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Why is every layoff 10-15%?

blog.eladgil.com

11–20 of 263 posts

Re: Why is every layoff 10-15%?

#11
Fortunately I've never had to invoke blanket headcount cuts.

But, as an employer, I've been given the advice "cut once, cut deep" many times. The theory (which I understand) is that employees get skittish once you get to a second or third cut.

The author suggests some companies could stand a 50% cut if that is what is needed.

This month though we've seen twitter cull 50% and twitter users, and customers (advertisers) became equally skittish.

Do twitter employees feel safe? Does the "cut once, cut deep" have the desired effect here? Are customers reassured [1]?

Maybe twitter is a unique case because of other factors - Elon? The fact that people can make their opinions heard on, well, twitter? The fact that other media are reliant on twitter traffic and buzz?

My guess is that employ confidence after a round of layoffs is dependant on their faith in management to begin with, and the clarity of communication between management and staff. Perhaps a transparent financial reality helps employees understand that what they do affects the bottom line, and that line pays their salaries.

Re: Why is every layoff 10-15%?

#12
I think if you only need to get rid of say 3%, then you can probably just do a hiring freeze and wait for natural turn over. If you need to get rid of 40%, doing it all at once is probably too much of a shock to the company (too difficult to figure out who to transfer responsibility to). So 10-15% is just right: enough to be worth it, not too much to cause excessive turmoil.

Re: Why is every layoff 10-15%?

#13
> Remote work

> Anticipate more mid-size and smaller companies will go back more fully into the office as times get tougher. This will not be one size fits all, but will be an increasing trend.

Up to this point in the article, whether you agree or disagree with the points, the author offers some arguments and reasoning supporting each. Here, they simply assert that small and mid-size companies will go into the office, with no supporting argument. Why? Won't many small and mid-size companies have come up under covid and not have an office lease in the liabilities column? Why would they pay (insert large city) rents to save money? How does it help?

Re: Why is every layoff 10-15%?

#14

I think Scott Adams figured this out in 2005: https://dilbert.com/strip/2005-06-11

This reminds me of a story I heard about Steve Wozniak's time at HP: They were going to lay off 10% of the staff, but instead they decided to reduce everyone's pay by 10% and give them an extra day off every two weeks.

Re: Why is every layoff 10-15%?

#15
post #6

Earlier quoted context omitted.

Yeah, exactly, and you only actually use 10% of your brain. Probably don’t need two hemispheres to be honest.

Since we know that to be false, I assume you're just being a smartass. If you disagree, there are more polite, constructive ways to say so.

Sorry if it seems flippant, but I provided just as much justification for my argument as you did.

Re: Why is every layoff 10-15%?

#16
post #10

10% comes from the ancient Roman tradition of Decimation https://en.wikipedia.org/wiki/Decimation_(punishment) >> The dual purpose intended was to stiffen discipline amongst the army at large and to demoralise the enemy

I'm sure every executive is calling back to their days studying roman history when they decide how much of a layoff will balance the books/turn the company profitable for its stakeholders.

Re: Why is every layoff 10-15%?

#17
post #6

Earlier quoted context omitted.

Yeah, exactly, and you only actually use 10% of your brain. Probably don’t need two hemispheres to be honest.

Since we know that to be false, I assume you're just being a smartass. If you disagree, there are more polite, constructive ways to say so.

You made up a statistic, what good does it do to spread misinformation?

Re: Why is every layoff 10-15%?

#18

Interesting, but I think they're over-thinking it. A lot. At any given moment, most companies can probably justify cutting 10-15% of dead weight. But when you cross that line, that's a much different smell. The most talented get a whiff, update their CVs and head for the door. The goal is to cut the bottom and leave the top. Take off too much bottom and your top will leave "voluntarily".

Exactly. Take a look around and imagine your company with 10-15% less. Most people don't find that such a terrible idea.

That really depends on the distribution of the layoffs.

The 10-15% percent aren't necessarily all bad performers but might just be people working on teams that are to be disbanded entirely.

Re: Why is every layoff 10-15%?

#19
post #12

I think if you only need to get rid of say 3%, then you can probably just do a hiring freeze and wait for natural turn over. If you need to get rid of 40%, doing it all at once is probably too much of a shock to the company (too difficult to figure out who to transfer responsibility to). So 10-15% is just right: enough to be worth it, not too much to cause excessive turmoil.

Yeah, this is why all the experienced people bail even if they don't get laid off

Re: Why is every layoff 10-15%?

#20
post #13

> Remote work > Anticipate more mid-size and smaller companies will go back more fully into the office as times get tougher. This will not be one size fits all, but will be an increasing trend. Up to this point in the article, whether you agree or disagree with the points, the author offers some arguments and reasoning supporting each. Here, they simply assert that small and mid-size companies will go into the office…

> Won't many small and mid-size companies have come up under covid and not have an office lease in the liabilities column?

Were they started during Covid? Office leases are typically at least 5 years, so most existing companies will still have them, hence return.

Edit: removed assertion assertion

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