Layoffs are becoming all too common today; Some 300 companies have laid off over 100,000 employees in 2023 alone – and those are just the ones that made the news. Tech companies make the headlines, but they aren’t alone, with diverse industries such as Boeing aerospace and Aetnahealth joining in, for example.
Layoffs are often seen as a necessary measure to stay afloat during difficult times. Yeah well, this ain’t that. The top 5 layoff culprits are responsible for over half of that 100K total, and they are universally using a doom and gloom “recession” forecast as their prospective-looking rationale for these deep cuts in people.
Kinda bullshit, though. Just those 5 companies account for well over a trillion in annual revenue, a 15% increase year over year. Earnings for those guys approach 300B, and reflect a near-20% y over y gain.
Yeah, Kevin, but their’s a recession coming!
Maybe there is, maybe there isn’t. Maybe we’ve been in one, maybe we haven’t. Maybe it’s just cover for bad leader behavior. For example: those same top 5 I’ve mentioned are ALL—ALL 5 – forecasting growth in 2023, from 5% to upwards of 12%.
I gotta say, if they’re using recession, they’re doing it wrong.
Further, if each of these companies can cut 10,000 employees, saving several billions in administrative and operating costs ANNUALLY, what they hell have they been doing before today? If their business model continues to grow the enterprise at breakneck speeds after a 10% people cut, what does that say about the leader effectiveness to date?
Inquiring minds…
Anywhoo, layoffs should never be a starting point; save those for bad times, requiring the hardest of decisions. From a leadership perspective, regardless of impetus, layoffs represent poor leadership for several reasons.
Firstly, layoffs indicate a failure of planning and foresight. If layoffs seem unavoidable and necessary, it means that the leaders failed to adequately plan and were unable to find workable solutions to maintain the workforce.
Second, layoffs universally have a negative impact on employee morale and trust. This leads to a decrease in employee engagement, motivation, job satisfaction, and most importantly, discretionary effort. Hard to set the world on fire while keeping your head down avoiding eye contact. Quiet quitting sound familiar? It’s a culture killer.
Lastly, layoffs can screw up the company's reputation. The negative publicity and decline in customer trust can be difficult to recover from, and can make future recruitment even harder – especially for A-players
Except for exceptional circumstances, unplanned layoffs generally represent poor leadership because of a failure in planning, the negative impact on morale and trust, and can be brutal to a the company's reputation.
Explore alternative solutions and a more strategic approach before this nuclear option. May require some out-of-box thinking, but it’s worth it.
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Don’t forget to be brazen, and that grace and accountability can coexist.
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