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Layoffs Don't Work

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Re: Layoffs Don't Work

#61

Post by austin-cheney »

woopsn wrote: post #55
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…

> You don't know what you're talking about. People are fired when they can't add enough value to justify being employed.

That depends upon the employer. Layoffs occur for a plurality of reasons and the persons selected for termination are selected by various different criteria that may include quotas or random selection.

Re: Layoffs Don't Work

#62

Post by Muromec »

Avicebron wrote: post #37
roenxi wrote: post #25

Earlier 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…

Unfortunately as I've seen countless times, it's also writing on the wall to the management team "TIME TO MOVE ON CAUSE DAMAGE TO ANOTHER COMPANY", I don't know why we don't expect management's head on the chopping block. If a captain orders a course into an iceberg, idk why we can't just hang the captain and course correct.

Because nobody orders hanging themselves.

Re: Layoffs Don't Work

#63

Post by Muromec »

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 have a good chance of hiring a better employer and will either do that or stop being your top ten percent

Re: Layoffs Don't Work

#64

Post by llm_nerd »

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.

Companies churn through people constantly. Google famously has an employee tenure of like a year[1]. Most companies that subscribe to the Jack Welch "fire your bottom 10% yearly" philosophy don't usually declare a media stock-pump "layoff" but are just letting go of purported non-performers constantly. And there are a lot of "top 10%" performers who are very happy that the so-called deadweight isn't kept around just for some foolish notion of "loyalty".

Sometimes layoffs are unfair, and sometimes the wrong people are let go. But often it's entirely necessary and the right people are let go.

[1] - Which makes the whole gruelling, multi-month hiring process positively ridiculous. It would be much better for this industry if companies hire fast and fire fast, instead of delusions that they're finding the magical employee base that will be with them forever.

Re: Layoffs Don't Work

#65

Post by ellisv »

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.

Even if mostly the “right” people are laid off, laying off a wrong person can have a cascading effect.

Good people like to stick together. Get rid of a couple and the rest will start to leave.

Re: Layoffs Don't Work

#66

Post by dv_dt »

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…

There is the question of if layoffs saved the company enough to save itself or improve? And with that data you could say layoffs by themselves don't.

Today the question is why companies making good profits are making layoffs. And looking at the damage they cause is relevant in trying to predict company performance

Re: Layoffs Don't Work

#67

Post by oblio »

dartos wrote: post #16
dustingetz wrote: post #8

Earlier quoted context omitted.

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

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…

Heh, and there's at least one FAANG where it's not even the layers of management.

They've just removed a huge amount of manager discretion and initiative through multiple top-down dictates that are pretty much killing any low level desire to really innovate and try risky initiatives.

IBM, but with same level product market fit as IBM had for its mainframes, but in this case for markets 100x more important for the global economy.

It's just sad.

Re: Layoffs Don't Work

#68

Post by mhog_hn »

kibwen wrote: post #58
malfist wrote: post #33

Earlier quoted context omitted.

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.

What is the long term effect on accuracy when a large mass simply moves XX% of their monthly paycheck into top ETFs?

I don’t disagree with what you said though, simply sharing thoughts - I think it leads to markets being more sensitive to macro strategies rather than actual fundamentals

Re: Layoffs Don't Work

#69

Post by sleight42 »

The top comments read like HN of a decade or two ago when armchair exporting was rampant.

Paraphrasing: "I, an engineer, am smarter than an economist therefore the article is wrong."

Nothing of value to be found at the top of the comments.

Re: Layoffs Don't Work

#70

Post by rsfern »

wiradikusuma wrote: post #56

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…

I think you’re right that it’s better to avoid these issues in the first place, but your perspective on furloughs instead of layoffs seems a bit fatalistic. I think a company that did rolling furloughs (and importantly was transparent about the whole process) would probably maintain pretty good morale, especially if the rest of the industry is laying people off. But yeah singling people out for furlough would probably be a big morale hit
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