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Layoffs Don't Work

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Re: Layoffs Don't Work

#51

Post by ChrisMarshallNY »

steveBK123 wrote: post #36
dartos wrote: post #16

Earlier quoted context omitted.

Got news for you. It’s not the devs who are bloating development costs. It’s the layers of management making hour long meetings to discuss button placement. It’s the hours of retros, design meetings, and skip-levels designed to remove any personal investment or sense of ownership from everything. Since so few individuals are trusted with real decision making power, you need a lot more people to achieve some kind of c…

Right every step of every dev task is ticketed, scheduled and measures within a millimeter of its life in many orgs. The people working the tickets aren't to blame when it all goes wrong in the big picture. I've worked at shops with agile coaches, consultants, product teams, multiple management layers, etc all attending agile planning/retro/blab sessions. They always had really strong opinions on the minutae of each…

> I'll decide where I'm going when I get to the next stop light

Surprisingly, this type of iteration can actually work; but the caveat is that the people behind the wheel, and reading the maps, need to be very good, and also, experienced enough to make sound decisions. If mediocre (or inexperienced) people try it, it’s a disaster.

From what I can see, the entire tech industry has been institutionalizing mediocrity, so this type of approach is not really available.

Re: Layoffs Don't Work

#52

Post by jFriedensreich »

sejje wrote: post #49
pclmulqdq wrote: post #41

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.

Why do you lose 10% of your top performers?

because they see the company struggles and is not loyal, as top performers have plenty of options they will be more likely to take a better offer when it comes along. Top performers will not leave the same day but bleed out over a bit longer timeframe. The most popular example is woz hesitating so much to leave HP because HP was loyal to employees and woz was loyal to HP. Imagine the same situation when HP had just let go 10% of employees, he would not have thought about it twice.

Re: Layoffs Don't Work

#53

Post by fx1994 »

marto1 wrote: post #46
andrenotgiant wrote: post #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 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.

We are a small team in big company, and management that made wrong decisions is still somewhere there but not my direct management, still getting same paycheck, car, cards and benefits but new managers (that accepted to take over and got brand new car for 100k€, cards and bonuses, bells and whistles) started to layoff workers so we know this is the end for my team, and of course they will do whatever it takes to "save the product", but not fix the the real issue... lack of good developers to fix terrible bugs in our product.

Re: Layoffs Don't Work

#54

Post by steveBK123 »

ChrisMarshallNY wrote: post #51
steveBK123 wrote: post #36

Earlier quoted context omitted.

Right every step of every dev task is ticketed, scheduled and measures within a millimeter of its life in many orgs. The people working the tickets aren't to blame when it all goes wrong in the big picture. I've worked at shops with agile coaches, consultants, product teams, multiple management layers, etc all attending agile planning/retro/blab sessions. They always had really strong opinions on the minutae of each…

> I'll decide where I'm going when I get to the next stop light Surprisingly, this type of iteration can actually work; but the caveat is that the people behind the wheel, and reading the maps, need to be very good, and also, experienced enough to make sound decisions. If mediocre (or inexperienced) people try it, it’s a disaster. From what I can see, the entire tech industry has been institutionalizing mediocrity, s…

Right

If you’re copying this approach from someone who copied it, after hiring an agile coach and reading the phoenix project, you are likely definitionally mediocre.

Also it’s not a one size fits all solution even for the competent. Requires a more direct interface and two way dialogue with users than most devs actually face.

Re: Layoffs Don't Work

#55

Post by woopsn »

roenxi wrote: post #17

> 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…

You don't know what you're talking about. People are fired when they can't add enough value to justify being employed. Sweeping industry-wide layoffs are different. Eg the "damage was done" to the aviation industry in 2001 due to plummeting demand, due (obviously) to new fears and hassle inhibiting travel; the damage currently being done to companies in the economy is from interest rates, inflation, trade uncertainty, stock manipulation, ...

Re: Layoffs Don't Work

#56

Post by wiradikusuma »

The article lists down why layoffs don't work, but companies keep doing it, so it must be working for them.

I hate layoffs (from both perspectives), but the article sounds like whining "we shouldn't break up".

The alternative of furlough only works if everyone else is doing it. If everyone else fires left right and center, the people being furloughed will still have low morale.

I think it's better to avoid it in the first place, by not over hiring, as others have pointed out.

Re: Layoffs Don't Work

#57

Post by gedy »

dustingetz wrote: post #8
DebtDeflation wrote: post #5

They used to be a once a decade "save the company during a recession" move. Now they seem to be a quarterly "manage earnings per share" move.

software development costs are out of control the whole industry is one big grift, there’s no accountability anywhere, 20% of the devs are doing 80% of the work, the business would instantly terminate the 80% for cause if they could only discern the difference, but they can’t, because the business side is also a big grift with the exact same problem all the way up to the founders recursively

> the business would instantly terminate the 80% for cause if they could only discern the difference

There's many many companies and leadership who want their big empires of people. I'm not too sure they want to fire 80% or be more efficient.

Re: Layoffs Don't Work

#58

Post by kibwen »

malfist wrote: post #33
fzeroracer wrote: post #18

Earlier quoted context omitted.

Running a business is less and less about actual business outcomes and more about juicing stock. And the stock market itself is divorced from reality as companies whose output has gone down over time sees higher valuations because the owner has cult appeal. So everything gets worse and more expensive year over year while feckless suits get sloshed over company dinners.

The stock market is like a sports betting pool where the players are allowed to bet on themselves

The stock market is just a predictions market, and any predictions market at scale destroys the subject of its prediction.

Re: Layoffs Don't Work

#59

Post by mattmaroon »

"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."

Do non-science journalists just not know about correlation vs causation? Does it really not occur to them that maybe the companies that didn't do layoffs were healthier and that's why they overperformed? Wouldn't a 10 year old know that?

Re: Layoffs Don't Work

#60

Post by roenxi »

trescenzi wrote: post #22
roenxi wrote: post #17

> 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…

This isn’t how all layoffs work though. Some, yes they are due to over hiring and a failure of management to plan. They are likely necessary for survival of the firm and generally last course of action. Although even those come with a cost to current and departing employees which harms the business. But the ones being discussed in the article are the consistent ones. The ones you do while you’re ahead to make your ba…

> But the ones being discussed in the article are the consistent ones. The ones you do while you’re ahead to make your balance sheet look better.

That has to be matched with a strategy of intentional overhiring though, and the damage is being done there. That is the insight that should be drawn from the research - intentionally doing something silly (in this case, overhiring) is a classic form of waste and economically destructive. Layoff or no layoff, the problem is the management team has set up a situation where they believe a big chunk of their workforce is unproductive.

This does raising the question of why boards and shareholders tolerate these clowns. To me the obvious answer being that the major central banks have a history of printing money and handing it out to asset owners, so hiring competent managers for said assets is a lot of trouble for limited gains - even weak managers are enough to drink from the money hose. But who knows, maybe the analysts think that a small amount of sillyness averts a greater problem.

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