this post was submitted on 14 Jan 2024
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That's a management problem. Managers should be getting poor performers up to speed (or firing them). Dealing with it through layoffs juices the stock and makes investors think the company is LeAn
I think thats a (shocker) overly simplistic approach to the dynamic. Layoffs are never a good look - and we’ve had an unprecedented boom time in tech for the last 20 years.
Companies were hiring just so competitors couldn’t. That doesn’t really happen anymore outside of AI.
We had what felt like make-work jobs, some nice guy or gal that no one wanted to fire who was “involved” but literally not responsible for anything.
Broad layoffs in the industry gave everyone cover to make unpopular decisions because everyone is doing it.
I don’t think - at least the ones I saw directly - it was the wrong choice.
Everything you described is still mismanagement.
Layoffs are considered a good look by big shareholders, though. Most of the time when the layoffs hit, the stock price goes up. Just look at Unity for a recent example. (I'm convinced they don't think it's good for the company and they just like seeing people suffer but i have no evidence for that.)
Layoffs aren’t a good look for a lot of shareholders unless the org is bloated. There are a variety of metrics to compare companies against each other in terms of head count efficiency.
Company values are basically just a view of future revenues minus expenses plus/minus sentiment. If you lower the company expenses, all else being equal, the share price should go up. Those shares are worth more.
But it also might say we’re not growing as fast as we thought we would or our business is challenged in other ways which will negatively affect sentiment.
Shareholders don’t like layoffs. They would much prefer you a) hired the right people the first time, b) hired the right number of people, or failing that c) grew into the number of people that you hired.
No one loves a declining business, and many businesses doing layoffs are - either outright declining or declining growth.
I agree with you but boy, here in America, employees are disposable assets, not potentially highly useful and reliable experts worth any kind of actually useful investment in or training.
I know. And that's not how it should be. I've had the privilege/luck of working in orgs where my management actually gave a shit and tried to do the best by their employees. If someone is struggling we do our best to get them back to performing or find them a position that works. I don't think we've ever had to fire anyone.
Cutting an arbitrary 10% of people (or a few underperforming products) is absolute bullshit. It's unfair to the employees because it doesn't give them a chance to improve, and it's unfair to customers because stuff they rely on disappears.
Sooo... good strategy then, if you're a capitalist sociopath...