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Layoffs Don't Work

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Re: Layoffs Don't Work

#121

Post by luckylion »

DanielHB wrote: post #95
JadoJodo wrote: post #74

Having lived in the Boise (Idaho) area, I saw this happen over and over with Micron and HP. I knew dozens of people who had worked for one or the other (and sometimes both) and were then let go in those companies frequent mass layoffs. One person I knew had been laid off → rehired by Micron 3x in the span of 10-years. I think the biggest issue is that it is far too often the _first_ tool that companies reach for, ins…

In Europe where most countries are notoriously hard to fire people they don't do layoffs like that "just to be safe", they instead just cut-back on hiring more people during though times. It has an impact of morale, but not nearly as bad I imagine. I wonder if that is one of the reasons why Europe companies tend to be smaller companies, while US tend to be bigger. Expansion is easier when you can fire at any time, sm…

I don't know whether it's a reason for size ("one market" isn't just about taxes, it's also about culture and language, and that's more different in the EU than the US), but it definitely makes companies more risk-averse towards expansion and disadvantages people with non-average backgrounds. The risk your CV suggests (e.g. mental health, unemployment, non-traditional career) gets multiplied if it's close to impossible to fire you.

Re: Layoffs Don't Work

#122

Post by llm_nerd »

pclmulqdq wrote: post #84
llm_nerd wrote: post #64

Earlier quoted context omitted.

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…

I think if you look at companies like Citadel, which routinely fire the bottom 10% as part of the job description, it attracts a certain set of people who actually do feel "safe" in that environment. The trouble comes when you break your norms about layoffs. Also, Google's median tenure of <1 year was due to hiring, not employees leaving. In other words, that number included people who hadn't left yet. I think if you…

>Also, Google's median tenure of Google would have to be growing at >300% per year for this math to make sense.

But even if it's 3 years ({X} doubt), that's still cartoonishly low for a hiring process that drags on for months and months.

>I think if you look at companies like Citadel, which routinely fire the bottom 10% as part of the job description

Almost all tech companies target firing/pushing out a considerable percentage of employees per year. It actually is incredibly common, even if it usually doesn't make the news. They used to do it overtly via stack ranking, but now they just do it more quietly. Microsoft punted 2000 "low performers" in the first two months. Brutal firings with zero severance, immediate cancellation of health coverage, etc.

Re: Layoffs Don't Work

#123

Post by mathattack »

I’ve been through several waves of corporate layoffs across many industries.

Some observations:

1 - It’s rarely one round.

2 - Companies tend to be the most thoughtful on the first round. Then it looks easy and the precision (and severance) of future cuts goes down. That’s why it’s smart to take a voluntary offer.

3 - Cuts that are broad based (“Every department cuts 15%”) are a sign the company doesn’t know what’s going on or prefers harmony over hard choices.

4 - Layoffs can be a crutch for firms that don’t do performance management. (Less work to do a layoff than have managers counsel bad performers out)

5 - Managers should never promise “No layoffs”

Re: Layoffs Don't Work

#124

Post by sejje »

EPWN3D wrote: post #115
sejje wrote: post #49

Earlier quoted context omitted.

Why do you lose 10% of your top performers?

Top performers have options and value stability. They also know that they rely on their manager to accurately reflect their work up the chain. Some percentage of top performers report to deadbeat managers, so in an environment doing mandatory layoffs, they'll know that it doesn't matter how much they knock it out of the park, their manager will screw them. So of course they'll leave.

If you're a top performer stuck under a deadbeat manager, how are you able to signal to new companies that you're a top performer?

I read posts here all the time about how hard it is to hire. How do top performers distinguish themselves as they go out for new jobs? When did this become easy?

Re: Layoffs Don't Work

#125

Post by throwaway3572 »

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…

Also, failing companies that use layoffs to restructure can succeed. For an example see IBM in the 90s. It’s hard but possible. And since the article uses stock price as a proxy for success, IBMs stock struggled for a long time afterward. It hit an all time high in 2025.

And then there are non tech industries that just go through cycles, like oil.

Re: Layoffs Don't Work

#126

Post by billy99k »

thrance wrote: post #15
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

I'll start to call this mindset the "DOGE mind-virus": "80% of workers are doing absolutely nothing and can be cut with no repercussions whatsoever". Sure buddy.

Well, it worked for Twitter. Lots of people screamed that Twitter would implode withing 6 months, after the massive cuts. There was some scrambling for a while, but I haven't noticed any issues. In fact, they've added tons of new features and Grok AI (which is much better than competitors).

Re: Layoffs Don't Work

#127

Post by sejje »

eschneider wrote: post #83
sejje wrote: post #49

Earlier quoted context omitted.

Why do you lose 10% of your top performers?

Because people will often see people who they don't perceive as low performers getting lumped in with 'low performers' and laid off. At that point, you start looking for management that seem to know what they're doing.

But only top 10% start looking?

This all sounds like a hand wavy hypothetical.

Re: Layoffs Don't Work

#128

Post by Eextra953 »

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.

That's how I feel about it too, the times I've been around layoffs management and the executives all talk about a difficult economic environment and making the organization leaner by firing a bunch of IC's. Never once have I seen a C level say hey we steered the company in the wrong direction its time for new management or hey our CFO failed to communicate the economic environment and caused us to overspend so we're going to look for a new one.

I know it's ridiculous to expect them to blame themselves but the fact that we just accept this lack of accountability from executives/management in the corporate world is insane to me.

Re: Layoffs Don't Work

#129

Post by gruez »

nthingtohide wrote: post #120
gruez wrote: post #105

Earlier quoted context omitted.

>E.g. no HFT firm should be able to make a profit from such a stock market. Selling stocks earlier and often should result in a penalty or percentage being taken away as a fee. Maybe by "HFT" you only mean "those evil hedge funds that are pushing companies to chase next quarters' earnings", but there's nothing fundamentally wrong with high frequency trading. Market making[1] is high frequency trading, and basically i…

I am not saying HFTs can't sell but there should be penalty for higher frequency. It means they have to craft algorithms which will take longer term view of stocks (and their fundamentals) rather than ignorance of other participants

Market makers make fractions of a percent per trade. How will your "penalty for higher frequency" deter traders that prey on "ignorance of other participants" or whatever, but don't put market makers out of business?

Re: Layoffs Don't Work

#130

Post by karparov »

cratermoon wrote: post #93
ellisv wrote: post #65

Earlier quoted context omitted.

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.

Even if, from the company's perspective, if lays off all the "right" people, some of those people will be "wrong" from the point of view of other people on the team. Maybe the company didn't value a certain person, for corporate or HR reasons, but there's always a chance that person was a valued team member for human reasons. Layoffs will lead to people leaving, regardless of how surgical or random they are.

Exactly. Somebody who is universally hated by their co-workers should just be let go. Nothing to do with a layoff. So everybody who is around has some reason for actually being there. In a well-managed place, that is.
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