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“Copycat” layoffs won’t help tech companies or their employees

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Re: “Copycat” layoffs won’t help tech companies or their employees

#51

Post by wpietri »

treis wrote: post #35
blinkingled wrote: post #12

Earlier quoted context omitted.

How do you define productivity in this context? Musk style LOC? How many features you shipped? Let's pick one of the more sensible ones - features you shipped. Who defines those features - is top level management responsible for the product vision, overall strategy that then middle management turns into features? For companies like MAANG that are already hugely successful and have hit a wall so to speak, they don't n…

Are you arguing that productivity, however defined, isn't down at these companies?

I think you have missed most of blinkingled's point, and I encourage you to address it fully.

Re: “Copycat” layoffs won’t help tech companies or their employees

#52

Post by broast »

wpietri wrote: post #4

I love this point: "The tech industry layoffs are basically an instance of social contagion, in which companies imitate what others are doing." I really wish for a less supine tech press. I've not seen any of these titans of industry being held accountable for the apparent major mistakes of overhiring. And I'm not even talking actual consequences here; these people will surely get bonuses for this. I'd just like to s…

Do we have any evidence that the over-hiring was a mistake? Could companies not have seen the free money and decided to beef up their staff for short term gains in their roadmap, with the knowledge and intention that they will likely be cutting later while getting to keep all that intellectual output? I don't see why we put this past them.

Re: “Copycat” layoffs won’t help tech companies or their employees

#53

Post by sovnwnt »

sausagefeet wrote: post #19
sovnwnt wrote: post #14

> instead of laying off 10% of their workforce, they had everybody take a 10% wage cut except for senior management, which took a larger cut. So instead of giving 100% of the pain to 10% of the people, they give 100% of the people 10% of the pain. This doesn't seem like a good strategy for tech. Cutting everyone's salary will dislodge your top performers who can get a better position even in poor market conditions.

> Cutting everyone's salary will dislodge your top performers who can get a better position even in poor market conditions. Will it? Are your top performers only there because of the pay? And how do you even determine who your top performers are? I see this sort of logic frequently and I don't even know how to measure it, much less believe it.

> Are your top performers only there because of the pay

In an ideal work environment, probably less so than other employees. But I think anyone who has their salary reduced is going to reevaluate their position, and those with more valuable skills are more likely to leave. The question is, what is more likely to cause a serious reevaluation, salary reductions or layoffs?

I think for most tech companies, a single round of layoffs is preferable, as the people who you want to remain are more likely to feel they aren't and won't be affected and not reevaluate their position. The reductions approach could work for smaller or startup companies with a flatter structure, where employees are more invested in the company's goals and successes, either through culture or shares.

Re: “Copycat” layoffs won’t help tech companies or their employees

#54

Post by vineyardmike »

zht wrote: post #46
tarr11 wrote: post #31

The professor recommends across the board pay cuts as an alternative to layoffs. > One thing that Lincoln Electric, which is a famous manufacturer of arc welding equipment, did well is instead of laying off 10% of their workforce, they had everybody take a 10% wage cut except for senior management, which took a larger cut. So instead of giving 100% of the pain to 10% of the people, they give 100% of the people 10% of…

You would need more than 10 percent pay cut to offset 10 percent in personnel spend. Health insurance/benefits is a significant source of spending

This probably is less true in tech where the salaries are higher.

Re: “Copycat” layoffs won’t help tech companies or their employees

#55

Post by oxfordmale »

petilon wrote: post #8

Not all of it is "copycat". During the pandemic consumer spending moved online. People purchased hardware to work from home, ordered more from Amazon and other online stores as opposed to physical stores, used online services such as Zoom and Microsoft Teams more. Tech companies responded to the increased demand by increasing the pace of hiring. Were they wrong to do so? Possibly, because they should have expected th…

Staff turnover in most companies is more than 15%. The same staff reduction could have been achieved by implementing a hiring freeze, moving people to strategic projects and putting underperforming staff on a performance management plan. However, as layoffs are now normal, it can be done without looking weak.

Re: “Copycat” layoffs won’t help tech companies or their employees

#56

Post by idopmstuff »

tarr11 wrote: post #31

The professor recommends across the board pay cuts as an alternative to layoffs. > One thing that Lincoln Electric, which is a famous manufacturer of arc welding equipment, did well is instead of laying off 10% of their workforce, they had everybody take a 10% wage cut except for senior management, which took a larger cut. So instead of giving 100% of the pain to 10% of the people, they give 100% of the people 10% of…

I think the problem with this strategy is that it causes the wrong people to leave. If you're a top performer, you're going to feel like a 10% pay cut is very unfair, and you're going to be able to get another job elsewhere fairly easily, even in this environment. If you're not performing particularly well, it probably doesn't feel as unreasonable, and even if you don't like it, it's tough to leave.

When done correctly, layoffs give 100% of the pain to 10% (or whatever) of the people, but you get to select the worst-performing people. Spreading the pain equally is much more liable to cost you your best-performing people.

I do think the one important thing to note is that the reference you quoted is to a manufacturer, where you've probably got more consistent performance across a given type of employee as compared to software developers.

Re: “Copycat” layoffs won’t help tech companies or their employees

#59

Post by s1artibartfast »

MiscIdeaMaker99 wrote: post #37
wpietri wrote: post #4

I love this point: "The tech industry layoffs are basically an instance of social contagion, in which companies imitate what others are doing." I really wish for a less supine tech press. I've not seen any of these titans of industry being held accountable for the apparent major mistakes of overhiring. And I'm not even talking actual consequences here; these people will surely get bonuses for this. I'd just like to s…

I would love to see the capitalists held accountable for the way they treat their workers, but I believe their decisions are primarily dictated by profits, regardless of what they say. Hard questions can surely be asked, but once you weed through all of the empty narrative, you pretty much end up with the reason: extracting profits.

It is hard to find anyone who honestly suggests it is otherwise.

It was never about the workers. Layoffs are because companies think the workers cost more than they make. Everything else is just bickering over why they think this.

Re: “Copycat” layoffs won’t help tech companies or their employees

#60

Post by silvestrov »

wpietri wrote: post #22
sovnwnt wrote: post #14

> instead of laying off 10% of their workforce, they had everybody take a 10% wage cut except for senior management, which took a larger cut. So instead of giving 100% of the pain to 10% of the people, they give 100% of the people 10% of the pain. This doesn't seem like a good strategy for tech. Cutting everyone's salary will dislodge your top performers who can get a better position even in poor market conditions.

Will it? Most of the top performers I know are not very motivated by money, and instead value doing interesting work with people they like. Granted, there are a set of people who are very good at job-hopping while executing a performance of being a top performer. But maybe a company will do just fine those people hop away. Maybe it would do better.

I think it is an S-curve: if you are below the curve, or just on it, then pay amount matters a lot.

But above the curve, everything else matters a lot, especially having a good boss / project leader and a project that makes sense / is actually used by people.

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