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Yes. They never are. A recent study investigated this and neither stock price nor productivity nor profitability improved. All mass layoffs do is crater employe

Yes. They never are. A recent study investigated this and neither stock price nor productivity nor profitability improved. All mass layoffs do is crater employee morale. And yes, it's a "others are jumping into the lake with their clothes on, let's get our brooks brothers shirts wet, too" thing without any rational cogitation involved..

phumberdroz 4y ago
Do you have a link to that study would like to share that with someone.
- rozim 4y ago
  This may lead you to it: https://news.stanford.edu/2022/12/05/explains-recent-tech-layoffs-worried/ https://news.stanford.edu/2022/12/05/explains-recent-tech-la...
im_down_w_otp 4y ago
What should a business do that has more people on payroll than their revenues can support?
- kdazzle 4y ago
  Hiring freeze, for one. Then anyone that leaves won’t be replaced and headcount will (presumably) go down trauma free.
  - coredog64 4y ago
    If everyone does a hiring freeze instead of layoffs, there’s no attrition other than the PIP kind. Ask an Amazonian what that does for morale.
- bombcar 4y ago
  I think the argument is that you shouldn't get into the position where mass layoffs are the solution, just like you shouldn't get into the position where gastric bypass surgery is your only option. Something like each team is maintaining themselves at a proper rate, laying off inside the team as necessary. But even then you will at times have to fire entire teams, but those aren't really a "mass layoff" so much as "we're not doing X anymore".
  - deleted 4y ago
    [deleted]
  - HeyLaughingBoy 4y ago
    Yeah, but reality bites. You're in the situation that you're in and you have to deal with what's in front of you.
- lesuorac 4y ago
  I mean if your company makes ~150M a quarter and has operating expenses of 217M and cost of revenues of 53M a 6% cut towards your operating expenses isn't going to get you anywhere close to profitable. https://investors.confluent.io/node/8031/html https://investors.confluent.io/node/8031/html
- munificent 4y ago
  Use those people to build products that increase revenues. Isn't that why they were hired in the first place?
giaour 4y ago
Layoffs may have second order cost saving effects (e.g., reducing competitive upward pressure on salaries, discouraging staff from asking for raises), but those seem impossible to measure
ajkjk 4y ago
That seems absurd. I've worked at big companies. They sometimes have staff, often _lots_ of staff, like whole orgs, that are a net drain on the company. What's the alternative in that situation? Granted, getting into that situation was probably "executives making stupid mistakes" -- seems like it usually is -- and granted, they're probably not saying "we have to do these layoffs because I was an idiot last year", and they're probably not taking commensurate pay cuts. But still. It can certainly and obviously be good for the company's health to have fewer people on its payroll.
- bonsaibilly 4y ago
  > That seems absurd. I've worked at big companies. They sometimes have staff, often _lots_ of staff, like whole orgs, that are a net drain on the company. What's the alternative in that situation? Well, the evidence is that mass layoffs aren't having the result of being very positive for companies that engage in them. Given that what you say also feels true, in my experience, an explanation immediately suggests itself: Big companies rarely if ever manage to mass lay off only unproductive staff, or net-drain internal orgs. Rather, they're almost always implemented as an across-board X% haircut for most departments with little targeting whatsoever. So in the end, they don't solve the problem you're identifying, and that's why the evidence says they end up doing nothing positive for the company.
  - snotrockets 4y ago
    I think its more complex than that: even if, by magic, you managed to lay off every non-contributing worker, and only them, the affect on employee morale is significant, and would cause contributing employees to leave completely or contribute less. Reducing the total output for the company. And I'd also suggest that very few, if at all, employees has zero contribution. It's just that some of those contributions are invisible to you.
  - ajkjk 4y ago
    I wonder if, despite not being a benefit, they avoid a worse outcome at the same time? perhaps the evidence can distinguish those, not sure. It seems like if "not a benefit" means "the stock or performance or profitability didn't go up"... well, I think stock prices are a very trailing indicator of the health the company, since executives are incentivized to pamper over anything bad about it. So the layoffs may reflect the fact that "things have been bad for a while" and thus the metrics staying flat would imply that they would have gone down if they _hadn't_ done it.

phumberdroz 4y ago

Do you have a link to that study would like to share that with someone.

rozim 4y ago
This may lead you to it: https://news.stanford.edu/2022/12/05/explains-recent-tech-layoffs-worried/ https://news.stanford.edu/2022/12/05/explains-recent-tech-la...

im_down_w_otp 4y ago

What should a business do that has more people on payroll than their revenues can support?

kdazzle 4y ago
Hiring freeze, for one. Then anyone that leaves won’t be replaced and headcount will (presumably) go down trauma free.
- coredog64 4y ago
  If everyone does a hiring freeze instead of layoffs, there’s no attrition other than the PIP kind. Ask an Amazonian what that does for morale.
bombcar 4y ago
I think the argument is that you shouldn't get into the position where mass layoffs are the solution, just like you shouldn't get into the position where gastric bypass surgery is your only option. Something like each team is maintaining themselves at a proper rate, laying off inside the team as necessary. But even then you will at times have to fire entire teams, but those aren't really a "mass layoff" so much as "we're not doing X anymore".
- deleted 4y ago
  [deleted]
- HeyLaughingBoy 4y ago
  Yeah, but reality bites. You're in the situation that you're in and you have to deal with what's in front of you.
lesuorac 4y ago
I mean if your company makes ~150M a quarter and has operating expenses of 217M and cost of revenues of 53M a 6% cut towards your operating expenses isn't going to get you anywhere close to profitable. https://investors.confluent.io/node/8031/html https://investors.confluent.io/node/8031/html
munificent 4y ago
Use those people to build products that increase revenues. Isn't that why they were hired in the first place?

giaour 4y ago

Layoffs may have second order cost saving effects (e.g., reducing competitive upward pressure on salaries, discouraging staff from asking for raises), but those seem impossible to measure

ajkjk 4y ago

That seems absurd. I've worked at big companies. They sometimes have staff, often _lots_ of staff, like whole orgs, that are a net drain on the company. What's the alternative in that situation? Granted, getting into that situation was probably "executives making stupid mistakes" -- seems like it usually is -- and granted, they're probably not saying "we have to do these layoffs because I was an idiot last year", and they're probably not taking commensurate pay cuts. But still. It can certainly and obviously be good for the company's health to have fewer people on its payroll.

bonsaibilly 4y ago
> That seems absurd. I've worked at big companies. They sometimes have staff, often _lots_ of staff, like whole orgs, that are a net drain on the company. What's the alternative in that situation? Well, the evidence is that mass layoffs aren't having the result of being very positive for companies that engage in them. Given that what you say also feels true, in my experience, an explanation immediately suggests itself: Big companies rarely if ever manage to mass lay off only unproductive staff, or net-drain internal orgs. Rather, they're almost always implemented as an across-board X% haircut for most departments with little targeting whatsoever. So in the end, they don't solve the problem you're identifying, and that's why the evidence says they end up doing nothing positive for the company.
- snotrockets 4y ago
  I think its more complex than that: even if, by magic, you managed to lay off every non-contributing worker, and only them, the affect on employee morale is significant, and would cause contributing employees to leave completely or contribute less. Reducing the total output for the company. And I'd also suggest that very few, if at all, employees has zero contribution. It's just that some of those contributions are invisible to you.
- ajkjk 4y ago
  I wonder if, despite not being a benefit, they avoid a worse outcome at the same time? perhaps the evidence can distinguish those, not sure. It seems like if "not a benefit" means "the stock or performance or profitability didn't go up"... well, I think stock prices are a very trailing indicator of the health the company, since executives are incentivized to pamper over anything bad about it. So the layoffs may reflect the fact that "things have been bad for a while" and thus the metrics staying flat would imply that they would have gone down if they _hadn't_ done it.