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Below comment on another layoff related thread is relevant here too - https://news.ycombinator.com/item?id=34480652 https://news.ycombinator.com/item?id=3448065

Below comment on another layoff related thread is relevant here too - https://news.ycombinator.com/item?id=34480652 https://news.ycombinator.com/item?id=34480652 The professor recommends across the board pay cuts as an alternative to layoffs. > One thing that Lincoln Electric, which is a famous manufacturer of arc welding equipment, did well is instead of laying off 10% of their workforce, they had everybody take a 10% wage cut except for senior management, which took a larger cut. So instead of giving 100% of the pain to 10% of the people, they give 100% of the people 10% of the pain. Curious if there is research here on how this impacts the company? Seems like it would also increase stress and encourage top performers to seek new opportunities. He also recommends hiring during a recession: > He actually hired during the 2000 recession and saw it as an opportunity to gain ground on the competition and gain market share when everybody was cutting jobs and stopped innovating. I suppose this works when it works, and then fails completely when it doesn’t. In essence, this increases the risk profile on the company which seems problematic too. Would be curious if there are studies that show the outcomes of these strategies. Perhaps there are no “good” strategies- just those that favor employees or those that favor investors.

redwood 4y ago
I would expect a mix of all of these strategies 1) cut non biz critical distracting scope which sometimes means teams or parts of teams 2) remove underperformed 3) rethink compensation for those who stay and future hires 4) don't always backfill natural attrition This is how things even out
bluedino 4y ago
I worked for company that forced everyone to use their vacation every quarter (right after Covid hit and revenue dropped) Meanwhile they remodeled some executive offices.
twblalock 4y ago
At a tech company that did this, the best people would leave. The remaining people would be the ones who are below average, or the ones who can’t risk a job loss because of visa issues. What Google is doing now is clearly not great for morale either, but universal compensation cuts would be worse.
- clnq 4y ago
  Maybe, maybe not. Many senior people (especially those who spent close to a decade at these companies and more) don't chase pay bumps. Some of the best people would leave. That is a much more realistic statement to my mind.
- neilv 4y ago
  > At a tech company that did this [10% pay cut for everyone in lieu of layoffs], the best people would leave. Why would that be? Is it trust? If I was making FAANG Staff+ TC, and a 10% paycut seemed necessary to avert layoffs in tough times, I think I'd take it, and have good morale about that. I suppose, if the company currently had large profits, and people didn't trust that belt-tightening was necessary, there'd be morale problems.
  - twblalock 4y ago
    There tends to be a self-fulfilling aspect of this. Some good people might not leave just because of a 10% pay cut -- but others would, and the ones who plan to stay will suffer the consequences of that happening. It's demoralizing, it creates an impression that the company is a sinking ship, the workload for the people who stay will increase to cover for the people who left, and the overall quality of coworkers moves in a bad direction. Those are all pretty good non-money reasons to want to leave. Tech workers have options, even in today's job market. If you work at the only auto parts plant in your region and pay cuts might be necessary to save the company, the logic is different.
    - Apocryphon 4y ago
      And layoffs are even more demoralizing. They’re like pay cuts but even more extreme. Companies always factor in voluntary attrition after layoffs.
      - twblalock 4y ago
        That's true, and I mentioned that what Google is doing now is also demoralizing, but consider the following: With layoffs, you either get screwed or you don't. With company-wide pay cuts, everyone gets screwed.

redwood 4y ago

I would expect a mix of all of these strategies 1) cut non biz critical distracting scope which sometimes means teams or parts of teams 2) remove underperformed 3) rethink compensation for those who stay and future hires 4) don't always backfill natural attrition This is how things even out

bluedino 4y ago

I worked for company that forced everyone to use their vacation every quarter (right after Covid hit and revenue dropped) Meanwhile they remodeled some executive offices.

twblalock 4y ago

At a tech company that did this, the best people would leave. The remaining people would be the ones who are below average, or the ones who can’t risk a job loss because of visa issues. What Google is doing now is clearly not great for morale either, but universal compensation cuts would be worse.

clnq 4y ago
Maybe, maybe not. Many senior people (especially those who spent close to a decade at these companies and more) don't chase pay bumps. Some of the best people would leave. That is a much more realistic statement to my mind.
neilv 4y ago
> At a tech company that did this [10% pay cut for everyone in lieu of layoffs], the best people would leave. Why would that be? Is it trust? If I was making FAANG Staff+ TC, and a 10% paycut seemed necessary to avert layoffs in tough times, I think I'd take it, and have good morale about that. I suppose, if the company currently had large profits, and people didn't trust that belt-tightening was necessary, there'd be morale problems.
- twblalock 4y ago
  There tends to be a self-fulfilling aspect of this. Some good people might not leave just because of a 10% pay cut -- but others would, and the ones who plan to stay will suffer the consequences of that happening. It's demoralizing, it creates an impression that the company is a sinking ship, the workload for the people who stay will increase to cover for the people who left, and the overall quality of coworkers moves in a bad direction. Those are all pretty good non-money reasons to want to leave. Tech workers have options, even in today's job market. If you work at the only auto parts plant in your region and pay cuts might be necessary to save the company, the logic is different.
  - Apocryphon 4y ago
    And layoffs are even more demoralizing. They’re like pay cuts but even more extreme. Companies always factor in voluntary attrition after layoffs.
    - twblalock 4y ago
      That's true, and I mentioned that what Google is doing now is also demoralizing, but consider the following: With layoffs, you either get screwed or you don't. With company-wide pay cuts, everyone gets screwed.