[dtdimond]

Group 1: companies in a good enough financial situation to not need layoffs Group 2: companies in a dire financial situation requiring layoffs

After 3 years, what group would you expect to perform better financially? And if we told you it was a tie, you might ask: what did group 2 to improve their situation? Layoffs? Ok, sounds like they worked.

[lapcat]

> Group 1: companies in a good enough financial situation to not need layoffs Group 2: companies in a dire financial situation requiring layoffs

None of the big tech companies are in a "dire" financial situation. Indeed, some of them have just announced modest revenue increases this week. Yet they still conducted big layoffs. Did they "need" to do it? (Note in contrast that Apple announced a significant revenue decrease yet didn't panic and do layoffs.)

[geph2021]

   Did they "need" to do it?

Yes, that's the question. GP's point is that the financial situation of the companies is a confounding factor, and unfortunately the analysis does not address this. The conclusion, "Layoffs don't work", does not seem to be supported by the data/analysis that was presented.

[simonh]

> Apple announced a significant revenue decrease yet didn't panic and do layoffs.

But then they also didn’t massively increase their headcount over the previous 3 years. Steady as she goes, as always.

[notinfuriated]

Depends on your definition of "dire." Perhaps some companies have Finance departments that believe they're in a dire situation when they have less than six months runway if all revenue stopped. I don't know what they factor in to the decision other than they believe their costs are too high given the current economic conditions.

It's kind of like me having plenty of money, right now, to afford Netflix but cancelling it anyway because I feel $14/mo or whatever the price is still too much for the value it delivers in the current year, and generally worried that I might need that $14 in a year (multiplied out across a bunch of other services or habits I engage in). I'd rather save my money now, as I've decided the situation is dire or could easily become dire. Am I actually cruel and obligated to keep my Netflix subscription (gotta make sure Netflix employees make a living) because I am not, at this moment, in what others perceive to be a "dire" situation?

[lapcat]

> because I feel $14/mo or whatever the price is still too much for the value it delivers in the current year, and generally worried that I might need that $14 in a year

What if you're wrong, though, and indeed what if many people are wrong in the same way, cancelling Netflix and passing up the opportunity of enjoyment to save a little money, but in the long run it makes no difference, and only hurts them in the short-term by depriving them of the enjoyment? That's the point of the article, that layoffs are empirically self-defeating.

It's not about a mythical "obligation" to employ someone. The cruelty comes from laying off people unnecessarily, when there's no benefit.

[Aeolun]

I think it’s more that cancelling your existing Netflix contract for a few months because it’s too expensive right now, knowing that you’ll likely want it again 6 month in the future, and knowing Netflix will likely increase the price to $21/month for new contracts, seems a little bit shortsighted.

[deafpolygon]

> Apple announced a significant revenue decrease yet didn't panic and do layoffs.

I would say that Apple is in the unique position of being particularly volatile since they rarely post losses. If they posted a decrease AND did layoffs, I'm sure some of their brightest would jump ship, and stocks would tumble further.

Plus they didn't really do a strong round of hire during the past few years.

[dbingham]

The assumption that the companies doing layoffs "need" to do layoffs isn't necessarily well founded. Really we should be comparing companies in comparable financial situations - with one group doing layoffs and the other not. For public companies, we could probably reasonably set up this comparison, but for private companies we don't have the data.

[Aeolun]

I don’t think there is nearly enough information there to conclude that.

In any case they’d still have lost two years of growth when their competitors were.

[tablespoon]

> Group 1: companies in a good enough financial situation to not need layoffs Group 2: companies in a dire financial situation requiring layoffs

Companies do layoffs all the time, even when their financial situation isn't dire.