There’s little doubt that doing a great job, being liked by higher-ups, making money for the company and having in-demand skills may offer some protection from getting pink-slipped.
But even when you check all those boxes, there are no guarantees.
No matter how great your performance reviews, how popular or prominent you are, how innovative or loyal you’ve been, you, too, can be laid off. If you haven’t experienced this directly, you’ve probably seen it happen to excellent colleagues … again and again.
In just the first five weeks of this year, nearly 33,000 tech workers have been laid off, on top of the more than 260,000 let go last year, according to the site layoffs.fyi. News media companies have shed hundreds of employees in the past two months, including the Los Angeles Times, Wall Street Journal and Washington Post as well as the startup The Messenger. Employers in other industries have been announcing layoffs, too, with Wayfair and UPS among them.
So to help disabuse any hard-working, successful employees of the notion that they could have done something differently to avoid a layoff, consider the following:
A mass layoff is often a failure of management.
Maybe top executives backed an expensive venture that didn’t pan out. Or they were late in adapting to industry changes. Or they over-hired to seize on a new, but temporary, trend in the marketplace. The list of potential missteps is long.
And, especially at startups, which often depend on investor money rather than profit to survive, these kinds of judgment errors can lead to the shuttering of the business — no matter how hard everyone worked to make the enterprise a success.
Leaders often say they are choosing to “strategically realign” an organization’s priorities, to “restructure” or to “flatten the hierarchy.”
When that happens, many employees can be cut if their work doesn’t align with those new priorities and especially if certain functions are being replaced by technology such as artificial intelligence or automation.
“Sometimes it’s a broader company strategy and they will pivot away from a specific job function [or] product line,” said Andrew Challenger, senior vice president of outplacement firm Challenger, Gray & Christmas. “Structural stuff happens all the time that you have no control over.”
If your company is merging with another, leaders will want to “streamline” operations by reducing duplicate positions and cutting costs.
This kind of re-org can be especially tough on backroom operations — i.e., those that don’t produce revenue — like HR or marketing.
What makes a layoff all the more frustrating is that you probably won’t get a straight answer from anyone as to why you and not other people were let go, unless a company is shuttering one of its business lines wholesale or moving to a new state.
“You have no view as to what the impetus or drivers are. Is it the numbers of humans [they’re cutting]? Is it the dollars? Or is it that [your] segment of the business is risky?” said Chris Williams, a former vice president of human resources at Microsoft who is now a leadership consultant to C-suite executives.
And, without knowing the real driving factors, it makes no sense to wonder what you should have done differently. “Without knowing what is causing it, you couldn’t have protected yourself,” Williams said.
The opacity is partly due to the fact that deciding who to let go is a complicated calculus. Companies are trying to meet a given goal — such as slash 10% of the workforce or cut $1 billion from the bottom line — without, for instance, disproportionately cutting a protected class of employees such as people over 40.
If they try to rely strictly on just one or two objective metrics — such as tenure or compensation — it can backfire. For instance, say a company has made big strides in its diversity, equity and inclusion goals through hiring and promotion. In a mass layoff situation, if it relies on a last-hired-first-fired strategy targeting those with the least amount of tenure, “it may look like you’re taking out women and people of color,” Williams said.
Or if you’re just looking at income bands, you may inadvertently lay off too many older workers since their compensation is likely to be higher than that of younger colleagues.
Plus, in deciding who to cut and who to keep, leaders have to consider what the business will need after a mass layoff in terms of skills and other capacities.
All those considerations combined often mean the layoff list may be revised a few times before being finalized, as managers lower down the chain are asked for their input. (But don’t assume your direct manager was necessarily informed of much beforehand. Companies try to keep the number of people in the know about a pending mass layoff as small as possible for as long as possible, Williams noted.)
Never, of course, discount the possibility that your employer will make some serious miscalculations when deciding who to let go.
“Companies aren’t perfect at it,” Challenger said.
So the next time a leader sends a note announcing job cuts and warns some really great colleagues will be leaving, believe them.
If you survive the purge, there are steps you can take right away to protect yourself financially from a future layoff. They include familiarizing yourself with your employer’s severance policy to know what you may receive, and realistically assessing how much you will need to live on if you’re laid off and what resources are available to you other than severance payouts. (More about that here.)
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