Companies commonly use layoffs as an easy way to get rid of under-performing staff, realize cost savings from previous investments (e.g., automation) ahead of schedule, or efficiently reorganize divisions whose execs fall out of favor. Not going to say this is good, but a <10% layoff is not unreasonable for a healthy company, especially when some business units may be stagnating.
However callous it is, roles on the margin get cut when prospects for growth dim.
In this case, they make a disproportionate amount of their revenue on jobs postings and selling recruiters the right to spam us. With less jobs their revenue goes away. They don’t need as many salespeople and internal recruiters.
Microsoft has historically been pretty ruthless about annual culls. It used to be in the GE mode of cutting the bottom 5-10% each year. More recently it’s more quiet.
I don’t begrudge companies this. They need to move resources where they’re most needed.
GE under his successor Jeff Immelt was definitely a mess. Under Jack Welch the situation was much more subtle. Source -- a book "Lessons from the Titans: What Companies in the New Economy Can Learn from the Great Industrial Giants to Drive Sustainable Success" that was published a few days ago. I coincidentally read the chapters on GE yesterday, which was written by somebody with extensive personal experience with the CEO's of GE. https://www.amazon.com/Lessons-Titans-Companies-Industrial-S...
I’m not sure on fraud but certainly it wasn’t as great as the press. He definitely made a mistake going all-in on financial services going into the financial crisis.
GE’s breathtaking growth under Welch was fueled in large part by its transformation into a financial services superpower. By 2000, nearly half of the company’s revenue—$96 billion—came from GE Capital
GE’s exposure to finance proved to be an enormous vulnerability after the terrorist attacks of Sept. 11, 2001, and particularly during the financial crisis of 2008. While Welch’s successor, Jeff Immelt, tried to diminish GE’s reliance on finance, his efforts came too late.
While GE's successes under Welch are suspect at best in my opinion, I was more referring to the legacy of "stack ranking" under Welch's tenure.
I've read "At Any Cost: Jack Welch, General Electric, and the Pursuit of Profit" and I consider him a con man. Stack ranking was just a nice veener to justify layoffs whose primary motivation were to inflate the valuation of GE and increase its perceived profitability.
To be fair, Welch gave what the investors wanted, but he corrupted everything in pursuit of that. If the primary proof of stack ranking's "wisdom" was that GE's stock went up then that is a sad indictment of the state of business culture in the West.
Basically, Jack Welch was in the right place at the right time, probably (almost definitely) played semi-legal accounting games to beat analyst estimates (a practice which later led to accounting fraud charges [2]), and pretty much mortgaged the company's future in exchange for short-term boosts by selling off many of its business units and focusing on GE Capital, which basically got annihilated a few years after Jack left. So he was also a master of leaving other people holding the bag. Also, the man was apparently (according to many people who worked with him) a massive asshole with a huge ego problem and would epitomize every negative stereotype of white male executives if he were still alive today [3].
if youre referring to that hit piece that came out last year about long term care insurance, no. That was a bunch of crap. The guy who published it burned his reputation as the Madoff whistleblower to make some quick money.
I feel like there are basically three ways to lose your job in tech.
In one, the company cuts an entire business unit, or a company shuts down, or something else cataclysmic happens. This is where you have dozens/hundreds of people let go. Outside of small startups, this seems pretty rare. I think selling/divesting a failing business unit is more common than outright shutdown in tech.
In the second, the employee does something really egregious and gets straight-up terminated for cause (fired). Absenteeism, theft of company property, sexual harassment, something so bad it's borderline illegal and potentially a legal risk for the employer if they don't do something about it.
The third, which is what we're seeing here, is a general reduction in bloat done under the guise of "the economy". In my experience, great people don't tend to get let go in situations like this--it's political cover to remove the bottom 10%. Companies, at least in tech, don't make a routine practice of doing this without "a reason".
Being in the bottom 10% can happen for a lot of reasons. Maybe you just lost interest in the work. Perhaps you don't get along with your manager, or something's going on in your personal life, or the role was never a good fit in the first place. I used to think some people were just "bad", and some indeed are, but it also seems like peoples' performance really does change over their careers. Provided there's good unemployment insurance, probably best for both parties to part ways. Not only does it give the employee a kick in the pants, but it also improves the morale of the rest of the team, because it doesn't feel like someone isn't "pulling their weight".
The fourth is the market is drying up and your line of management isn’t going to bat for you. Lots of reasons for this and many aren’t personal so no need to personalize it. Many companies try to let underperforming employees go for cause before starting a lay-off because they can avoid the repercussions in unemployment taxes.
This hasn't been my experience, but would love more info if you could provide it.
I'm actually surprised how slowly most tech companies shed staff. In general, it seems the industry is pretty hit-driven, and if you're attached to a good product that's still making money, there's rarely much attrition, even when perhaps there should be. Conversely, a lot of great people get let go when a product isn't working (misses the market or no sales). It all seems kind of arbitrary and random. It's a lot different than, say, a restaurant with really tight margins where you're a day away from getting fired if you aren't perceived to be pulling your weight.
I realized I put two separate thoughts in the same paragraph. When someone is let go in a lay-off it’s often not personal and being a better person might not have saved your position. So it’s probably better not to see it as a personal failure.
Thought 2: if you’re getting let go for performance reasons in a bad time for the company, often they really don’t have performance gripes, but they don’t want to put up with unemployment or file a lay-off, so they let go people that can possibly be fired for performance.
Lucas Arts (the game arm of Lucas Film) has been doing this since the early 2000s. Allegedly, new management came from the film industry and could not comprehend why their game studios kept FTEs between projects. So they started laying off most of the staff at the end of a project to rehire them a few months later. After a couple of iterations they started canceling projects because they could not get enough staff (e.g. the PS3/360 Indiana Jones game could not start because of this, allegedly) and eventually had to shut down their game business all together despite being one of the bigger players at the turn of the century. I have not been working there but have quite a few acquaintances who did and all of them had been out by ~2007. I also had to turn down dozens of their recruiters during those times.
For a while when I was frustrated with coworkers I dreamed of joining a company that openly said they fired the bottom x%. I think Netflix had a presentation along those lines. I’m older and less into the idea now, but it might attract young confident people who care too much about their work, which is mostly what tech companies want.
I don’t know of many industry veterans who look lovingly over that fence. My impression is that they use an “overwork the eager graduate” style of hiring, like many in the top ten tech companies do.
Meanwhile the careerists at Microsoft seem pretty happy, fwiw. My closest friend there seems content to work there for the rest of his life and he seems to be producing good quality work, even if they are pushing him into management.
Depends on the industry. Happens often enough in cyclical industries like retail, consulting and financial services. It’s more shocking when old-line stable companies lay off for the first time. One of the lessons from IBM and HP is the first cut is rarely the last.
Apparently "decimate" is having a moment on HackerNews lately. It came up over the weekend as well [1], with the same disagreement between people on what it actually means.
There shouldn't be a debate at all since both sides are technically correct. Here's the definition from Google:
> dec·i·mate
/ˈdesəˌmāt/
verb
1.
kill, destroy, or remove a large percentage or part of.
"the project would decimate the fragile wetland wilderness"
2.
HISTORICAL
kill one in every ten of (a group of soldiers or others) as a
punishment for the whole group.
There are many words and phrases that have changed in meaning over time through popular (mis)use.
I believe the shift in meaning came about because decimation was an incredibly brutal punishment -- it was the most severe sanction that a general could impose.
What is often overlooked is not just that it was "one in ten" executed, but that they were executed by being clubbed to death by the other nine men who were not chosen to die.
So "decimation" spread from the literal procedure to "worst outcome imaginable". Much as "literal" no longer means literal.
To be clear, "literally" still means the original definition, but now there is an additional colloquial definition which can be used as the opposite of the original meaning[1].
Diezmo (Spanish) and Dizmo (Portuguese) also mean "tithe", an obligatory offering of a tenth of income to churches or religious or charitable organizations. (Growing up in South America in a religious family, I heard both these words a lot.)
> Every tenth man in a group was executed by members of his cohort
That is a 10% reduction. Killing nine out of ten would be a 90% reduction but 'in the classical sense' it would also mean that the lucky guy would have to kill the 9 remaining people.
>Decimation (Latin: decimatio; decem = "ten") was a form of Roman military discipline in which every tenth man in a group was executed by members of his cohort. [...] The word decimation is derived from Latin meaning "removal of a tenth".[
I've heard from people who worked there at the time that as part of the stack ranking system, it contributed to a culture of mediocrity and stagnation. The high performers did not want to excel in fear of retaliation from teammates that this was putting at risk, and no one wanted to be at the bottom. So the result was that everyone tried to be mediocre, do exactly as told, not more and not less. I would never want to work in such a culture.
Our company (not Microsoft, but a bit larger) used this model for over 15 years; it worked better than the replacement model, where people only get fired when they are really bad, so really weak people accumulate and re-baseline the competency in the company. On top of that, the new model based on diversity removed almost completely competency from promotions, so it is very easy to stay at the top of the peer group due to lack of competitors.
There could be a model where you just define what "bad" is in concrete terms and fire people who are not up to a relatively high standard; yet you aren't required to fire the the "bottom people" if they are good enough. I believe this is what FAANGs are doing.
I agree that this is pretty normal for any company, though I do wish that there was a bit better balance of risk and reward between the employee and the employer. For instance, if an employer that laid off an employee for anything other than an ethical violation were required to pay out one month of income for every year the employee worked for the company, it would force them to weigh the costs and benefits a bit more.
This is the kind of situation where it would be good to have a union. In the tech industry, it might have to be a different kind of union than exists elsewhere (for instance, I think most of us wouldn't want to do technical work in an environment where people who aren't good at their job can only be fired in reverse order of seniority).
The way I see it, people aren't entitled to good jobs for life from private companies, but neither are companies entitled to a cheap and disposable workforce. There's probably some place we could meet in the middle that has stronger protections for workers than are currently in place in the U.S. (I don't know enough about what protections exist in other countries to comment.)
Forcing managers to wait until layoffs to get rid of underperforming (and possibly toxic/counterproductive) staff is terrible for the morale of the rest of the team and I wish it wasn't the norm. Better to fire people and just give them the severance package than to drag it out while nobody's happy and then do it anyway.
My first reaction to the headline was mild shock that 960 people even worked for LinkedIn. What do 10,000 do at Linked? Netflix has 8,600 and Twitter has less than 5,000 for comparison
Almost. 10% are put into a "Dev List" which starts with some coaching on how they should improve. It then likely leads to a "Pivot" where the employee is given the option to take a 3 month pay severance, or go on a Performance Improvement Plan (PIP) (likely biased against the employee, as manager and manager's manager have already put a lot of work into getting here and have made up their mind). Failing the PIP, they are likely going to be terminated soon and only get 1 month severance. So, they start with 10% but they target about 6-8% actually getting terminated.
Many of the places where I worked if they PIP'd you start looking. They already made up their minds. If they get a 'get rid of X% of people' you will be in that list.
No, never heard of this systematic approach while I was there (AWS, 2008-2014), although the turnaround effect might have been somewhat close to that number just coincidentally.
I assume they meant “turnover”. Amazon is notorious for burning through employees quickly.
And if employees quit voluntarily, the company doesn’t need to pay severance, may reclaim hiring bonus or RSU’s, and it helps them politically/reputationally in aggregate (by being able to claim low lay-off numbers). Of course then you might wind up with those other than your worst performers leaving, so it’s not great in the long term.
The issue not being talked about is the removal of the recruiter from remote roles. Those recruiters paid linkedin thousands a year for premium access.
As a counterpoint to your post, I was recently hired by a 3000 person company who paid an external recruiter to post a job on LinkedIn and do the initial screening of me, which was extremely light.
8 rounds of interviewing with the company virtually later, I was hired. The interviews involved a mix of live coding, system design, and general questions about commonly used programming languages and frameworks.
I personally feel like the recruitment firm was beneficial to the process in getting my foot in the door and accelerating everything. I've seen many people have much worse experiences, but mostly from companies that aren't serious about hiring.
I’ve worked with good recruiters. They do a ton of work at the beginning of the hiring funnel.
If you got an onsite interview, you probably didn’t even notice the first few filters that the recruiter applied to you. Those early filters eliminate at least 90% of applicants.
Testing platforms charge the company tens of dollars per test, so it makes a lot of sense to have a person double check that the resume is relevant rather than sending tests automatically.
What do you mean? The only remote job I have had used a typical recruiter from the company side. I am sure he had a premium subscription. I didn't use a recruiter from my side as I knew someone that worked there.
However callous it is, roles on the margin get cut when prospects for growth dim.