> Do one layoff, but much much deeper than seems correct.
Is this what "leadership" is all about: just transfer all the pain you're having onto the employees who have been doing all the hard work to build your vanity company?
I'm not familiar with the author, but doing one layoff seems much kinder to everyone than multiple over time. And the company not surviving doesn't help anyone.
Being laid off is horrible, but if I'm one of the lucky ones that remain, I'd much rather know that the company is now sound financially (which the author pointed out).
I agree with you but here's the counterpoint: if you were on the bubble and the CEO decided to cut into the bone and perhaps you didn't need to be let go, how would you feel?
> if you were on the bubble and the CEO decided to cut into the bone and perhaps you didn't need to be let go, how would you feel?
Your question has the same problem as the modified (blocking the rail with a person) trolly problem. It's a hypothetical so you get to state what's true. In the real world, people have much more limited knowledge.
You get to know whether you're cut or not. You get to know whether another cut was needed or not. You get to know whether the company survived or not.
No one ever gets to know if someone was cut but didn't need to be. Not even in retrospect. Especially if they're "on the bubble".
No real problem that happened this week. Business had precipitous revenue decrease. Could get better, could not. Had to cut employees. Do you cut 35% or 40% of corporate?
Do you cut more just to hedge the economy won't recover? I appreciate the philosophy 101 lesson but your premise is completely not true. If you cut the Sr. Manager of XYZ and hire another one 120 days later...you probably didn't need to cut the one you did.
> If you cut the Sr. Manager of XYZ and hire another one 120 days later...you probably didn't need to cut the one you did.
If you make cuts based on a pessimistic projection and the future turns out to be much rosier than you thought, were you wrong? I don't think so. You just had limited knowledge.
This is compounded by an unusually wide spread between pessimistic and optimistic projections during times like this. Will someone find a cure? Will enough ventilators be made? How soon will people be allowed to go back to work? How effective will self-isolation be?
Today, no one knows the answer to these questions. We'll know much, much more in 4 months.
It's just not reasonable to expect that decisions made today will seem perfect 120 days in the future.
You err on the side of cutting "too much", because a. as the original author suggested, you want to cut once and b. because the downside of cutting "too much" is better than the downside of cutting too little. For everyone.
That would be terrible. I'm definitely presuming that the author definitely needed to make the cuts. If that's not the case, and I got laid off, I'd be pissed.
Running a small company is about keeping that company alive long enough to capitalize on its opportunities for success.
I don't know why you called his company a vanity company, but don't see that you have grounds for that.
If a company cannot sustain itself on revenue alone, and if fundraising is going to be difficult, it is absolutely the right choice (and kindest to everyone in the long run) to lay off those not critical to its survival. That does not mean that the choice is easy.
In 2008 I was employed at a company which did technical support for petrol stations. Initially we didn't feel the hit, but a year later our line manager called a meeting and said that during the previous month not a single new petrol station from the companies we serviced had been opened and therefore the company hadn't had any money from its largest source of revenue, so they had to lay off 80% of the non-permanent staff(which included me).
They went bust after a few years, but it was still a better alternative than closing down immediately.
Have you ever been at a company with multiple rounds of layoffs that affected your division? I have, and Rip the Bandaid Off is absolutely the correct strategy.
With multiple rounds everyone starts to develop neuroses. Productivity tanks, people have conversations about when the next round will be, whether they will be in it, whether essential team member that management doesn't care for will be next, and what sort of a clusterfuck you'll have to deal with when they aren't keeping the wheels on?
Plus by the second or third round, you're probably getting zero severance at all.
After this experience I had a theory that I wanted to be in the first round of layoffs (especially if the company looked like they would do multiples). I got to test that a few years back and it was awesome. None of those people's problems were my problems anymore. No survivor's guilt, no deathmarch. I sat around on my butt for two weeks doing absolutely nothing, and still had severance money left over when my first check cleared at the new job.
If you are the only company doing layoffs, your employees will be fine. If lots of people are doing layoffs, what is more humane? Laying them off before the market is saturated with people, or waiting until the last possible moment when their prospects are at the absolute minimum?
ANd those employees were compensated for the work they did. As long as their final paychecks cleared than the agreement was filled in full. It's filled in full in most every case of employee termination.
Your employer owes you what you earned. You owe your employer what you have agreed to provide in exchange for payment.
Expecting anything above and beyond that...well THAT is "vanity."
I feel fortunate to work at a company that hasn't had any debt since the 80s and keeps a good stockpile of funds. Consequently they didn't have to lay off anyone in 2008 and even the current crisis didn't delay our plans to build an addition to the office.
There’s a lot of survivorship bias to stories like this — and a lot of unobservable opportunity costs. Could the company have grown faster if it had invested its resources to the max and leaned on external funding? Could it have become king ape in a related winner takes it all market?
Is this what "leadership" is all about: just transfer all the pain you're having onto the employees who have been doing all the hard work to build your vanity company?