I remember hearing a take on layoffs that I think is pretty true: When you fire the bottom 10%, you lose another 10% who are from the top performers. The destruction of psychological safety for everyone at the company is irreparable, and you start to bleed your most productive talent, too.
Layoffs Don't Work
41–50 of 801 posts
Re: Layoffs Don't Work
#42Layoff are like hammers: When needed, in the hands of someone skilled, they work perfectly well. But such situations are sadly rare, compared to frustrated idiots grabbing hammers to get their quick "Hulk Smash!" dopamine hits.
When it is your money making payroll, than the perspectives rapidly shift.
If your Labor doesn't tangibly produce quantifiable profit, than you must furlough staff to stay in business. Assigning fault in such situations is a fools errand, as everyone suffers losses in the end ($18k to $45k in lost training resources per person etc.)
Best of luck, =3
Re: Layoffs Don't Work
#43Earlier quoted context omitted.
1) But I included an actual argument and, furthermore, it assumed that the research is correct. > I've seen enough 10x engineers get laid off... 2) That is sensible for the company. They have no idea how to use a 10x engineer, as can be detected by the fact that they're having layoffs. They don't know how to create value in the market and they're being forced into a position where they have to squeeze what they can o…
> 2) That is sensible for the company. They have no idea how to use a 10x engineer, as can be detected by the fact that they're having layoffs. They don't know how to create value in the market and they're being forced into a position where they have to squeeze what they can out of what assets they have. Okay, now explain why every company is encountering these issues where they're frequently laying off people and ar…
> now explain why every company is encountering these issues where they're frequently laying off people and are unable to create value.
Creating value is hard.
Re: Layoffs Don't Work
#44> After the early-2000s dotcom bust, Bain researchers found that stock prices for S&P 500 companies that had no layoffs or laid off less than 3% of their workforce increased an average of 9% in the next year. Meanwhile, stock prices were flat in companies that laid off between 3%-10% of their workers, and prices plummeted 38% for companies that laid off more than 10%.
Failing companies go through layoffs. Companies like Sun Microsystems, Kodak, Sears, Circuit City, Kmart all went through lots of layoffs. But everyone knows that's not what killed them.
Re: Layoffs Don't Work
#45Layoff are like hammers: When needed, in the hands of someone skilled, they work perfectly well. But such situations are sadly rare, compared to frustrated idiots grabbing hammers to get their quick "Hulk Smash!" dopamine hits.
But surely the billionaires in their lavish lifestyles, they're the ones that really know how to run a frugal enterprise.
Re: Layoffs Don't Work
#46> After the early-2000s dotcom bust, Bain researchers found that stock prices for S&P 500 companies that had no layoffs or laid off less than 3% of their workforce increased an average of 9% in the next year. Meanwhile, stock prices were flat in companies that laid off between 3%-10% of their workers, and prices plummeted 38% for companies that laid off more than 10%. Failing companies go through layoffs. Companies l…
> But everyone knows that's not what killed them.
Another addition I'd like to add here is more often then not wrong people get booted while the "dead weight" tends to stick around and becomes even deader due to a motivation fall from the layoff. So maybe it doesn't kill, but for sure exacerbates an already bad situation.
Re: Layoffs Don't Work
#47I wish those departments tasked with busywork would be able to build skunkworks inside these dysfunctional molochs and be able to keep what they create. Fired into becoming a startup.. a man can dream.
Re: Layoffs Don't Work
#48The other question is why C-suite does even need to tell the respective division management to lay off employees if the actual goal is cost reduction. Shouldn't they impose a budget reduction target instead and trust them to allocate the savings between capex, opex and salary budget according to specific situation at hand?
> actual goal is cost reduction For many companies the largest cost is labor. Also in many companies, managers amass power by the number of people they manage. If the C-suite doesn't explicitly push for layoffs they will likely not happen, causing them to not reduce costs as quickly as they wanted.
Nah I've been in meetings before where it was asked "if we can find these ten million in cloud costs and licenses, can we retain staff?" and the answer was "no, because those are different buckets."
Regarding "managers try to amass staff," I've seen some of that for sure, but it's not universal and acting like it's some kind of iron rule of organizations is an op.
Most managers are evaluated based on the impact their organization is having, not the size of it, unless the firm is incredibly poorly run.
What does happen, and where these layoff edicts come from, is that the executives fear the management is more loyal to their directs than they are to leadership. They feel that if they want to inflict something on the workforce they have to "force" management's hand, because otherwise management will resist.
Re: Layoffs Don't Work
#49I remember hearing a take on layoffs that I think is pretty true: When you fire the bottom 10%, you lose another 10% who are from the top performers. The destruction of psychological safety for everyone at the company is irreparable, and you start to bleed your most productive talent, too.
Why do you lose 10% of your top performers?
Re: Layoffs Don't Work
#50> Research has consistently shown he was right about layoffs: They’re damaging to companies... The research is probably misleading. The damage was done to companies when the over-hired people who couldn't add enough value to justify keeping them employed. The layoffs are just when the damage is recognised. It is like borrowing a huge amount of money, using 90% of it it to buy prawns and leaving them out to rot for a…
> A lot of people treat economics as though damage didn't happen unless someone acknowledges it.
This is what I call the TV effect. People are trained from an early age, by consuming media, to only construct what is "real" by what is announced. And it's not just economics, but all sorts of aspects of life.