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by nytesky 1244 days ago
The layoffs aren’t about actually saving the cost of those specific employees.

Instead, the threat of being laid off is being used as a stick to bring the remaining employees in line — productivity has been lower the last few years, and leadership has no real way to measure on an individual level or how to improve it, so putting the pressure on employees is a tried and true tactics.

Further, they can make lower TC offers to future employees, and give lower raises, pointing to the “need” to do so as demonstrated by earlier layoffs.

So you lay off 6% but freeze the wages of the remaining 94% (who are grateful to have a job rather than carping about wages not tracking inflation) — big savings.

4 comments

Pretty sure layoffs decrease productivity of the remaining employees, unless you're a H-1B visa worker, no one "works harder" after layoffs. Morale is low, resentment over "now I have to do X as well" grows and productivity gets hit.
I don't stay after a big round of layoffs for the same reason I'd rather buy stocks when they look like they're going up, not down.

The company is signaling that it is not doing well - why shouldn't I leave for a company that is doing well?

The only way I'll stay is if you want me to be part of a real plan to turn things around. And my involvement in that has to be rewarded - not just at the successful end of that process, but immediately.

The thing is there is no important signal about a specific company here, everyone is doing layoffs, the same as in previous years that everyone was in a hiring spree ignoring the actual company fundamentals. You can't just leave a company which is laying off people because everyone around you is also doing layoffs!
Nearly all major tech companies have announced layoffs in the last few months. Which companies would you say are "doing well" right now?
I’m assuming that with the major tech companies all laying off it becomes difficult to find another gig.
I'm hoping I don't have to find that out any time soon, but I prefer staying in the space of unknown enterprisey, line-of-business backend orgs. FAANG/MAANG and adjacents seem to be allergic to these roles and I never see their resumes.
Mid size companies in the b2b space are still hiring. Companies that consumers will never have heard of.
Are they paying FAANG salaries at $300k+?
No, which is why I'm not yet too worried about them flooding the space and taking all the jobs away. I've never seen it happen before.
This is my main point from personal experience. I worked at a company that had almost yearly layoffs (caused by a late transition to the online world and competition). I knew whole teams that were reduced to a single person. Now that person has to do support 24x7, new feature requests, general information requests etc. Thank god I did not have to deal with that. Also it's very difficult to hire when people know the company is/has been doing layoffs.
I always assumed the rationale was this:

That employee now doing extra work accepts it because they are either scared of being laid off themselves, know they can't find a better job elsewhere, have irrational loyalty to the company, whatever. In any case the company benefits by exploiting the person.

If instead the person leaves, then the process fails and the issue rolls up the org hierarchy. Now the leadership evaluates if this process was actually necessary anyway. If not, let it die or let the shit roll downhill elsewhere. If it was important, invest in the refactor that everyone knew was probably necessary anyway.

For corporate leadership it's an easy way to either squeeze more out of the peasants, or force a reevaluation of priorities.

A bunch of the recent layoffs aren't considering individual performance as a primary factor. Whole teams get cut if that project is no longer a priority. Roles get cut as part of a reorg.

When this happens, this doesn't push employees to do anything better; it sends the message that even if you're great at your job, you may be cut because the company changed its mind about what's worth pursuing.

> productivity has been lower the last few years

Any statistics to back that up? I've read both narratives (this one and the one that conflicts it) countless times over the Internet the past few years. I have no idea what is true.

A lot of people defend work from home and say it makes people more productive/work more overall. If that were the case, why are some of the brightest companies like Google/Apple against it?

Not sure about stats, but it’s definitely the impression of companies leadership.

https://www.washingtonpost.com/business/2022/10/31/productiv...

It's hard to be surprised by this.

The pandemic may have acted like a reset on how work could fit into one's life. There's no going back from a perspective like that. I suspect that the idea of a career ladder simply doesn't work as well on younger generations as it may once have, for it may assume that growth occurs (making room for people).

It also assumes that people trust institutions to take care of them.

Bingo! Not many people realize some firings actually increase productivity.
Source? Because there is actually research beeing put into these results, that it decreases productivity:

https://www.gsb.stanford.edu/insights/why-copycat-layoffs-wo...

Perhaps but not at any of the companies currently doing the layoffs.