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I don't think you need to "justify layoffs". If a company feels an employee is not being productive, they should be allowed to let them go. Same way if an emplo

• dragonwriter 1y ago
  > I don't think you need to "justify layoffs". Layoffs are a signal to markets of struggles, and firms absolutely do, in practice, need to justify them (and their scale and focus) to avoid the risk of a self-fulfilling market perception that they signal a problems that they do not fully resolve. (If there is already a problem narrative, much of the justification is obvious, and the firm just needs to cover explaining how the layoffs address the problem.)
  • helge9210 1y ago
    If we assume the company runs N projects with positive Net Present Value (NPV) at the start of the project and after re-evaluation some of the project NPV turned to be negative, closing the project and laying off the staff will actually make company worth more.
    • dragonwriter 1y ago
      Yes, but the reason you will see companies put out press releases explaining layoffs is because the market does not on its own make such generous assumptions reliably when it sees layoffs. (And even if it does, the fact that the NPV of a project "turned negative" indicates that the value of the company dropped, and the layoffs are only a partial mitigation, which still hurts the perception of the company if the market hadn't discovered and priced in the drop before the company did and reacted with layoffs.)
  • ndriscoll 1y ago
    Layoffs are a signal that a company feels they don't see a way to get a high enough ROI on their productive capacity. That could be performance related, or it could be e.g. that the company does not see good R&D avenues to pursue, so they scale down their R&D org. Or market demand dries up so they scale down their sales org. Or interest rates change, changing the definition of "high enough ROI". In theory people working in computer fields are always building automation so it should be easy to scale down and coast in maintenance mode if the business wants to do that. That applies less to video games of course, but even there the top selling games each year consistently feature Call of Duty <current year>, Madden <current year>, and FIFA <current year>.
    • cudgy 1y ago
      Layoffs indicate a poorly run, inefficient company, especially if other companies in the same industry had fewer layoffs. Typically this means that the company hired and trained more workers than it needed; their estimates of future opportunity was wrong relative to other companies that did not require layoffs because they’re hiring was based on more accurate estimates. Another factor is that retained employees that learn of companies layoff frequently become concerned about their own position and the treatment of the workers that were laid off, reducing employee morale. High performers may start looking for another job in order to avoid expected future layoffs. Then there’s the impact on potential future employees, who will also know about the layoffs. These employees will be aware of recently layoffs and will expect more money from said company who will also have to train the new employee that replaced the one they laid off before. Finally, you have the impact on potential customers or existing customers. Some customers have relationships with employees that are laid off, and this can be jarring. The customers may become concerned about the liability of the company or the management of the company, potentially moving all our part of their business to another firm. All of these effects are not typically beneficial to the company or it’s shareholders.
• dijit 1y ago
  I'm in the same camp as you. However the best work I ever did was done when I didn't have a pressure of being fired for offending the wrong person, and that I had the psychological safety to think longer term- since a short term "time-waste" often converted to better long term outcomes for everybody.
  • bpt3 1y ago
    In my experience, companies that are focused on being a well-run company rather than a politically/personality/emotionally driven shitshow also are the ones that have long-term perspective and avoid making kneejerk reactions to almost everything.
  • Aurornis 1y ago
    > However the best work I ever did was done when I didn't have a pressure of being fired for offending the wrong person, and that I had the psychological safety to think longer term- since a short term "time-waste" often converted to better long term outcomes for everybody. I felt the same way until I worked at a company where almost nobody ever got fired or laid off. Anyone who was hired was basically guaranteed their job until the end of time because the leadership didn't like letting anyone go. It only took a couple years until every time you needed to do something you'd run into some employee somewhere who wasn't doing their job. Even many people who seemed capable and appropriately skilled started slacking off when they realized there were never any consequences at all. It was like a broken windows theory for the workplace. As people looked around and saw that others were doing almost no work, it started to spread. The people who liked actually shipping things started leaving, turning it into a snowball effect. So there's a balance. Always working under threat of layoff and seeing good coworkers let go when you're already overburdened isn't good. Working in a company where there is no pressure at all to perform isn't good either.
    • dijit 1y ago
      Hah, yes, I've also been in those companies, and that's exactly why I have the shared view of the person I was replying to. There's a sort of apathy osmosis that happens when you realise that you can't actually do anything because everyone else is sort of checked out... so the you, yourself, sort of check out too. I get anxiety and "itchy" if I don't move towards my goals with any kind of swiftness.
• pmarreck 1y ago
  > If a company feels an employee is not being productive, they should be allowed to let them go. Even if they feel they ARE being productive, they should be allowed to let them go. The ultimate point of a job is not to get paid, it is to produce work that accomplishes a goal set by the employers. So if they change those goals for some reason, then the letting-go should be allowed. I really wish there was some sort of UBI to disincentivize clinging to a near-useless (in terms of ultimate goals) job. Heck, just making unemployment not contingent on getting fired (another perverse incentive) would be an improvement.
  • deleted 1y ago
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  • platevoltage 1y ago
    Decoupling healthcare from employment would also be an improvement. My mom would have retired several years earlier if it weren't for my parents relying on the county government for healthcare. We don't have UBI, and unemployment is very limited. Getting laid off on a whim with no warning can literally be a death sentence. I know I post Star Trek analogies a lot, but if Chief O'brien got laid off from Deep Space Nine because of cost cutting, he would be fine. (actually, he'd probably be much better off). We don't live in this world. We live in a world where losing your job can kill you.
    • pmarreck 1y ago
      I unfortunately agree on this. My healthcare is provided by my partner and it forces her (more or less) to stay at that job.
• jasonlotito 1y ago
  > If a company feels an employee is not being productive, they should be allowed to let them go. That's not what layoffs are. In fact, your belief is not productive. Why are you waiting for layoffs to get rid of people who are not being productive? Why are you supporting people being unproductive? > You need a way to get rid of dead wood, otherwise you would be too afraid to grow and hire when you need to. That's not what's happening. Generally it's a result of leadership failing to do their job, misusing resources, and needing to compensate for that in the market. Layoffs are signals that the leadership is not being productive. Full stop.
  • bastardoperator 1y ago
    There is zero top down accountability from supposed leaders these days. They will happily throw employees under the bus to cover for their own mistakes.
    • baggy_trough 1y ago
      Accountability is supplied by the market. That is, unless we are talking about a low-accountability sector like government or non-profits.
• johanneskanybal 1y ago
  If you’re in tech in us you’re also compensated based of that, it’s not exactly the same math everywhere/anywhere. Also we’re at a site which is the Mecca of meritocracy and it’s useful to remember that part too.
• jayd16 1y ago
  > [...] layoffs". If a company feels an employee is not being productive [...] Layoffs are not about individual performance
  • fn-mote 1y ago
    Are you sure? So getting rid of 20% of the workforce and selecting “the bottom 20%” is not a layoff?
    • jayd16 1y ago
      You can loosely rank folks as best as you can but its still inherently a systemic action and not based on individuals. Other factors beyond individual performance caused the layoff.
    • fvgvkujdfbllo 1y ago
      You can’t always select the bottom 20%. Sometimes, whole teams or departments are eliminated. Employees are simply a number with cost and only thing matters is cost. They almost never look at individual performance or productivity. If your manager or director is not getting laid off with you and you have a good relationship with them, then they might fight to keep you.
  • rafaelmn 1y ago
    Productivity and performance are not the same thing. You can be a top performer on a project that flops and you're a net negative. Ideally you'd get transferred to a more productive role but there are a lot of variables involved.
  • Spoom 1y ago
    To be fair, a handful of large companies have explicitly said[1][2] that their layoffs were largely about individual performance. All my experience as a manager in a large tech company says that that's almost certainly not the whole story, and unfair to many of the folks getting let go, but official word from the companies say otherwise. 1. https://www.cnbc.com/2025/01/14/meta-targeting-lowest-performing-employees-in-latest-round-of-layoffs.html https://www.cnbc.com/2025/01/14/meta-targeting-lowest-perfor... 2. https://www.cnbc.com/2025/01/08/microsoft-confirms-performance-based-job-cuts-across-departments.html https://www.cnbc.com/2025/01/08/microsoft-confirms-performan...
• dkxjxb 1y ago
  I used to think like this. However, this kind of argument is only good if the basics are met. We have enough technological advancement in America that given strict immigration controls we can ensure the median American is able to raise a family of at least 2 kids while holding an entry level job (of which their should be plenty). Anything else is morally wrong, and those pulling the levers of power are evil. We’re seeing the opposite and the wealth gap is increasing because the elites running our society see us as cattle, not countrymen. The current point of our country is to increase GDP (which is a fancy way of saying make the rich richer, given the current wealth gap). It should be to enrich the lives of all its citizens.
  • bpt3 1y ago
    > We have enough technological advancement in America that given strict immigration controls we can ensure the median American is able to raise a family of at least 2 kids while holding an entry level job (of which their should be plenty). What evidence is there to support this? Kids are expensive, and entry level jobs do not produce enough value to generate an income that can support several people. > Anything else is morally wrong Why?
    • dkxjxb 1y ago
      [dead]
    • beachtaxidriver 1y ago
      But it used to. In the post war boom it definitely used to produce enough value to support several people. And we're far wealthier in aggregate now than before, it's just distributed badly now.
      • tock 1y ago
        Thats because entry level jobs provided a lot of value back then. It's just harder these days with the amount of automation and tech advancement. I guess one way is to increase the min wage a lot. But I am guessing employers will just pivot to hiring even less.
• conception 1y ago
  One comment on this is when you leave a company is customary to give your two weeks. Companies rarely offer than consideration for employees. This unbalanced power dynamic is even greater as a layoff doesn’t mean a catastrophic situation for the company but for the employee it often is. The two events shouldn’t be compared apples to apples.
  • ahtihn 1y ago
    > Companies rarely offer than consideration for employees In almost all layoff situations, employees get severance even in the US no? At least for the big tech layoffs that seemed to be the case.
    • cm2012 1y ago
      This is the case for big tech, almost never for small businesses in usa
      • gmanley 1y ago
        Define small business, because unless you are talking a mom and pop shop, my experience is severance is still a thing and definitely not big tech exclusive.
        • cm2012 1y ago
          Any company under 50 employees, which makes up 85% of American businesses. And even bigger companies outside of tech usually give really small severance. Tech is basically the only area where you get 3-6 month packages for a standard lay off.
    • lovich 1y ago
      Big tech is unique in usually giving severance. I’ve only seen it given to non director+ titles once in my career
• dfxm12 1y ago
  Layoffs are different from firing individual people. Layoffs do have some legal requirements, including what's outlined in the WARN Act and/or whatever local equivalent. Layoffs also have to be justified to Wall Street or else the stock price will be affected. GP is clearly talking about the latter.
• tharmas 1y ago
  Ah yes, the employee is a Cost, not an asset. Got it.
• ghurtado 1y ago
  > they should be allowed to let them go. Sounds like you've never worked here, but in the US that's always been the case. US corporations do not need you shilling for their rights, they are doing very well in that department without your help, thank you very much.
• mschuster91 1y ago
  > You need a way to get rid of dead wood, otherwise you would be too afraid to grow and hire when you need to. Alternatively, you can retrain the workers. Replacing workers has serious cost disadvantages: recruiting itself costs money (the HR staff dedicated to that, external headhunters, "employer branding" measures, job exhibition rents and swag), layoffs cost reputation, and new workers need to be trained in your company specific procedures from timetracking to expense refunds. Unfortunately, these costs are all too often hidden deep in the balance sheets, which makes just dumping off entire departments while hiring up other departments appear much more financially attractive than it is in reality, all costs considered. And finally, the ethical question remains: executives get paid sometimes a hundred million dollars a year because of the "responsibility" they hold. But in the end, they do not hold any responsibility, any accountability - financial penalties for shenanigans get covered by D&O insurance, and the first ones to get sacked for (or having to live with) bad executive decisions are the employees while the executive gets a departure agreement showering them with money. IMHO, before a company can even fire a single worker for another reason than willful misconduct, the entire C-level executive has to go as well, with immediate stop of pay and benefits.
  • alephnerd 1y ago
    > Alternatively, you can retrain the workers Back in my PM days, I tried this with a couple old timer SWEs at my company. All except 2 blew it off and when pushed back they tried to play politics via the "old boys club" of buddies in Engineering Leadership (in PM vs Director or VP Eng, the Director or VP Eng always wins). Retraining only works if the people who need to be retrained want to take the effort to retrain. In an industry like tech where self-learning is so normalized and to a certain extent expected, the kind of person who needs to be forced to retrain just isn't the kind of person who actually wants to retrain. Also, ime, age does not correlate to this. Being lazy is a personality defect orthogonal to being a gray beard or someone in your 20s. > these costs are all too often hidden deep in the balance sheets, which makes just dumping off entire departments while hiring up other departments appear much more financially attractive than it is in reality, all costs considered. Not really. The process of hiring a new employee in aggregate costs at most around $10k on top of salary. The cost of keeping a low effort employee is the salary along with the additional 30-40% paid in benefits, insurance, and taxes of retaining that employee. As such, it's basically a wash at the individual level. > executives get paid sometimes a hundred million dollars a year because of the "responsibility" they hold Most don't though. The person who ends up deciding to increase hiring is almost always an Engineering Manager or Director (depending on size of company). VP and above only have visibility on top-line numbers, but the actual business case to hire is made by EMs or Directors.
• qwery 1y ago
  The term 'layoffs' in this context is simply not what you're describing. These layoffs occur at such scale that it's unreasonable to assume any individual employee being "let go" has even been evaluated as an individual. And, yes, of course layoffs are something that need to be justified, just as with firing an individual employee, as you know -- the "employee is not being productive" is a justification.
  • baggy_trough 1y ago
    If I no longer want to pay for your services, I should be able to stop for any reason, or no reason at all.
    • gjsman-1000 1y ago
      At a fundamental level, I agree with you. I also believe that the fact 1,000 employees can be laid off at once, and then flood the market with applications, is not something we should prevent. Rather, it's a sign we need to make more small independent companies. This is a concentration problem. That would of course require that maybe we shouldn't have the Magnificent 7, but the Magnificent 100. Maybe instead of the Fortune 500, we need the Fortune 5000, with each one much smaller. Not happening anytime soon with current incentives, but I think it would be better for everyone. We shouldn't split Google into two, but into thirty. It would be radical... but imagine if we set an aggressive, aggressive cap on employees and contractors. Like, limit 100, with a 1% corporate income tax on every additional person. Projects at scale - 50 companies cooperating; maybe with some sort of new corporation cooperation legal structure (call it the D-Corp, it manages a collection of C-Corps working together, and cannot collect profits for itself or own property, a nonprofit that manages for-profit companies who voluntarily join in a singular direction).
      • bigyabai 1y ago
        That wouldn't just be radical, it would be a violation of free market principles. If smaller orgs are actually more effective than big ones, then the market would self-correct. I'm inclined to argue that we have the economic data to prove your theory wrong. Imposing a hard headcount limit would be the definition of pointless government overreach.
• ikrenji 1y ago
  these companies are breaking the social contract. the society allows them and tolerates them making billions in profit as long as it's shared with the public in the form of good jobs. if you remove the latter part from the equation what's the point of these companies anymore? people are not gonna put up with this and something is gonna give sooner or later.
  • bpt3 1y ago
    Society "tolerates" them because they have plenty of people willing to voluntarily give them money which totals billions of dollars for the bigger companies. Jobs are a byproduct, not a hard requirement for a company to function, because the point of a company is to offer a service to customers, not to act as a jobs program for a town, state, country, or region.
• screye 1y ago
  I have changed my opinion on professional warmth. In demanding industries, people spend 2/3rds of their waking hours around their coworkers. That's practically their whole life. It's cruel to encourage coldness in such an environment. You aren't family. But, you can be comrades. Your friendships can be forged through shared struggles, shared spaces and convenience. It's a unique trait of tech companies to encourage cold but polite relations with your coworkers. Other industries have layoffs, politics and capitalistic competition. That doesn't stop coworkers from becoming friends. The new generation is more isolated than ever before. The workplace is one of the few remaining mandatory social spaces. We should encourage the organic warmth that builds up between coworkers. It's cliche. But we're social animals.
  • AlexandrB 1y ago
    There's a difference between professional warmth and "we're a family". The latter usually comes top-down, from management and is fundamentally disingenuous. It's often a self-serving way of trying to get you to treat the company as your family, while company leadership still won't hesitate to lay you off in a mass zoom meeting. It's fine to be friends with co-workers or managers, but don't let companies obscure the fundamental nature of the relationship.
  • jazzyjackson 1y ago
    > It's a unique trait of tech companies to encourage cold but polite relations with your coworkers. I don't know how you can assert this, among any other "stuck in a cubicle" office environment. Opportunities to be social are brief anyway. I'm on the side of 'give people time off enough to develop relationships outside of work'. 4 day work weeks would go a long way to helping people get the socializing we need.
    • mschuster91 1y ago
      The problem is the lack of "everyday" socializing, and commute is the cause of that. In ye olde heavy industry days, workers lived relatively near to their workplace, and often gathered for a beer after work - just visit any of the old heavy industry towns here in the Ruhrpott, there's so damn many pubs situated closely to the mines, pits and smelters. That also was the prerequisite for why and how unions got popular - the employer could ban unions from entering the workplace itself, but they could not restrict political activity on third party places such as beer halls. Today, all of that is gone. Average commute times tend to be measured in hours, so with regular "overtime" you're looking at 12 hours of being away from home for work purposes - eight hours of working , two hours of commute, one hour of lunch break, one hour of overtime. And on top of that, work is condensed ever more by everything being tracked, can't even take a piss any more as a call center worker before the supervisor gets a notification that you haven't picked up a call in 60 seconds.
• pfisch 1y ago
  I agree with you, though I would say what is happening here is more like strip mining vs cutting dead wood. I don't know that it should be legal to buy a company and then pay for it by loading up the company with debt obligations. It seems like a form of value destruction in order to enrich a bunch of vultures. Fundamentally it is basically saying maybe we could buy this company and then plunder it with some % chance that it will still stay afloat and keep generating profit after they gut the company to try to service a debt that should not be attached to the company at all and provided no value to anyone but the vultures.
  • terminalshort 1y ago
    Once you buy the company you are free to borrow money because it's your company. Why wouldn't you be allowed to do that?
    • cptroot 1y ago
      The same reason payday loans are illegal in 9 states. Companies who follow this pattern of behavior are more likely to go into bankruptcy.
      • terminalshort 1y ago
        Then, fuck em, let them go bankrupt. Companies have no right to continued existence.
        • Arainach 1y ago
          Companies that go out of business hurt more than the owners - they hurt the employees, the community, the state (which has to care for the employees let go), etc.
          • terminalshort 1y ago
            That is unfortunate, but it is good for society to have rapid turnover of unprofitable businesses. The employees will be fine and get new jobs. When one company goes under, they will go to another. You don't work for a company, you work for an industry, and unless the layoff is due to industry wide issues, you will be fine.
• alfalfasprout 1y ago
  You do need to justify them to investors. Layoffs are, historically, a sign of weakness and has an effect on growth. Companies need to be strategic with the messaging so as to not scare shareholders. Hence, they use "strategic refocusing on AI" or "operating leaner and faster" as buzzwords to characterize the layoffs. In reality, in the last couple years companies are just trying to slash costs however they can because real sustained growth is highly uncertain.
• simonjgreen 1y ago
  I agree with you, however, layoffs and performance management are different things though. If an employee is not being productive, that is a performance management issue and a good company will start by trying to fix it and if that doesn’t work will replace them. A bad company will retain bad performing people. Layoffs are when you don’t have the work for them or you can’t afford something so are restructuring or similar. A good company will make layoffs and restructure if the economics require it. A bad company will keep going without doing that, ignoring their finances.
• jandrese 1y ago
  If an employee is unproductive they can be fired. Layoffs are how you get rid of employees that are productive without having to make up some justification because it lowers your costs and increases the stock price, which rewards the executives.
  • terminalshort 1y ago
    If the employees are productive, then why would laying them off increase the stock price?
    • jandrese 1y ago
      Because the stock market likes reductions to costs and doesn't think past the current quarter.
      • terminalshort 1y ago
        This is one of the stupidest arguments I have ever heard. Amazon was worth a fortune even though if made no money for almost 20 years since investors anticipated future profits.
        • bcrosby95 1y ago
          This is a well known problem with the public markets. It is stupid, but your ire should be reserved for the markets themselves not the person pointing out the stupidity.
          • terminalshort 1y ago
            [flagged]
            • Arainach 1y ago
              Over an over, this isn't true. Look at GE under Jack Welch. They sold off everything that made them great, but it sure looked like they were profitable, so the stock soared right until everything went to hell. Look at all the companies that have copied their pattern over and over to this day. Everything is about manipulating the perception of the market right now, not the perception of the market - or even the existence of the company - in a decade. Long-term oriented markets wouldn't be dumping so much money into high-frequency trading. Instead of reducing latency, a long-term focused market would increase the minimum latency to disable that kind of nonsense.
• chaosharmonic 1y ago
  > I don't think you need to "justify layoffs". If a company feels an employee is not being productive, they should be allowed to let them go. Layoffs, by definition, aren't about individual employees.
  • s1artibartfast 1y ago
    By Legal definition. On the other hand, I have never seen a layoff that wasnt about individual employee performance
    • chaosharmonic 1y ago
      I mean. There was that time Zuck made a bad bet on VR and then the entire dept working on it got slashed...
• jrnng 1y ago
  Imo the term layoff used to mean something different. Getting rid of "dead wood" should be a firing, not a layoff. Layoff is "this division or project is a dead end or not aligned with strategy and we are shutting it down, and don't have other spots to place everyone"
• YeahThisIsMe 1y ago
  Companies don't have feelings. And s company being able to fire anyone for any reason isn't even close to being comparable to an employee being "allowed" to leave the company for any reason. What a wild comment.
• ajjahs 1y ago
  [dead]
• array_key_first 1y ago
  If you're in the business of making decisions, you should be able to justify those decisions. If you can't, that's a huge red flag. You probably shouldn't be C suite if your answer to why you do the things you do is 'idunno lol'. That being said, performance IS a justification.