Admittedly, I’ve been a little bit obsessed with the layoffs beginning in 2022 and burgeoning into 2023. What. Is. Going. On.
It seems to be cooling a bit, but who really ever knows.
In the year of our Lord 2023, layoffs have been dubbed a “necessary evil”, but… are they? I’m not super convinced. Let’s take a look at history and some current realities…
So, when did layoffs even become a thing?
Were layoffs always “a thing”? The short answer is, no. They definitely were not a thing in the modern world until roughly the 1970s.
“From the 1890s through the 1970s, mass layoffs were rare, perceived as “a sign of corporate failure and a violation of acceptable business behavior,” (Todd, 2019).
This seems logical. Maintaining business operations and personnel seems like the minimum requirement for a fully functioning company. The opposite would therefore represent a failure to understand basic business operations. (Admittedly, “profitability” and “enough” of it always makes things more tricky).
But we now find ourselves in the opposite world where layoffs are no longer viewed as “a violation of acceptable business behavior” (Todd, 2019). Instead of layoffs being seen as a failure, they’re seen as a “necessary evil”. Not only a necessary evil, but even an act done by the “savviest” of tech companies.
Before we go there, let’s get more history.
More layoff history
Throughout most of the 20th century, if employment was low in the private sector, the government would step up and create work as it was a widely held belief that the “government had a responsibility to ensure full employment,” (Todd, 2019).
But this markedly changed when deregulation took place in the name of more “competition” (uh… I think that may have backfired a bit, we’re seeing a handful+ of companies that own large swathes of the market, even if discreetly codified, and that is creating quite the problem (cough, adding to inflation).
This paved the way for more mergers and acquisitions, which then led the way to the L word: layoffs. Not just small, cutesy layoffs. But mass layoffs. Weakening labor unions didn’t help the average worker either (Todd, 2019).
Talk to anyone who has been in corporate America for a minute, and they will tell you first-hand they’ve witnessed, been directly impacted by, or were a driving force, of mass layoffs.
“Americans came to accept frequent, large-scale layoffs as the price they have to pay in a dynamic global economy,” (Todd, 2019).
And here we are…
Layoffs now have the opposite effect
We’ve seen dozens of examples that layoffs no longer have the effect on a business’s reputation of being negligent, inattentive, & unable to effectively budget.
Companies that execute mass layoffs are now seen as “fiscally responsible” and “doing what’s best”, if not even “savvy”.
Best for whom? We know the answer. Shareholders. And best for what? Company profitability (and not the type of profitability that invests in its workforce… we’ve seen that play out over the past year. Higher profitability does not mean higher wages).
Shareholders
What we are now seeing is: “The imbalance of shareholder supremacy. Taking care of our shareholders was always a thing, that’s not an issue but it wasn’t considered more important than the customer or the employee. We now live in a world where the shareholder is now considered more important than the customer and the employee,” (Simon Sinek).
The layout of mass layoffs is the company stock taking a momentary dip upon the layoff announcement (expected, still following the guideline of a “company violation” from the past), but now we see that companies are quickly rewarded with rising stock after the layoff took place.
This cadence was too easy for other companies not to follow.
“Just days after layoff announcements from Google parent Alphabet and online retailer Wayfair boosted the firms’ stock values,” etc., etc. (Ponciano, 2023).
The formula remained consistent among many tech companies:
- Mass layoff
- Stock dip
- Stock rise
*Note: Many of these companies are the ones that had record-breaking profits months before mass layoffs.
The people factor
Logically, one could understand the rationale behind layoffs. Especially how they’re rewarded in the stock market for doing so. Logically, it could be understood that some jobs have to be spared so that others can thrive. Logically, sure.
But honestly, from a human perspective, speaking from one person to another, it does not make sense at all.
The fact that a worker that has put in their time, energy, and ⅓ of their life at their job, could so flagrantly be let go, is unnerving.
As one former, laid-off, Google employee remarked: “It’s hard for me to believe that after 20 years at Google I unexpectedly find out about my last day via an email. What a slap in the face. I wish I could have said goodbye to everyone face to face” (Jeremy Joslin, 2023).
Resource to be exploited
In today’s environment of mass layoffs taking place in the name of being a “savvy tech company,” workers are just “a resource to be exploited” as one Google employee who saw many coworkers laid off put it.
“Workers are ultimately a resource to be exploited and can at any time be tossed aside for profit. Because we’re dependent on these jobs to support ourselves and our families, layoffs are simultaneously dehumanizing and deeply personal,” (Jenn Shreve, 2023).
Layoffs lack such utter acknowledgement to humanity
Mass layoffs signal, at its core, a lack of humanity. Someone will undoubtedly respond with the trite line, “it’s a business, what did you expect?” as if that means something. As if that means anything at all.
Especially in this era of mass layoffs being considered a “good business decision” and not a last resort.
Layoffs are “just business”… for the business
Regarding layoffs being “just business”… it’s “just business” for the BUSINESS. For employees, it’s their livelihood and life being impacted.
People spend 1/3 of their LIFE at work. So… it’s kind of a big deal. It may be more than “just business” for some…
“People before profits” – Where?
What happened to the tagline, “people before profits,” that was trending a few years ago?
It was likely tagged irrelevant by some group of board members in today’s world ruled by shareholders and so it slowly and quietly faded away. Companies took their silent cue and stopped promoting it, relieved they no longer had to keep up appearances.
Is it better for business?
Are mass layoffs really better for business? Does it achieve the end goal?
The results are mixed, “but as John Gapper observed in the Financial Times in the wake of the Deutsche Bank layoffs, “it is difficult to see how any business can achieve long-term success when there is evidently so little bond between it and its employees,” (Todd, 2019).
Companies that conducted mass layoffs, demonstrating such little regard for the people who worked for them, what will come of it? Profits? Potentially, at least in the near future after cutting some expenses (employees). Lasting profitability? Who knows.
Company loyalty tug-of-war
It’s relevant to note that there has been a tug-of-war among regarding loyalty between companies and employees over the past few years. Do mass layoffs have anything to do with it?
Recently, job-hopping has been a key strategy in getting a higher salary in the increasingly more expensive, inflated world. Mass layoffs could be perceived as a way to “get back” at employees who have let their loyalty wane.
Loyalty gap
But where did the loyalty gap begin? Or when? It sure wasn’t present pre-1970s.
Many parents preached to their kids to stay at one company for a lifetime and get a pretty pension in return. That’s no longer the case and in this age, companies largely axed loyalty when making mass layoffs a norm.
So who’s to blame? Let’s just agree (for now) that it’s a product of the environment.
Since mass layoffs have been a business norm for 5 decades now, it can only be expected that employees would be disenchanted with the courtship of their employer. And with wages stagnant in comparison to corporate profits, who can blame them?
Where does this leave us?
Maybe this era of mass layoffs will be some sort of “lesson” for everyone. One hopes that within hardship, or witnessing the hardship of others, insight can be gleaned from the situation.
The loyalty lesson
If we’ve learned one thing, it’s to be loyal to yourself (and not your company).
Companies will literally lock their employees OUT of their emails / office & send cryptic messages saying “thanks for your time… bye…”
Loyalty to your employer is not what it used to be.
Be loyal to yourself, whatever that means for you
Maybe it means speaking up more, maybe it means asking to be on a specific project, maybe it means looking for a job you enjoy, maybe it means leaving at 4pm instead of 6pm, maybe it means taking all your vacation days, maybe it means advocating for yourself, maybe it means not putting up with the corporate b.s.
Whatever it means for you, do that.
You never know when the tide will shift and a mass layoff wave will be part of your story. It almost seems inevitable…
Sources
*Article: “The short but destructive history of mass layoffs” (Quartz, 2019)
Author(s): Sarah Todd
*Article: Spotify, Alphabet And Meta Lead Tech Stock Surge After Massive Layoff Announcements (Forbes, 2023)
Author(s): Jonathan Ponciano
*Jenn Shreve, of Google, LinkedIn Post
*Jeremy Joslin, ex-Google, Social Media Post
*Simon Sinek, LinkedIn Post
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