Call for input on Lay offs as an excuse !!! Really????

We have all heard about the economy, the slow down, the massive layoffs expected and the of course the bailouts of large financial organizations failings, etc.

This weekend a brief comment was thrown over a shoulder of a pretty important person, saying that he thought much of the layoffs in Mass. were an excuse for some large companies to downsize and get rid of overhead, people and failing projects. Really an excuse??? My response, I could see 10% of employee population but how about the huge layoffs of over 40% that can't be an excuse, can it? Won't it hurt the company so much more if people think their money isn't safe, or if the company is failing....???? His answer: a smirk, and "not if everyone is in the same boat".

Why is this comment bothering me so much? The answer: Because people's livelihoods and wellbeings are at stake. If this is true its unethical, and unamerican. The impact is huge.

My question to you. How much of all that is going on in our industry is Truth vs. Fear? Slowdown vs. Disaster? I know we can't speak of our businesses and clients confidential information---but how have you individually been impacted? How has your business, recruiting, or clients been impacted? Are you seeing truth in the numbers of profit sheets relative to layoffs, and economic slow down?

Comment by pam claughton on December 9, 2008 at 4:55pm: Susan,
I think there is a bit of truth to what he said. I've heard that as well and have seen it done. Some VC's are advising their portfolio companies to do this as it is an opportunity to be viewed as fiscally conservative if you do the layoffs now when you can blame it on the economy...rather than doing the cuts during the good times when it would give the perception that business is off. Doing it now allow them to cut people who are not producing or working out as expected. It's not unusual to see companies that are laying off and strategically hiring at the same time. I don't think it's unethical, it's a business decision.

I think a lot of what is going on is driven by perception and the media so that the economy becomes a self-fulfilling prophecy. It's also cyclical, every 7-10 years the economy dips or dives and then climbs back up again.

Comment by Glenn Gutmacher on December 9, 2008 at 6:28pm: Good points, Sue: Some companies did it in an unwise way (e.g., an inside source told me Fidelity Investments ordered managers to lay off 10% of their teams, but instead of picking off the lowest performers, they axed the folks with middle-level performance ratings who would have qualified for bonuses so Fidelity could avoid paying the bonuses!). That policy could come back to haunt them. But as you said, many companies had to lay off far more than 10% and that obviously goes beyond deadwood. Some smart companies (even in hard-hit industries like retail) are using that as an opportunity to get great talent on the cheap. As Sande Foster, a veteran third-party recruiter, recently told me, other industries that aren't suffering layoffs (e.g., healthcare, medical devices, energy) need to realize that there are transferrable skillsets from these layoffs. They would be wise to look beyond the handful of target companies and hire some seasoned managers who will make a real difference in the long-term bottom line. As she said, hiring younger workers who may have the right type of industry experience but lack the depth will, when they come on board, waste a lot of time floundering and being relatively ineffective because there are no mentors to show them how to get things done.

Comment by Susan Hand on December 10, 2008 at 8:41am: Wow thanks for your insight! Thought provoking avenues....hmmmmmmmmm transferable skills. That is a concept lost on many hiring teams. That just might be my next article.