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

The options they have is to abandon positioning themselves as a growth stock and say "we are now an income stock". You are right, this is a valid choice.

But think a little about what this would mean for Google. This is a company that has one cash cow -- Search. Pretty much everything else is losing money. But only a small share of Google employees are actually needed to run search. So if they tell the market "We are no longer a growth stock", then why are they spending all this money on money losing projects? The rationale up until now was that these are moonshots where some of them would turn into the next big search. That's what a growth company does, but not what an income generating company does.

So my guess is that Google does not want to transition to being an income earning company because that would require laying off a lot more people. You can lay off 80% of Google's staff and just keep search, and then turn those profits over to investors. Google does not do that because it is still promising growth.

But I agree that at some point, the market isn't going to accept the growth story for Google, and this type of transition will happen. Google has also been sucking up a lot of first class talent and putting them to work on money losing projects without a lot to show for it. Those top developers really belong elsewhere, from an economic efficiency point of view -- they should be working on things that really are legit growth opportunities.

This is the fourth bout of "layoffitis" I've lived through in the tech industry, and I think this professor is really nailing it.

> Seems like it would also increase stress and encourage top performers to seek new opportunities.

You don't have to cut pay for key performers. You can offer retention incentives to key people. You can cut bad leaders and promote people (and give them a raise). Every time I've had to preside over layoffs (three times, all working for a big corporation), I got to ID my key people and offer them raises to stay on after the layoffs. The high performers that were laid off? They weren't the people that were the right ones to get the company through the hard times and the recovery. Often they were people that were great at their core job, but did not take on anything extra - and when everyone will have to take on extra, hearing "not in my job description" is, well, a big problem for the remaining team.

> hired during the 2000 recession

Ok, I'll let you in on a secret. When you see companies do layoffs, they are cutting costs, and big salaries are easy targets for cuts. The secret is that layoffs aren't permanent headcount cuts. Almost every time, the highest cost, non-essential people are cut, and then shortly after, people are promoted and the hiring starts anew, at a lower starting wage than before (I suspect in this economy, there's enough wage pressure that this will not work). I remember when I was in my 20s and 30s hearing older employees getting laid off who had 30 years of cost-of-living raises and made 2.5x what I did for the same job lament how it was ageism. Now that I'm 50, I see this as a sad truth: if you don't make yourself worth 2.5x someone 20 years younger, you aren't going to get paid 2.5x more forever.

> I suppose this works when it works, and then fails completely when it doesn’t.

You have to have an empathetic, "yes" to the question, "will customers continue to buy from US (over the competition) during a recession." If there's no way to grow, no way to win market share, then you really do have to batten down the hatches.

> this increases the risk profile on the company

This is especially true if you have to raise money to hire during a recession.

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A pedestrian is struck by a vehicle while crossing the road far away from a zebra crossing. Who is to blame?

There is a certain portion of people who will answer this question by saying: "Everyone but the pedestrian".

The driver of the vehicle is at fault for striking the pedestrian because he failed to react quickly enough. Or because he drove too fast.

The council is responsible for the accident as they failed to provide a designated crossing area where the pedestrian intended to cross.

The pedestrian was crossing the road to reach a coffee shop on the opposite side, thus it could be argued that the coffee shop owner's decision to open their establishment on the other side of the road, or away from a safe crossing point, may have contributed to the accident.

The education system is at fault for not providing the pedestrian with sufficient knowledge on when it is safe to cross the road, which may have led to the accident.

It could be argued that the accident is a result of societal values that prioritize vehicles over pedestrians, as it is evident in the lack of infrastructure that prioritizes the safety of those who walk.

"Everyone but the pedestrian".

I hate this kind of argumentation and this article is a great example of the kind of epistemiological overreach that social sciences are guilty of in the last years. Everything now is a hysterical overreaction. No. Layoffs don't kill people.

There's a third route: cut hours.

Everybody gets every other Friday off, and with that 10% reduction in hours, they get a 10% reduction in pay.

It doesn't solve everything, but reduces the feeling of unfairness because your per-hour rate stays the same. (Provided you cancel less-important projects, etc. so that people actually have less work, not just nominally.)

I think this approach is more common in cyclical industries like manufacturing. If you're probably going to need those people again, you want to keep them around. But if the goal is to reduce the company size, you could try combining it with attrition.