Layoff Culture: Defeating the cycle of endless layoffs

Layoff Culture: Defeating the cycle of endless layoffs

It’s a slaughterhouse in FAANG. Meta’s going through yet another round of layoffs — and escalating tension has Amazon workers edgy. If the last few decades saw trust between employer and employee wane, post-covid layoffs obliterated it.

But it’s not the end of everything.

I’ve been lucky enough that layoffs haven’t impacted me the way they have impacted my peers. And it’s not because I’m particularly smart, brave, or skilled. It’s because I grew up in poverty. I always ensure that I have my bases covered, perhaps to a startling and unnerving degree.

I may be burning my telomere strands at both ends, but I have excellent chances of survival.

Today, we’re going to learn about layoffs. A lot. We will discuss why they happen, their true result — and how you can avoid letting a layoff devastate your life.

Surviving layoff culture isn’t about the relationship you have with your company. It’s about the relationship you have with yourself.

Everything you know about layoffs is a lie

Ask a corporate executive, and they’ll tell you that layoffs are necessary. They are right-sizing. They are part of the organization’s lean operations. The organization is heading into its lucky girl era, and you aren’t a part of it.

But here’s the truth:

• Layoffs are an easy way for executives to compensate for mistakes they stumbled into and decisions they intentionally made
• Layoffs are very rarely unavoidable and are frequently part of the organization’s overall strategy
• Layoffs are ultimately harmful to the stability of both an organization and the broader economy

Let’s think of an organization like a human body — it certainly has all the legal rights of one (perhaps more). And let’s think of “growing insolvency due to a sequence of bad business decisions made by the executive suite” as an illness, such as a cold or flu.

Layoffs, like antibiotics, used to be a big red button seldom pushed. Unless a company had to engage in layoffs, it would simply freeze hiring. Over time, employees would bleed out of the system through attrition or performance, and everything would equalize.

But we live in an on-demand, medical-app, same-day shipping world. Now, we can get antibiotics at any time. Antibiotics — and layoffs — are now perceived as an easy big red button. Wipe everything out and continue with business as usual.

But there’s a problem…

The organization as a human ecosystem

I shouldn’t have to tell you this: You shouldn’t take antibiotics every time you get the sniffles. There are three major problems with dosing yourself with antibiotics every time you get sick:

• Antibiotics don’t fix everything
• Antibiotics harm the overall ecosystem
• Antibiotics wipe out everything, good and bad

And these are the same issues with layoffs. When considering the organization as an organism, layoffs are a band-aid to a more significant problem.

Layoffs don’t fix everything

When you’re sick, it could be a bacterial infection, which could be fixed by antibiotics. But it could also be a virus.

General economic strife, such as industry problems and supply chain issues, can sometimes be resolved by layoffs.

But incompetent management and fundamentally deranged corporate policies are like a virus. They cannot be resolved by layoffs and will continue to destroy the organization.

Layoffs harm the overall ecosystem

Using antibiotics constantly creates abundance throughout our environment, much like using layoffs entirely has thrown the entire tech industry into chaos.

Many of us remember a time when layoffs were catastrophic. A layoff indicated that the world was on fire. That a given industry was collapsing. Increased reliance on layoffs only heightens this tension — even in companies that weren’t struggling.

We are now moving toward an unhealthy ecosystem rife with churn. Systems and processes that we could rely on are falling apart — because there is no one there to support them. In short, we are cascading toward a failure state.

And we’ve broken what little remained of the contract between corporation and community, creating an antagonistic relationship between the two.

It’s not personal — really
65% of HR professionals approach layoffs by simply axing the last employees hired. (CNBC, 2023)

Layoffs wipe out everything, good and bad

Companies love layoffs because they don’t discriminate. An organization can terminate a pool of people without putting them on a PIP or increasing their vulnerability to a lawsuit.

Much like antibiotics, however, layoffs eliminate both what is harmful and what is helpful.

If you ask how a layoff is conducted, you’ll get three answers:

• Last in, first out (LIFO): Individuals hired last are laid off first.
• Performance reviews: Individuals with the lowest performance reviews are laid off.
• Forced rankings: Individuals with the lowest rankings are laid off.

But the reality is nearly every organization lays off based on LIFO or a fourth option:

• Non-revenue generating roles: Individuals with non-billable hours are laid off.

Organizations don’t like to use performance reviews for layoffs because having an opinion opens them up to potential liability. And only the most brutal of tech companies (and sales departments) still used forced rankings.

So, while there are many options for conducting layoffs, 65% of HR professionals approach layoffs by simply axing the last employees hired.

Of course, the problem with this is manifold:

• When a company struggles, it hires roles that it needs to recover. Under LIFO, anyone hired to fix organizational problems will likely be let go first.
• Today, it’s more likely that recent employees have been hired to fill a talent gap — because technology and business are changing swiftly. Under LIFO, these essential gaps can’t be reliably filled.
• For employees, it’s easy to get locked into a cycle of perpetual layoffs. If you’re always the last person hired, you’re always the first laid off.

Certainly, most organizations will say that more thought is put into their layoffs than this. For the most part, they are lying — layoff decisions are made at such a high level of the corporate infrastructure that there’s simply no way for them to consider all the consequences.

An industry of churn
In 2022, more workers were laid off in the tech industry than in the prior two years combined. (NerdWallet, 2023)

The era of “loud layoffs”

But are layoffs more frequent — or are they more publicized? Some argue that layoffs are historically low, at around 1% monthly. Unfortunately, they’re hitting some sectors more than others.

Moving into 2023, we can see that the hardest-hit sectors were:

• Construction (3.7%)
• Professional Services (1.9%)
• Leisure and Hospitality (1.5%)
• Arts, Entertainment, and Recreation (3.4%)

Let's look at the unemployment rates on Statista. We see similar information: Leisure and Hospitality, Agriculture, Construction, Professional and Business Services, and Transportation and Utilities were impacted above the average of 3.6%.

The reality is that tech layoffs are happening with a startling frequency: in 2022, more workers were laid off in the tech industry than in the prior two years combined.

Planning for the apocalypse
On average, it takes about five months to find a job. (BLS.gov, 2023)

Becoming layoff-resistant individuals

As we become enmeshed in this new layoff culture, it’s become a necessity for individuals to protect themselves. The unspoken trust between the company and the employee has been broken.

Companies have proven that they see their employees as expendable. And individuals need to protect themselves first.

It’s not enough to work hard and to be innovative. Most layoffs don’t consider performance — they don’t consider the person at all.

And it’s not enough to improve company metrics; a single employee cannot turn the tide of corporate apathy and greed alone.

To protect yourself from layoffs, you need to:

• Keep your own house in order
• Constantly improve your skillset
• Always have other options

Surviving layoff culture isn’t about the relationship you have with your company. It’s about the relationship you have with yourself.

Keep your own house in order

Have an emergency fund. Manage your budget assuming you make 80% of your total income — because you could spend at least part of the year unemployed. On average, a jobseeker takes five months to find another job. Assume you will likely get laid off once every couple of years, and the situation becomes dire.

This isn’t about moralism. Even if the avocado toast kept us from purchasing homes, that wouldn’t be a moral issue — people deserve avocado toast and, sometimes, even coffee they didn’t make themselves. This is about a war that many of us are losing.

• Demand the salary you deserve
• Don’t inflate your lifestyle
• Build an emergency fund

Constantly improve your skillset

Work to expand your capabilities — not for your current employer, but your future employer. Leverage your existing company to do what you want to do and get experience in what you would want to learn.

They use you for your skills and expertise — use them to develop them. This will make you far more agile within the market. Importantly, move in the direction you want to move— not the direction they want you to move.

• Take advantage of training and certifications
• Broaden your skillset into other areas of interest
• Deepen your skillset in your core competencies

Always have other options

Employers are constantly posting ghost positions — positions that don’t even exist. They do it because they want to keep their options open and because they want to look like they’re hiring.

Likewise, employees should also be constantly looking for their next role. Don’t do it to the detriment of your lifestyle or your work performance, but do it: See what’s out there. Respond to listings. Don’t wait until you’re let go.

• Set up job alerts for positions that interest you
• Make it a habit to apply to jobs that match your qualifications
• Interview at least once every month to keep those skills sharp

Trust and the economy

The employer-employee relationship is brutally one-sided. An employee is expected to spend eight, perhaps even more, hours of their day working toward the organization's success.

Meanwhile, most companies don’t give a second thought to the health of their employees beyond the Health & Wellness programs that will keep them from increasing insurance rates.

Trust has been broken. It’s up to us to protect ourselves.

Still, layoffs are only another example of a broader epidemic that we must counter: the increasing dissolution of worker power across the country.

Consider these employee rights in other countries:

• In the UK, employees cannot be fired without cause after two years of employment.
• In Norway, parents get 12 months of paid leave after having a child.
• In Denmark, required working hours are limited to 37 hours a week.
• In New Zealand, employees must get four weeks of paid holiday annually.

In most of America, we can be laid off and fired for any reason. While a handful of states have greater worker protections, they still don’t measure up to our peers across the globe. This is a problem — and it’s a problem we need to work together to solve before we lose our economic momentum across a global scale.