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Time Capsule: How the Layoff Grinch Stole Christmas: Clueless Management 101

October 19, 2012 Time Capsule No Comments

I wrote weekly editorials for a boutique industry newsletter for several years, anxious for both audience and income. I learned a lot about coming up with ideas for the weekly grind, trying to be simultaneously opinionated and entertaining in a few hundred words, and not sleeping much because I was working all the time. They’re fun to read as a look back at what was important then (and often still important now).

I wrote this piece in January 2008.

How the Layoff Grinch Stole Christmas: Clueless Management 101
By Mr. HIStalk


You had a pretty good holiday, I bet. Lots to eat, good company, and that slow, post-Christmas week to revitalize (even if you were “working” … wink).

Some industry folks didn’t enjoy it. They found lumps of coal in their stockings. Actually, it was pink slips, courtesy of Scrooges in suits who laid them off right before Christmas.

I’ve both given and received the “your position has unavoidably been eliminated” speech. Neither was enjoyable. Losing a job (and taking one from someone, for that matter) is shameful and energy-sapping. You head home in a nauseating haze, pitiful work belongings in the trunk, trying to find the right words to tell your significant other and maybe your kids and your parents. Imagine doing that right before Christmas. False cheer and optimism abounds, at least until the stark winter sun goes down early and the panic sets in all over again.

Companies hand-pick employees to march out, of course. The official excuse is that the outstanding managers have skillfully discovered duplication and cancellable projects, leaving nothing but good times ahead once the unfortunate smoke has cleared.

Here’s how it really works. Some manager’s budget or sales projection proves to be wildly inaccurate. Nobody can come up with anything better than payroll cuts. The suits draw up a list of employees who appear to be unproductive, whiny, or rebellious, using the chance to make up for previously unaddressed problems. Extra points are assigned if the victim doesn’t seem like the sort to argue, sue for discrimination, or return with armament (the worst part of being laid off is realizing that management put you in the same league as those losers who got axed with you.)

Only shareholders and competitors love layoffs. Great management and sound strategic planning seldom involves headcount-cutting your way to profitability. Before you know it, quality slips a notch, cheaper but less experienced workers are hired, and management hunkers down to desperately manage one quarter to the next.

I’d buy a toaster from a company like that. Maybe toothpaste. Probably not multi-million dollar enterprise software where the future value of support and R&D has been built into the large upfront cost.

How a company handles layoffs tells you a lot about its competence and humanity. To do it right:

  • Don’t use layoffs instead of setting and managing performance expectations.
  • Cut the use of contractors and consultants first.
  • Do it quickly, fairly, humanely, and not during November or December (duh).
  • Don’t hide on Mahogany Row before, during, or after.
  • Explain to the survivors how you’ll avoid doing it again.
  • Sacrifice management’s bonuses and perks since they’re the ones who failed.
  • If you have to lay people off more often than once every two years, lay yourself off and bring in better management.

For employees, layoffs are the new reality. We’re all contractors. Sometimes you get insurance and a badge with your name on it, but nobody’s getting the gold watch. So, think like a contractor:

  • Immediately start looking for another job if your company violates any of the rules above.
  • Keep your skills current, on your own time if necessary.
  • Keep up with the industry, make contacts, and market yourself to find the next gig.
  • Invest your money and try to develop secondary income stream so you aren’t one employer’s paycheck away from a financial crisis.
  • Don’t neglect any of the above to work massive hours thinking that your loyalty will be reciprocated.

I worked the bluest of blue collar jobs during summers in college (I wore a hard hat and a uniform with my name on the pocket). The militant union ran the show, but one of its bigwigs told me in confidence, “Workin’ man don’t need no union.” I’d like to update his wise words with this century’s version: “Workin’ man or woman don’t need no permanent employer.” Defer your gratification at your own risk … there are lots more coal-bearing Grinches out there, but lots of opportunities as well.

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