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“Copycat” layoffs won’t help tech companies or their employees

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Re: “Copycat” layoffs won’t help tech companies or their employees

#121

Post by hinkley »

sovnwnt wrote: post #53
sausagefeet wrote: post #19

Earlier quoted context omitted.

> Cutting everyone's salary will dislodge your top performers who can get a better position even in poor market conditions. Will it? Are your top performers only there because of the pay? And how do you even determine who your top performers are? I see this sort of logic frequently and I don't even know how to measure it, much less believe it.

> Are your top performers only there because of the pay In an ideal work environment, probably less so than other employees. But I think anyone who has their salary reduced is going to reevaluate their position, and those with more valuable skills are more likely to leave. The question is, what is more likely to cause a serious reevaluation, salary reductions or layoffs? I think for most tech companies, a single roun…

Everyone reevaluates their position after a layoff.

And people who quit don’t get severance, so it’s a win-win for the company. Or at least, they seem to think it is.

Re: “Copycat” layoffs won’t help tech companies or their employees

#122

Post by roncesvalles »

in_cahoots wrote: post #112
msbarnett wrote: post #97

Earlier quoted context omitted.

If you’re a top performer you bail as soon as there are layoffs anyways. I certainly do. It’s rarely a sign that anything good is in your future, they’re often performed poorly, and the work environment post-layoffs is incredibly bleak and disheartening. If you have options there’s no good reason to stay.

Where would you go in this environment? Most of the top-name companies have had layoffs themselves, or at the very least are at the hiring freeze stage of the layoff routine.

The "we're in a hiring freeze" press releases all have fairly broad asterisks. New people are being onboarded daily in all of the companies that announced layoffs.

Re: “Copycat” layoffs won’t help tech companies or their employees

#123

Post by blagie »

idopmstuff wrote: post #56
tarr11 wrote: post #31

The professor recommends across the board pay cuts as an alternative to layoffs. > One thing that Lincoln Electric, which is a famous manufacturer of arc welding equipment, did well is instead of laying off 10% of their workforce, they had everybody take a 10% wage cut except for senior management, which took a larger cut. So instead of giving 100% of the pain to 10% of the people, they give 100% of the people 10% of…

I think the problem with this strategy is that it causes the wrong people to leave. If you're a top performer, you're going to feel like a 10% pay cut is very unfair, and you're going to be able to get another job elsewhere fairly easily, even in this environment. If you're not performing particularly well, it probably doesn't feel as unreasonable, and even if you don't like it, it's tough to leave. When done correct…

Having seen both, I'm much more likely to leave /after/ a layoff than after a 10% paycut.

In abstract, if there were a way to rank employees by ROI and contribution perfectly fairly, I might not worry about layoffs personally. However:

1) In my career, I've never seen layoffs which were at all good at selecting the bottom 10%. Who gets dropped is pretty random.

2) I care about other people I work with. A 10% layoff means a few of my friends were hurt.

When I had a 10% paycut because the business needed it, it felt a little unfair, but I didn't leave. That same business raised my salary back up a year or two later. I'm still there, actually, and many people spend entire careers here.

I spend most of my hours working, and above some point, I care about having a humane employer, meaningful work, and a decent work environment much more than I do about salary.

Job stability also allows me to focus on my work over signalling. That works well if I value and enjoy my work (which I do).

Re: “Copycat” layoffs won’t help tech companies or their employees

#124

Post by ryandrake »

jmyeet wrote: post #90

It makes me physically ill to hear billionaire CEOs "take full responsibility" for the layoffs in an impersonal email while taking no pay cut themselves. Look at Meta as one of the worst offenders. Meta's layoffs will save what? $5 billion a year? Assuming those employees were actually producing some value, the true savings will be less (since you also have to factor in severance costs). Now consider that Meta has sp…

> It makes me physically ill to hear billionaire CEOs "take full responsibility" for the layoffs in an impersonal email while taking no pay cut themselves.

To be fair, Microsoft's executives partied with Sting[1] right before announcing their layoffs. They probably would have rather had Lady Gaga perform for them, but had to take some responsibility so they settled for Sting. It's hard times for everyone.

1: https://www.marketwatch.com/story/microsoft-hosted-sting-con...

Re: “Copycat” layoffs won’t help tech companies or their employees

#125

Post by ljm »

idopmstuff wrote: post #56
tarr11 wrote: post #31

The professor recommends across the board pay cuts as an alternative to layoffs. > One thing that Lincoln Electric, which is a famous manufacturer of arc welding equipment, did well is instead of laying off 10% of their workforce, they had everybody take a 10% wage cut except for senior management, which took a larger cut. So instead of giving 100% of the pain to 10% of the people, they give 100% of the people 10% of…

I think the problem with this strategy is that it causes the wrong people to leave. If you're a top performer, you're going to feel like a 10% pay cut is very unfair, and you're going to be able to get another job elsewhere fairly easily, even in this environment. If you're not performing particularly well, it probably doesn't feel as unreasonable, and even if you don't like it, it's tough to leave. When done correct…

It will also hurt you more if you’re on a lower salary. 10% on a 300k FAANG salary is a lot different to 10% on an 80k administrative job - you’re going to feel the pinch a lot more on 80k than you are on over a quarter of a million.

Re: “Copycat” layoffs won’t help tech companies or their employees

#126

Post by in_cahoots »

roncesvalles wrote: post #122
in_cahoots wrote: post #112

Earlier quoted context omitted.

Where would you go in this environment? Most of the top-name companies have had layoffs themselves, or at the very least are at the hiring freeze stage of the layoff routine.

The "we're in a hiring freeze" press releases all have fairly broad asterisks. New people are being onboarded daily in all of the companies that announced layoffs.

That’s true, but those same companies still wound up doing layoffs later on. So if your criteria is not to work at a company without layoffs then you’re still SOL.

Re: “Copycat” layoffs won’t help tech companies or their employees

#127

Post by jurassic »

habibur wrote: post #30
pookeh wrote: post #3

I always wondered if high profile CEOs and shareholders know something substantial of the upcoming future that us leaf nodes are just clueless about. Is it just copy cat or deep info for privileged clubs?

They know what we all already had been knowing, nothing new. But were slow to react. Everyone had been believing that there will be a huge surge in economic activity post-covid, aka starting from 2022. Therefore over hired in the pandemic to catch the market. We know that didn't happen. Rather Ukraine war has dampened it further. Now they are hurrying to correct it. They were dragging feet initially, but Musk's succe…

It what way was Elon's layoff successful? They'll probably be bankrupt in less than a year.

Re: “Copycat” layoffs won’t help tech companies or their employees

#128

Post by chrismcb »

tarr11 wrote: post #31

The professor recommends across the board pay cuts as an alternative to layoffs. > One thing that Lincoln Electric, which is a famous manufacturer of arc welding equipment, did well is instead of laying off 10% of their workforce, they had everybody take a 10% wage cut except for senior management, which took a larger cut. So instead of giving 100% of the pain to 10% of the people, they give 100% of the people 10% of…

Cutting 10% of the staff isn't the same as cutting 10% of all wages. I would also think you run the risk of losing some of your best performers

Re: “Copycat” layoffs won’t help tech companies or their employees

#129

Post by ascotan »

di456 wrote: post #7

This misses the main driver. Valuations are no longer based on growth. The entire market has shifted to profitability over growth. Companies with a stronger balance sheet coming out of the recession will be better positioned for the long term. Seems that companies that gained their valuations through growth weren't sustainable in the long run. And at a macro level, economic policy has largely deferred recessions sinc…

Cutting people as a form of making companies more profitable doesn't work as per the article.

Re: “Copycat” layoffs won’t help tech companies or their employees

#130

Post by revlolz »

lapcat wrote: post #87
revlolz wrote: post #33

Deleting the post, I no longer wish to discuss this.

It's unclear how the fed rate directly affects high revenue high profit giants like Google, Microsoft, and Amazon.

It's very clear and has been. Larger enterprises finance debts that carry interest rates. When rates go up, costs increase. It's the exact same thing in the mortgage industry. When you go to buy a home, how much you can afford is determined by your how much you earn, how much capital you have, and the interest rate to borrow what you don't have. We're going to ignore full cash purchases because companies do not operate on full cash basis.

The point to my main post is that it's asinine to relate all these layoffs as "copycatting" one another. It would be like saying you only eat food because I do and you are copying me.

Or it would be like saying each of us has 10 days worth of food to survive 30 days. I implemented rationing to stretch out to the 30 days. You implemented rationing adopting the same strategy, but to say you are a "copycat" would be ridiculous.

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