“Copycat” layoffs won’t help tech companies or their employees • Hacker News Board

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

#141

Post by flashgordon » Sun, Jan 22, 2023, 7:18 PM UTC

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…

One thing I've seen "performance" is largely subjective. It is not just X cls or Y design docs (and you can see how these artifacts are easily gameable). A large part is visibility, likeability and awareness of org politics. A lot of them are maximizing personal gain over company gains. As a reasonably well-performing manager and former IC (as well as getting my share of not so great ratings) this was the game I hated but accepted to play - after many years of denial. And don't worry, companies know this. Check out Macleod's hierarchy or Man in the high castle!

So if you are worried that "top" talent will leave don't. Their departure is not damaging the company as much as the boat remaining unrocked!

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

#142

Post by idopmstuff » Sun, Jan 22, 2023, 7:20 PM UTC

msbarnett wrote: post #97

idopmstuff wrote: post #56

Earlier quoted context omitted.

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…

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.

Reading a bunch of responses, I feel like I should qualify my initial comment slightly - I really meant it as being specific to these circumstances, in which the largest/most successful companies are doing layoffs.

I generally work at early-stage startups, and I 100% agree with you - at those, if layoffs start, barring some extraordinary circumstances, it's time to get the hell out because your options are about to be worth bupkis.

When it's FAANG, etc. I don't think that's true. Amazon and Microsoft can lay off swathes of people and still have plausible outcomes in which their stock prices are higher in a year or two (perhaps even more plausible than they were pre-layoff).

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

#143

Post by thenerdhead » Sun, Jan 22, 2023, 7:21 PM UTC

While I don't agree with this single reduction of the cause to just "imitation", I do really like his views on jobs in general.

One quote I remember him saying is "You should never have to leave a job involuntarily".

An interesting way to think about this is to read any CEO's book on leadership and compare it to the actions they have taken in the last few years to see if it represents authenticity or imitation. If imitation works, then you ought to do it. Which seems to be working for these companies especially looking at hiring trends over the last few years and the layoffs recently. Imitation is at the heart of human survival after all.

It just sucks that in the world of knowledge work, the division of labor is still there. Many knowledge workers are capable of becoming specialists in relatively short periods of time. But rather the focus remains hiring new people who have the specialty today. That seems to me to be a big takeaway for these companies who lay off already loyal employees, culture fits, and show the curious persistence of learning.

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

#144

Post by hinkley » Sun, Jan 22, 2023, 7:21 PM UTC

coredog64 wrote: post #28

sovnwnt wrote: post #14

> 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 the pain. This doesn't seem like a good strategy for tech. Cutting everyone's salary will dislodge your top performers who can get a better position even in poor market conditions.

I don’t think the math checks out: Salary isn’t the only expense, so you might be looking at a 15% wage cut to keep 10% of the workforce. With stock performance, I’ve already taken a 10% wage cut. Cut another 15% in cash and I’m gonna be super unhappy about my comp.

Hence management taking a bigger cut.

Some solutions to this include furlough rather that straight cuts. Those do reduce some infrastructure costs. I can’t reduce service staff and contract work at all if everyone is working 40 hours a week still. We use the same toilet paper, water, electricity, other consumables and depreciating equipment. A saw blade cuts X feet of metal. But I can trim if everyone is working 37 hours.

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

#145

Post by roncesvalles » Sun, Jan 22, 2023, 7:22 PM UTC

in_cahoots wrote: post #126

roncesvalles wrote: post #122

Earlier quoted context omitted.

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.

I'd rather join a company post-layoff than pre-layoff.

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

#146

Post by frozenlettuce » Sun, Jan 22, 2023, 7:22 PM UTC

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…

Also, in some countries it is illegal to do a paycut.

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

#147

Post by mejutoco » Sun, Jan 22, 2023, 7:22 PM UTC

coredog64 wrote: post #28

sovnwnt wrote: post #14

> 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 the pain. This doesn't seem like a good strategy for tech. Cutting everyone's salary will dislodge your top performers who can get a better position even in poor market conditions.

I don’t think the math checks out: Salary isn’t the only expense, so you might be looking at a 15% wage cut to keep 10% of the workforce. With stock performance, I’ve already taken a 10% wage cut. Cut another 15% in cash and I’m gonna be super unhappy about my comp.

Plus inflation on top.

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

#148

Post by hinkley » Sun, Jan 22, 2023, 7:23 PM UTC

kris_wayton wrote: post #132

I can't help but wonder how many of these layoffs are really just "rank and yank" in disguise. Where the company will soon go back to backfilling pretty much the same spots from the open market. And, funny enough, if the pool is full of companies doing the same thing, well...it's essentially just trading your laid off workers for someone else's.

I think the stock market agrees. Stocks tick up after a first round of layoffs. It’s seen as fat trimming.

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

#149

Post by la64710 » Sun, Jan 22, 2023, 7:24 PM UTC

We need to have broad discussion and consensus to establish three things 1) How to pass the value created by AI and automation to all levels of the human society and nature 2) How to make sure there is equitable access to power of computing and AI and 3) Ensure governance of these forces to ensure benefits to all of society.

Don’t worry they are not my words. They are Sam Layman’s but they make damn good sense to me. Unless of course we want to stay in this mode for ever.

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

#150

Post by idopmstuff » Sun, Jan 22, 2023, 7:24 PM UTC

blagie wrote: post #123

idopmstuff wrote: post #56

Earlier quoted context omitted.

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 m…

> 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.

This is very true, and I would say definitely the biggest weakness of my point. In a theoretical world in which you can drop the bottom 10% of performers, I think that's clearly the right thing to do, but obviously practice is not the same as theory.

I will say the one other thing about 10% paycuts for these companies that would drive me out is that the companies are still making lots of money. If you're in a business where belt-tightening is plausibly necessary (something that has boom/bust cycles, for example, and hits a particular bad bust one), maybe I can accept a pay cut. If you're cutting my pay but still maintaining a shareholder dividend, I am gone.