221–230 of 310 posts
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…
2020
https://stanforddaily.com/2020/07/29/stanford-to-lay-off-208...
2009
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…
If you attempt to socialize losses and cut pay, your best employees leave for other opportunities while your worst performers stick around.
That’s a recipe for disaster in a competitive market.
When done surgically, laying off non-productive employees can improve the morale of the top performing employees, because it shows that management is aware and appreciates them.
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…
And if they stay, their morale and motivation may drop 10-20%
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 first stage of cutting should be management taking a cut. That's what I've always done (3 times in the last 20+ years). Then all employees. Then layoffs.
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…
Top earners at software companies should be heavily de-valued. Being so specialized as to be useless if that specialization ceased to be validated by economy policy of shoveling cheap money at tech companies to titillate the public is not so special. It’s intentional attempt at agency control.
I guess you can put "often" in front of any statement and be not wrong. But obviously letting go expensive workers is going to reduce costs.
> Layoffs often do not increase stock prices
They've pretty reliably bumped stock prices this past year, and by quite a lot. Not that I think this is what a CEO should be optimizing for, since short term price action is not that important, but since he brought it up...
> Layoffs do not increase productivity
They definitely increase productivity if they're targeted at the lowest performers --- unless you somehow think all employees are the same, which sounds like an MBA type of opinion to have
> Companies sometimes lay off people that they have just recruited
That doesn't seem to be the case with the recent tech layoffs (to the extent that I have knowledge). The folks I have seen laid off were not ones hired since 2020, rather those that have been around longer and should have been let go earlier.
> Layoffs kill people
* There's a long chain of events that lead to a layoff
* There are many people who are laid off and don't kill themselves
So how can you say that a layoff was THE cause that killed a person, rather than, say, a series of poor choices by politicians and public-sector economists, or the medical community failing to diagnose a chemical imbalance, etc etc. Is there an A/B test that shows that when a company doesn't do any layoffs and instead goes bankrupt and everyone loses their job that everyone stays happy and healthy?
> how economic insecurity is bad for people
Make recessions illegal! Stocks only go up!
Literally nothing this professor says is convincing. Tech workers and all people should take steps to become financially literate, plan ahead for an unexpected termination, maintain a broadly diversified investment portfolio, and take responsibility for their own mental health.
Earlier quoted context omitted.
Do we have any evidence that the over-hiring was a mistake? Could companies not have seen the free money and decided to beef up their staff for short term gains in their roadmap, with the knowledge and intention that they will likely be cutting later while getting to keep all that intellectual output? I don't see why we put this past them.
Tech work is now seasonal you say?
> 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.
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 believe simply a pay freeze would be equivalent to a 3% cut. That way people don't feel you are "taking away" salary they may have come to expect. That in addition to a hiring freeze might get the company close to the mark in a year's time. An annual pay freeze then can be re-evaluated again next year.