[jkukul]

I think there are several reasons to do it this way:

- Effective number will be higher because some employees will be disgruntled because of the layoff event and will leave on their own. It's usually estimated that the effective number is twice as high

- By doing a layoff you can quickly get rid of people who are overpaid. The attrition would take much longer. And with the regular performance review process you can only get rid of under-performers

- With a layoff you can get rid of entire teams, wouldn't happen normally

- Finally, and probably most importantly, shareholders expect a layoff, especially if other companies had already done it. Cargo cult CEO thinking. You could see the stock price rising for some of the previous companies announcing layoffs

[kirkules]

- tech labor cost is depressed most effectively when everyone is doing it

- everyone is doing it so it's that much easier to buck responsibility for the decision

[vintermann]

Can attest to this. I worked at an open source consultancy for a while. During a tough period, and having made some bad bets (trying to get into the enterprise Java world), they did some downsizing - or actually, it was more like warning that there would be downsizing. A lot of people quit, not even waiting to get a severance package. Including many people they definitively weren't happy to lose.

[brandall10]

Addressing point by point:

- Why is this beneficial? The disgruntled will be the high performers. In no shape or form is this beneficial for culture.

- Assuming you mean average performers who are paid well, ie. well tenured? Considering these types harness significant domain knowledge it would be a strategic mistake to let them go in any meaningful number. The focus on smaller cuts tends to be low performers or recent hires.

- The only time this is beneficial is when there is indeed 1) a financial dire straights situation or 2) a significant change of course (ala Google) and blood letting has to be rapid, otherwise you're letting go of top performers in the process. It would be much cheaper to reassign to other teams given the cost to source/acquire and onboard top talent.

- Bingo. This is the primary reason almost always.

[jkukul]

1. I actually also think it's not beneficial. However, company leaders must realise of this side-effect yet it doesn't stop them from lay-offs. I just wanted to point out a difference vs regular attrition, since this was the question asked by OP.

2. I could also be people hired recently, it is often the case that they're paid more than their peers on the same level.

3. Maybe re-assigning people from a dismantled team doesn't make sense because these people will be upset about their former team being dissolved and thus spread the negative energy to other teams?

4. I'm glad we agree :)