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I understand it's a management decision, but I'm curious as to why companies don't really start with "hey, we need to lay off 11%. Who here would like to volunt

I understand it's a management decision, but I'm curious as to why companies don't really start with "hey, we need to lay off 11%. Who here would like to volunteer. Here are the perks we are going to offer" See how many that gets you. Then again, that might get you more than 11% if you aren't careful.

lacker 6y ago
That way you lose the people who have the best prospects elsewhere, often your top employees. This way you can pick which 11% you least want to keep.
- capableweb 6y ago
  More than losing the people who have the best prospects, you lose the ones that feels the least connected to the company. Even if you have many other prospects, if you still feel strongly for the company you work, you'll probably stay. The ones that leaves if you ask them to, wouldn't have stayed for very long anyway.
- mprovost 6y ago
  Yup this is known as the Dead Sea Effect [0]. Your best people leave and you're left with the worst performers. Do this a few times and you end up with a barely functioning organisation. [0] http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-dead-sea-effect/ http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-d...
jiveturkey 6y ago
more importantly, it won't get you the precise 11% you want to get rid of.
frivoal 6y ago
This would encourage the people who have the most options to leave, and those with the least to stay. This isn't necessarily the same, but is likely to be very similar to encouraging your best employees to leave, the worst ones to stay.
Smilliam 6y ago
The issue with this approach is that the company then leaves itself vulnerable to a big brain drain. If the bulk of those volunteers end up being your best seniors/leads who know they can just go down the street and pick up another job at comparable comp all while getting a cozy three month vacation that you're bankrolling...well, it's easy to see how you could be left in a much worse position imo.
- Simulacra 6y ago
  The high performers, the people who make money for the company, are rarely the first to be let go.
  - Smilliam 6y ago
    Correct, which is why it's not ideal to allow folks to volunteer for severance as the GP suggested. The company wants to choose who to let go to avoid putting themselves in a worse spot afterwards.
  - obstacle1 6y ago
    The point is they might be the first ones to voluntarily leave.
  - mike_ivanov 6y ago
    Wrong. People with the highest salary are usually the first to be let go, regardless of their status or contribution. update: you think rationally, looking from the "greater good" perspective. Decisions are never made like that in reality. The way it happens is the board says "we need to cut expenses by X% or else", and that becomes your new "rational" -- or you lose your CEO job. Nobody cares about long term consequences in situations like that.
jedberg 6y ago
Usually they don't want any 11%, they want a specific 11% (or whatever) because they are cutting specific programs. For example, when I was part of a layoff in 2001, the company mostly let go of engineers and IT (and kept all the sales and marketing), but it wasn't just any engineers, it was the engineers working on a specific product that was being cut. Also, for IT, my boss came to the three of us and said, "I have to cut one of you, but you're all equally good, so you guys can decide amongst yourself if you want". So at least down at the lower level they did as you suggest.
X6S1x6Okd1st 6y ago
When COVID hit the company I was at previously gave opened a company wide offer some months of severance + playing for COBRA.

lacker 6y ago

That way you lose the people who have the best prospects elsewhere, often your top employees. This way you can pick which 11% you least want to keep.

capableweb 6y ago
More than losing the people who have the best prospects, you lose the ones that feels the least connected to the company. Even if you have many other prospects, if you still feel strongly for the company you work, you'll probably stay. The ones that leaves if you ask them to, wouldn't have stayed for very long anyway.
mprovost 6y ago
Yup this is known as the Dead Sea Effect [0]. Your best people leave and you're left with the worst performers. Do this a few times and you end up with a barely functioning organisation. [0] http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-dead-sea-effect/ http://brucefwebster.com/2008/04/11/the-wetware-crisis-the-d...

jiveturkey 6y ago

more importantly, it won't get you the precise 11% you want to get rid of.

frivoal 6y ago

This would encourage the people who have the most options to leave, and those with the least to stay. This isn't necessarily the same, but is likely to be very similar to encouraging your best employees to leave, the worst ones to stay.

Smilliam 6y ago

The issue with this approach is that the company then leaves itself vulnerable to a big brain drain. If the bulk of those volunteers end up being your best seniors/leads who know they can just go down the street and pick up another job at comparable comp all while getting a cozy three month vacation that you're bankrolling...well, it's easy to see how you could be left in a much worse position imo.

Simulacra 6y ago
The high performers, the people who make money for the company, are rarely the first to be let go.
- Smilliam 6y ago
  Correct, which is why it's not ideal to allow folks to volunteer for severance as the GP suggested. The company wants to choose who to let go to avoid putting themselves in a worse spot afterwards.
- obstacle1 6y ago
  The point is they might be the first ones to voluntarily leave.
- mike_ivanov 6y ago
  Wrong. People with the highest salary are usually the first to be let go, regardless of their status or contribution. update: you think rationally, looking from the "greater good" perspective. Decisions are never made like that in reality. The way it happens is the board says "we need to cut expenses by X% or else", and that becomes your new "rational" -- or you lose your CEO job. Nobody cares about long term consequences in situations like that.

jedberg 6y ago

Usually they don't want any 11%, they want a specific 11% (or whatever) because they are cutting specific programs. For example, when I was part of a layoff in 2001, the company mostly let go of engineers and IT (and kept all the sales and marketing), but it wasn't just any engineers, it was the engineers working on a specific product that was being cut. Also, for IT, my boss came to the three of us and said, "I have to cut one of you, but you're all equally good, so you guys can decide amongst yourself if you want". So at least down at the lower level they did as you suggest.

X6S1x6Okd1st 6y ago

When COVID hit the company I was at previously gave opened a company wide offer some months of severance + playing for COBRA.