Lay-off or planned firing?
Lay-off or planned firing?
Tech layoffs surpass Great Recession levels, set to get worse in early 2023
But, why is the Tech industry laying-off people? Why the layoffs now are surpassing the Great Recession levels? Is it really a lay-off or well planned firing on the pretext of recession?
We will try to look at the recent lay-offs and try to understand what's forcing these companies to lay-off talent in these difficult times. Is it really lay-off or an orchestrated, well planned firing across the Tech?
We have compiled a list of companies who have declared job-cuts recently. The list is not complete but it lists all the major companies to give you an idea of volume.
- Coinbase
- Unacademy
- Microsoft
- BYJU'S
- Noom
- Clear
- Rupeek
- Meesho
- Better.Com
- Ford
- Walmart
- Robinhood
- Vedantu
- BlueStacks
- TikTok
- Netflix
- Tesla
- CityMall
- Cars24
- Klarna
- MFine
- Blinkit
- Trell
- Furlenco
- OkCredit
- Lido Learning
- Unilever
- DiDi
- Royal Mail
- Nestlé
- Tesco
- Cineplex
- Primark
- Conde Nast
- FIS
- Cognizant
- Meta
- FIS
I believe above list is enough to give you an idea about volume of impacted employees and their families.
I agree some of the companies in above list are going through a rough patch and some of them are already on their death bed (Did I mention twitter?). They are going to layoff all the employees eventually. I don't have any complaints against them. However, some are doing really great in these difficult times as well. But, they are also cutting the costs and preparing for recession.
I have been part of some of the above companies in my 20 years long corporate experience. I have seen closely how they work, how they think and how they react. I will try explaining the real thing using examples in this blog. I will use FIS as an example. However, don't think FIS is the real villain here.
I saw a post in my LinkedIn feed today. One of the fresher or trainee software engineer was laid-off by FIS today. She was asking for help from community to find her a new job real soon. This got me thinking, she is just a fresher with no immediate responsibilities to take care of. Not like some of us, who have, growing kids, Dependent ailing parents etc. How would have these lay-off impacted all of those?
Do these companies really think about that before declaring a lay-off? How do they plan this thing? Let's look at this.
So, FIS board has a meeting, and board expects a 5% growth this year compared to 30% growth last year. That means, company is not going to show positive profit growth this year to its shareholders.
Board decides to cut cost to maintain their profit growths. Board declares their mandate and ends the meeting. The decision is then cascaded to senior management. Senior management have their separate meeting and are given a target to reduce cost by, let's say, 10%. Senior management plans to reduce the salary burden by this much amount. Great, so that's how the lay-off is declared? But, wait, they wanted to reduce salary expenditure not cut the roles? Then why was a trainee software engineer in FIS was laid-off who was being paid just 20,000 INR ($241) monthly? If I was working in her team as her manager, I would have happily agreed to cut my salary by that much amount to save her job. Wasn't that the target? Management was supposed to reduce the cost not cut the roles. If FIS decides to layoff 10 people, instead of doing that, did they give an option to 100 people to accept a reduction of 5% to help reduce the cost? No? Was it a well planned firing then on the pretext of cost cutting?
Every year organisations fire people on the pretext of low performance. However, they cannot mass layoff people on the pretext of performance. Because then the question arises why were they hired? Who interviewed them? That's why they fire a small percentage every year by the way of performance appraisals. This is a slow and costly process. However, when they hear the word recession, they see an opportunity to get rid of this non-productive staff at once. Fast and cost efficient way.
But, are the laid-off employees really the non-productive ones?
Every employee has different qualities. Some are slow learners while some are already trained for the job. Some are demotivated and others are going through a rough patch in life. I am not saying that every laid-off staff has some problem. But, not all of them are that bad.
Let's assume you have 2 house helps working for you. One of them recently started to fall sick often and other is always available for you on time, in time. Now, you decide that you need to reduce the house help cost. Who would you fire or lay-off? The one who falls sick too-often? Now, let's assume one more scenario on top of this. The entire city decides to cut their house help cost at the same time you decided to cut the cost. Who will take care of that "falling sick too often" house help then? How would the society look in that scenario? Wouldn't it be better to share and care in that scene? Cut the costs not roles. Cut the expenses not lives. She was falling sick often doesn't mean she is non-productive.
This was just an example, don't think that falling sick often is the only criteria. However, you can now very well imagine how the decisions of lay-off are made. There are better ways to handle difficult times. However, companies always choose the better profitable ways for them. When I say companies, read it as bunch of suited professionals who have so large egos that they don't look anyone beneath them. They won't cut on their expenses. Instead of choosing to cut their costs, they choose to cut the hopes of just a fresh college graduate who joined their esteemed organisation with hopes to learn, work, help company grow and in the process make their and their families lives better.
Who hires these non-productive employees?
I was on the interview panel of FIS long back. We were running a weekend drive and interviewing many candidates for various openings that day. Some of the candidates were good, some were bad and some of them were exceptionally good. Exceptionally good ones were well trained for the job. They had knowledge, skills and desire to excel in their lives. I shortlisted them and cleared them for second round with my manager. End of the day, when we finally sat down with my manager to review list of hired candidates, I was surprised to see none of those exceptional candidates were hired. When I checked with my boss. His reply shocked me even more. He intentionally rejected those candidates as those would have either
- Not stayed for long. Because of their knowledge and skill somebody else would offer them better and they would leave.
- Posed a risk to his position. As client would have appreciated their knowledge. Eventually stealing the lime light.
Doesn't it mean he was trying to pick the non-productive employees for the company? He was intentionally creating an army of not so deserving candidates under him on the expense of company? Now, just assume when he hears a mandate from senior management to cut the cost by firing 10% of his staff what would be his criteria to pick people to fire? Wouldn't he fire the ones who are not in his good list first?
Companies hire non-productive members. Because the board appoints a CEO who has good relations with them. CEO appoints his executives who have good terms with him. These executives appoints his management team who have good relations with them..so on.
What does a senior project manager do?
My desk was beside a senior project manager at FIS. Year was 2012. Well, here is his schedule.
He used to report to work at sharp 9:30 AM.
- Till 10:00 AM he was filling his water bottle, getting some refreshments from the pantry.
- Till 12:00 PM he was sitting on different desks with different people chatting and discussing about various client meetings. This is what he used to call "wiring".
- Purpose of these chit chats was to ensure everybody speaks the same thing, which he wanted to speak, in client calls.
- Things like, XYZ is better than ABC. This is what I used to call influencing people to make biased decisions.
- He would then come back to his desk, take a 30 mins break from chit chat before heading for lunch.
- His lunch would last anywhere from 1 to 2 hours.
- After coming back from lunch he would again roam around to see if anyone is free.
- If there is an issue, someone would call for him, he would come to the person's desk.
- Hear the issue and instruct the person to keep him aware of the situation.
- If the situation is resolved, he would then send an email detailing the incident, cause, resolution and future plans. All based on the words of person who identified and resolved the issue.
- If the situation is not resolved, he would blame it on someone. Mark that man for next lay-off.
This is a very difficult job I must say. You are the most non-productive yet somehow most paid individual on the floor. you know nothing about the job, yet you have to somehow show that you are the show runner here. You know every moment that you are not needed here. Yet you have to somehow show to every one that without you everything will fall apart and you should be paid that high to ensure smooth operations.
It's time for these Tech giants to understand that they need to reduce management positions. They need technocrats working for them. They are tech companies not management companies. It's time to identify real non-productive ones. It's time to understand real meaning of cost cutting. It's time to improve before it's too late. Middle management, senior management can't make this happen. They are the reason of this mess. Its CEOs and other executives to look at. It's us, the employees, who can bring this change. Don't work for them. If you are capable, start something new for you, for the world. "Be the change".
Last Modified: Dec 18, 2022