gap.
I see it more from an investor perspective.<p>What do you read into a company that starts doing large scale layoffs even though it has a massive hoard of cash and remains massively profitable, just because some temporary trouble hits?<p>Given the company can easily retain the staff from a financial perspective, and employee churn is incredibly expensive - it has to mean they really, truly they can't think of anything useful to do with those staff. From that you would have to conclude that management and the board are simply out of ideas for how to grow the business.
> Imagine you had a dog...<p>Imagine that instead of a dog, it's an adult who makes their own choices and gets paid money, and who signed a contract where the terms of employment were spelled out very clearly..
Posting social media videos of "a day in the life of FANG" company showcasing the little amount of work people do doesn't work either.<p>There's a lot of people at these companies who don't do anything meaningful and are getting paid a boat load. There's people like that in almost every company.<p>Back from the Yahoo peak days I had multiple people tell me that all they did in a week was fix 1-2 small bugs in a day and didn't do jack shit the rest of the week and got paid handsomely. Probably explains in-part the demise of Yahoo as a tech company.<p>My point is, layoffs typically target workers who are not needed by the company anymore.<p>People do layoffs in their personal life too. Your house cleaner or landscaper gets laid off when you decide to stop using their services as you try to do the work yourself and save some money.<p>This ultra-left stance on layoffs being bad is ridiculous. It's part of the business cycle and economic outlook the companies are facing.
"the Cruelty is the Point"<p><a href="https://www.latimes.com/business/technology/story/2023-01-30/column-how-big-tech-is-using-mass-layoffs-to-bring-workers-to-heel" rel="nofollow">https://www.latimes.com/business/technology/story/2023-01-30...</a>
I do not see myself as a dog and my employer as my owner. It's a very weird/inaccurate analogy, and a bad way of looking at an employer.<p>Dogs don't choose their owners. Dogs can't leave their owners and find another one if they don't like the current one. Dogs can't educate themselves on which owners are more or less likely to value their skills, and aren't over-adopting dogs because it's the trend to do so in 2021, even though they're obviously not going to want to keep all these dogs around once their absurd growth rate slows down.<p>The layoffs suck and I hope the people affected land on their feet, but this dog analogy is nonsense.
"In addition, nearly one-third of the executives thought their companies terminated the wrong person at least 20% of the time, and approximately an additional quarter indicated that their companies made the wrong decision 10% of the time."<p>Within corporate decision-making, this rate is actually "fucking genius" level. This article doesn't say what it thinks it says.
> You got the dog when it was young, trained<p>I get the point, but we are in the 21st Century. Very few people stay a Company (assuming stats are true) as they did before the 1990's.<p>In this case, the dog would have expected to stay in that home forever, where people in a company would probably move on after a few years.
This is a completely naive view of companies and how they work.<p>An alternative metaphor is this: imagine you got a dog, raised him, lost your sources of income and couldn’t afford to feed him. You kept him anyway out of pride or loyalty or whatever, and watched as he withered away without adequate resources to make him thrive. At the same time, others were looking for dogs and were fully willing to feed them and support them.<p>When companies don’t do thoughtful adjustments like layoffs, they end up instead in a cycle of slow withering, where the best resources leave and aren’t replaced, and the quality of the workforce slowly decays.<p>Layoffs may not be “fun” but they’re a necessary part of operating a successful company… and much better than the alternative.
<i>This place isn't your home, these people aren't your friends and your executive leadership would run you over with their cars if you stood between them and revenue growth. Your relationship to work changes forever. You will never again believe that you are "critical" to the company or that the company is interested in you as a person.</i><p>This has always always been the case. Grow up.
Layoffs work, I just think companies tend to layoff the wrong folks.<p>I had 7 layers of management between myself (IC) and the CEO at my last job with just a couple thousand people. How much of a “multiplier effect” can those people truly have? What ended up happening was feature creep ran too large, the company scrambled to hire engineers to keep up with pace of development, then the debt caught up with them once interest rates blew up.<p>Honestly, layers between ICs and CEOs should be logarithmic. 0 layers for 10 employees, 1 layer for 100, 2 layers for 1000, etc. IMO the “multiplier effect” ends with line managers
The Steve Jobs quote makes me hopeful that Apple won't follow their lemming peers off this cliff.<p>Hopefully the payoff for Apple is significant and obvious so that at least some learn the lesson in the article.
This is obviously false. Layoffs do work. 2003 - 2007 is not a sufficiently long enough period to assess layoff impacts on a company.<p>For example:<p>>Apple Computer Inc. said late Friday it was slashing its work force by 4,100 in a last-ditch effort to save the troubled computer maker.<p>> Out of the total number affected, about 2,700 are full-time workers. The remainder are part-time and contract employees. The cuts will affect about 30 percent of Apple's work force. Fifty-five percent of the job cuts will be in the United States.<p>(Source: <a href="https://money.cnn.com/1997/03/14/technology/apple/" rel="nofollow">https://money.cnn.com/1997/03/14/technology/apple/</a>)<p>This is from 1997 in the pre-Steve Jobs era when Gil Amelio was CEO.<p>You can call it what you want, but if that action didn't occur at that time, Apple as we know today may not have existed.<p>I am picking Apple as a deliberate example because they are the the only big-tech company that hasn't announced a large scale layoff (yet). So, many people may be quick to jump to point out, "Look Ma! No layoffs at Apple".<p>For a large corporation, business cycles are a reality and layoffs become part of the tactic. It is very unpleasant for the people involved. But, that doesn't mean it doesn't work (in the long run).
I feel what you're putting out and hopefully one day we will be a better species. I worked for a company in 2013 which will always be the benchmark that I compare other companies against. They treated me like a person that mattered and the members of my team were definitely my family. The company cared enough to give everyone catered breakfast and lunch, massages twice a week, a game room, and the freedom to work on projects that mattered to us. I had to complete a briggs myers personality test in the beginning, came back as ENTJ. HR brought in a coach to talk about how I can apply my strengths internally to make the company a better place and how I can personally grow. It was a great experience and I doubt another company like this exists. I spent 3 years there as a linux sys admin (it became devsecops towards the end). I grew more in this job than I did in any previous position I held. When I was laid off, I started questioning my self identity and went thru some serious depression of missing my co-workers.
Having a single source of income is becoming more and more problematic in current times. If you are married you have at least two sources of income, that may be the biggest _economic_ advantage of the marriage. Those layoffs make me realise why so many people are interested in FIRE movement and passive income. Either you have savings (but fiat currency discourages that) or some source of extra cash flow (be it minimum that allows you to survive) or you are at the mercy of current economy climate (be it FED printing or FED tightening or stock market frenzy). Maybe the universal basic income will be come the solution to this problem in the future?<p>With more automation and unstable world economy we will probably see more layoffs. Entire industries may go extinct.<p>Yes I am on more pessimistic side, but the last decade was great for software engineers and as the Bible says after 7 good years there may be 7 bad years coming.
> Coming up with a scientific way of determining who is doing a good job and who is doing a bad job is extremely hard.<p>In fact, it's probably impossible.<p>On the other hand, everyone knows who the deadwood is on their team.<p>> Cruel<p>I know multiple instances of coworkers getting laid off, and being very angry about it. But a year later, they'd ruefully admit the company was right to lay them off, and they had been pushed off-center and decided to do what they really wanted to do - like start a business. More than one was laid off for coming to work high, and as a result got clean. They were, after a year or two, all better off and happier than before they were laid off.
> Imagine you had a dog…<p>I used to have a dog.<p>When I had to get rid of her I ended up in the VA mental health ward for ten days because I tried to shoot myself in the head, not completely because of the dog (becoming homeless helped a lot) but I’m pretty sure it was a significant contribution.<p>To top it off if you take “a dog” to the pound it’s free but if you take “your dog” down there it costs $80 so the poor little thing lost her name because I didn’t have $80 so she was “this dog wandering around the neighborhood I found”.<p>One of the hardest things I’ve ever had to do was get rid of that dog and I’ve done some pretty hard things in my life.<p>Tell me more about your coworkers being out of work for a couple months before finding that next job.
I think Amazon, Google, and Meta workers should band together and get funding to start competitors to these companies. If there were some smart investors, that would be a great way to start a new company.
Disclaimer: I am NOT advocating for layoffs, I do agree with their cruel nature.
However, this comment in the article is ignorant:"Sure, except presumably at-will employers could have done that at any time if they had hard data that suggested this pool of employees weren't working out."<p>Here is why. Just because someone is at-will doesnt mean the manager has the power to fire someone without any repercussions. Management can be a political house of cards and "layoffs" is a safe blanket to wipe these people out.<p>case 1:
Another deadweight case is to rip through the relational bias. Fred is a very nice guy and he does an OK job, but could the market provide someone else cheaper and/or better than fred? since hes not excelling lets roll the dice and find out. Fred wouldnt normally get let go because hes doing just the bare minimum to get by and there is no case for such a thing.<p>case 2:
manager is incompetent(say it aint so!) and is hiring the wrong people. What a mess! how do you deal with that?! Time to clean up the whole department and start fresh.<p>The obvious downside of layoffs is that all too often, talented, loyal, and undeserving people get caught up in the mix, but at least management "feels terrible about it"
I find it serves one better to deal with feelings directly. Going on such a long roundabout is a distraction. Do we really care about how large companies deal with their problems? Are we running one, do they depend on our judgment? I think not.<p>So, the more straightforward way is to realize that one has been fucked over. At first it doesn't matter who's responsible for that, just the fact that one feels that it happened, and that it feels like shit. Talking to people about that helps. It someone is worth their salt, they'll tell that this has always been the case - the one that cares about a person the most, and especially the one that can do the most, is the person themselves. And another important realization is that most of the time, this doesn't happen because of specific cruelty - most of the time, it's ignorance. The other party didn't care to consider the impact of their act, and that is <i>normal</i>. There's not enough energy to care about all. And even if we care, sometimes things must be done. Or we need to take part, even if we know the impact and don't want that.<p>I do believe that this all doesn't need to make one jaded and cynical all the time, about life and people. In fact I believe the opposite: that one needs to find a way to love all this, <i>in spite of</i> all of these things working in such a way. After all, to love, one needs to know. Because if one doesn't know, they don't know what they love in the first place.
> A common argument I've heard is "well ok, maybe layoffs don't help the company directly, but it is an opportunity to get rid of dead weight". Sure, except presumably at-will employers could have done that at any time if they had hard data that suggested this pool of employees weren't working out.<p>I'm guessing letting an individual go carries higher risk of a wrongful termination suit than a bulk layoff, so there is still an incentive to mask performance-based decisions with economic justifications.
I think the way they’re structured in most orgs is dumb for the org.<p>Layoffs should be an opportunity to embrace and accept the Peter Principle and lower a series of people down a rung until you layoff the least valuable person.<p>Of course that only works if managers/directors/seniors/whatever can do the job immediately below them. I think they should but many places think “a manager is a manager and can manage any kind of team” which I think is bunk.
There isa logical conclusion of this: The quality of an individual's work is irrelevant in a bigco.<p>1) It is generally accepted that the best people leave first in this kind of layoff. But 3 years later, the corporation is doing as well as the others. Hence, removing the best people does no damage to a bigcorp.<p>2) A post in this thread describes how regular aggressive layoffs turn the culture toxic, setting people against each other. But one common response in nature is cooperation: people form a clique, and exclude colleagues who could damage them. They make nonmembers perform badly by e.g. witholding information. This sers outsiders up for being laid off. An evolutionary pressure selects for people having the political prowess to survive layoffs, and against good performers which endanger the status quo.<p>So a bigco's level of performance does not depend on having good workers. Instead, all this points to the work performed by the worst workers to be the major determinating factor for success.
Companies don't care if layoffs work. They are confident that when the time comes, they will replace the dismissed with other employees. Whether the new hires will be as efficient and skilled as their predecessors is, of course, a question mark. But they don't care. Please stop thinking of companies as emotional creatures. The only thing companies care about is money. Who cares people.
Whether it’s good or bad for business, the practice of layoffs is becoming more widely accepted. This can serve as a reminder to employees not to become complacent, which is one reason that companies do it. An unfortunate consequence is that employees become more likely to game the system to keep their jobs. Gaming the system can take many forms : avoiding risky assignments, covering up chronic problems, and blaming others. Once people see that these approaches result in greater job security then the incentives for doing the right thing become obscured. At my last job, a cyber-security startup that had a large layoff, this process of gaming the system ruined the software engineering culture. No one wanted to fix a bug, or talk to a customer, or implement a new process, without first checking to see how it would affect their job security.
Layoffs are like going on a diet: in the short term companies are able to maintain discipline through a mixture of execs getting their feet held to the fire by shareholders and employee panic. In the long term, execs are gonna do the same old shit that they always do.
How do you define "don't work"?<p>It depends on what goals you have.<p>Sometimes products, services, teams and organizations are not aligned with the business strategy, and have to be restructured.<p>Sometimes there are locations with a high cost of life, but the value generated at those locations are not proportionally higher.<p>Sometimes you have outliers in the compensation distribution that no longer meet productivity expectations. Some individuals make key contributions and then stop making them while enjoying the same benefits.<p>And sometimes you have pseudoscience like "Vitality curve" style layoffs which are proven to make things worse.
It seems to me that many tech workers are experiencing, for the first time, the hard reality that:<p>a) Companies may be formed, operated, and controlled by people, but they are complex systems that do not have feelings and do not care about individuals no matter how much the culture warriors say otherwise. They are systems designed to survive, with or without you.<p>b) We are not defined by our jobs<p>I'm not making a case one way or another for capitalism, or layoffs, or the meaning of life, rather pointing out that this is the reality in which we live and once you realize these two points, things will make more sense.
The default state for a company is to produce a yearly layoff. This has been dramatically reduced since gen y hit the work market because they were leave the company instead of stressing and they were important as they were bringing the tech power to the industry<p>Now they are getting old and there is no short of people to work on tech so the cycle restarts.<p>Honestly if I do get in a company that practices this I will quit.
It has done horrors to people close to me and they will never recover.
Clearly the only good answer here is that tech companies should never have employed so many people to begin with. These tens of thousands of people were paid massive salaries and equity only to have that cruelly taken away when the company realized years later it can’t sustain all those projects.<p>I implore these corporations: Please stop hiring so many people if you can’t guarantee lifetime employment!
It was always going to be either layoffs/comp cuts or no big bubble in salaries and hiring to begin with.<p>Surely there's much worse to come? Look at how much compensation came down in investment banks since the 00s. It's not conceivable that these large firms require tens of thousands of geniuses to function.
Well it depends on the kind of business you are running.<p>It seems that nowadays software companies mostly work on modularized toy problems that new grads can solve effectively.<p>If you go to the chemical industry that is not the case. Layoffs in senior personnel will bite you within months.
Crazy seeing some of the comments in here supporting the layoffs when just a few decades ago people were up in arms about IBMs layoffs because working for one company for a significant portion of your career was seen as the norm.
> In general, the study found that both downsized and nondownsized companies reported positive financial outcomes during this period. The downsized companies, however, were outperformed consistently by the nondownsized ones during the initial two years following the downsizing. By the third year, these differences became statistically nonsignificant.<p>But in the absence of layoffs perhaps those companies would have done <i>worse</i>. Therefore we could easily argue that this does not contradict the claim that layoffs do work. In particular layoffs are not meant to make a company grow faster than other companies, they are meant to prevent extreme bloat and inefficiency and get back to a normal baseline. So if we assume that context the data makes more sense.
If your employer is a corporation and you are loyal to them, I'm sorry to inform you but you are very gullible and naive.
Be loyal to people and be loyal to principles instead.
Layoffs are cruel and are often done poorly.<p>It is really hard to say if they work or not since there is no consistent reason why they are done and picking some external measure doesn't prove much.
This is dumb. Dogs don't cost $100k per year to keep in the house. Dogs don't cause the owners of the house to risk loosing the house due to the dogs expenses.
> The downsized companies, however, were outperformed consistently by the nondownsized ones<p>I think this misses a piece of logic. A reason companies downsize because their growth plans didn't come through. Like at the moment where tech companies scaled up for the pandemic imagining growth would continue at that rate.<p>So now we are saying that companies that made a sound strategic plan perform better than companies that had to rip their plan up and start again. Layoffs are the effect, not the cause.<p>It is childish to say that layoffs don't work. When a company runs out of cash it dies. Losing staff is hard, but if you can't afford them you can't afford them. Most managers hate layoffs too, even a psychopathic manager would see it as a failure.<p>So whilst layoffs may set back your plan, at least the company survives.<p>For clarity, there is no excuse for being shitty to staff during layoffs. US labour laws seem particularly weak in this area.
Let's grant the argument. Layoffs can still serve employers' purposes in other ways. Have you heard of a lot of climate walkouts at big tech companies recently?
Companies need flexibility, markets are more free and efficient allocators than central control, and people don't all deserve the same wealth because some people are really doing more useful things than others, but we have the capability to provide everyone healthcare and enough money to live simply and comfortably no matter how productive they are as individuals simply because it improves the condition of life and we don't have to become communist to do it.
I think it's a huge mistake. The great labor shortage is just beginning. You can thank the retiring boomers for that. (And I hope they enjoy their retirement!)
this satire of a laid-off techie being interviewed is going viral
<a href="https://www.youtube.com/watch?v=Nivva7G1XFw">https://www.youtube.com/watch?v=Nivva7G1XFw</a>
I think layoffs are a social contagion in a lot of cases, an excuse to overcorrect for overcorrections and all of that but...<p>the cruelty is the point.<p>eta: if the economy at large is adding 500,000 jobs as reported today this makes the laying off companies look either foolish or somehow specially in a downturn.
If they don't work, it's probably because they are too late. Every company I've worked at has had a bunch of people who don't actually work.<p>One example:
I was talking to someone at a social event and they was complaining that her company had laid off so many people they was doing the work of 3.<p>They then went on to say that they was running two fantasy football leagues.<p>I asked them what kind of computer they had at home and they looked at me confused and said "oh no, I don't have a computer at home. If I did then they would expect me to work some there too"<p>From that I realize that they (singular) was doing the work of three people and running two fantasy football leagues in their eight hour work day.<p>This may be exceptional, but with all the talk of quiet quitting, and all the other observations of people not working at work, I don't think it's all that rare.