The way I've seen it play out time and time again is the most expensive staff are let go first when money starts to run low. If you've never been let go, have you considered you simply might be undercharging?
I disagree pretty highly. I've seen it in this order:
1. First are the flight risks. They're likely to split soon after a layoff event anyway, so might as well factor them in.
2. Second are functions that would be otherwise crippled or left unable to do their job well (eg: if you fire a flight risk manager and her team is working on a project that will no longer be needed, might as well cut the rest). Smart companies do the whole layoff this way.
3. Performance based. Highly paid employees are generally highly paid for a reason, and their value in terms of revenue impact generally exceeds their pay. Judgement calls will be made about performance; if the company is old school and still doing performance reviews, they'll be taken into account, but they're most likely incorrect anyway.
Politics will always come into play, but people tend to take layoffs more seriously than either hiring or promotion, and make a huge effort to make the best decisions they can to leave the company with a team that they believe works.
If they're "expected to quit soon" because they seem bored with the place and they've been planning to move on to advance their career, they'll probably go without a lot of wailing and gnashing of teeth. Of course, if they're "expected to quit soon" because they're seething with rage and angry about everything, the reaction might be quite the opposite!
As to why lay off instead of waiting for them to quit, probably because you've been told to reduce headcount now, not at some indeterminate future date.
Which is to say, if you use the layoff list as a measure of "value received" and you the company gets some value from keeping you employed, and you get some value by being employed. Then being at the top of the layoff list means you are getting way more value out of being employed than the company is, and being at the bottom of the list means the company is getting way more value out of you being employed. So if you are aggressive shoot for the top, if you are defensive shoot for the bottom :-)
This comment pretty much nails it. I've definitely seen a pattern of highly compensated people getting sacked.
If someone does play the aggressive pattern I'd highly recommend saving up a lot of cash so you can weather longer spells of unemployment. This is especially true if you intend to be selective in who you work for after getting laid off.
There is an effective upper limit on what you can be paid because of peer issues (companies can't always pay what they should to a high performer because of the effect on other employees), but there is no upper limit to the value you can provide to a company. This can create the situation where an employee is paid the most possible, but they are contributing far more value than they cost. These are the sort of employees that employers will move heaven and earth to retain in any layoff scenario.
I don't think so. I think I've contributed value that justifies my salary. But I've also had managers willing to fight for me during layoffs. And I've been fortunate, I suppose, to work for generally decent employers, and never really had a bad manager.
Full disclosure: at my first job, I went from 50K to mid-100's in less than 4 years. My current total compensation is in the high 2xx as an individual contributor. I would be surprised if that were under-market.
>I've been fortunate, I suppose, to work for generally decent employers
Perhaps you've worked for employers when they could afford to be decent - which is not quite the same thing.
Being fired for being too expensive is a very real thing. Ask anyone laid off by IBM recently, or who was put on a PIP and fired for non-performance a few months before qualifying for retirement and a company pension payout.
Tangentially, talk of non-productive employees always reminds me of this:
High 200s as an individual contributor? That's north of what directors at iBanks make in many cases here in NYC (and salaries here are already higher than most other places for tech workers).
My guess is that you're working contract at a very lucrative rate? Or perhaps you're at some kind of financial firm that offers a hefty bonus :-D
Not at all - see senior dev engineer salaries at Google [1]. High 2xx seems reasonable. I may have missed GP's comment about being in finance, otherwise I don't see the relation to finance salaries.
On Blind (yet another anonymous app for employees at BigCos) there have been dozens of people reporting 300k+ salaries at Google/Facebook/etc. Most recently was a Senior Software Engineer at Netflix with a $420k base (Netflix doesn't really do stock as a significant part of comp).
I find that memo very odd. It's been my experience people involved in a 21 member "sewing circle" aren't there by choice - they've been directed to attend the meeting by their boss. Where I work sometimes people go to these kinds of BS meetings and then stay late to do their actual work.
Aren't most of the expensive staff those who contribute the most to a company's success? So why would you cull there? I mean what's the thought process behind firing those and keeping those who contribute less?
This will not be true if a long service worker accumulated a huge seniority based increments. Even past high performers who has taken their foot off the pedal would be in this group.
1. First are the flight risks. They're likely to split soon after a layoff event anyway, so might as well factor them in.
2. Second are functions that would be otherwise crippled or left unable to do their job well (eg: if you fire a flight risk manager and her team is working on a project that will no longer be needed, might as well cut the rest). Smart companies do the whole layoff this way.
3. Performance based. Highly paid employees are generally highly paid for a reason, and their value in terms of revenue impact generally exceeds their pay. Judgement calls will be made about performance; if the company is old school and still doing performance reviews, they'll be taken into account, but they're most likely incorrect anyway.
Politics will always come into play, but people tend to take layoffs more seriously than either hiring or promotion, and make a huge effort to make the best decisions they can to leave the company with a team that they believe works.