Once upon a time, companies rewarded loyalty and hard work with continued employment. Business Reporter’s resident U.S. ‘blogger Keil Hubert describes how modern practice of random layoffs eviscerates employee morale and productivity – and how to counteract it.
How does it feel, knowing that someone very close to you right this minute wants you dead? To realize that one of your co-workers – maybe your boss, maybe her boss, or maybe the janitor – is actively plotting your demise, all the while pretending to be friendly towards everyone. There’s a murderer in your midst! Maybe they haven’t killed before; maybe they have. Doesn’t matter. What’s important is that they’ve been nurturing a grudge against you for a long time, and can’t wait for an opportunity to strike and watch the hope drain out of your face. They’re coming for you …
Doesn’t feel very good, does it? Makes a person perpetually anxious. Near-petrified from fear. Always on edge, waiting for the attack. Jumping at every unexpected noise and movement. A state of constant tension is corrosive to productivity, so … why do we allow our offices to be like this?
Why do … Hang on a minute. I left a word out of that first paragraph. Let me take another stab at it: How does it feel, knowing that someone very close to you wants you career-dead?
Doesn’t make much difference, does it? Just because the global economy seems to be recovering, we all seem to be teetering on the brink of another Great Recession. Losing one’s paid position introduces the very real risk of losing one’s savings, one’s home, one’s economic viability, and even one’s family. It’s almost a mercy to be stabbed literally rather than figuratively by one’s employer.
‘That’s a relief! I thought for sure you were reaching for a pink slip. Go on, then.’
Yes, I’m talking about layoffs. Redundancies. Restructuring. ‘Right-sizing.’ Pick your favourite euphemism; it’s still the practice of firing workers in order to reduce company spending. It’s a grossly-overused tactic that destroys lives, permanently ruins morale, corrodes loyalty, and weakens already-teetering businesses. It’s also as common a tactic as updating marketing slogans.
I’ve heard it argued that random layoffs became de rigueur in the 1980s, but I disagree. I side with Dan Bobkoff’s analysis that IBM’s 1993 termination of 60,000 employees forever after altered business culture to use personnel purges as a short-term tactic for polishing balance sheets. In his exceptional June 2016 report The Price of Profits for Business Insider and Marketplace, Bobkoff wrote:
‘…as long as you did your job, if you worked for IBM, you had job security. Thomas Watson believed it was good for business.
‘“He believed people worked better when they were secure, not insecure,” … Watson “believed people would make a full commitment to the company if they knew they could count on the company to make a full commitment to them.”
‘And it’s true. IBMers interviewed for this story who worked there starting in the 1960s, ’70s and ’80s are intensely loyal, even when they criticize some of the changes in recent years. Many said they would do anything for the company back then.’
IBM’s CEO Louis Gerstner made a tough decision as to how best to increase ‘shareholder value.’ He didn’t just terminate people – he also coldly murdered IBM’s core values in the process. He made it clear that his employees’ loyalty and faithful service was irrelevant when compared to his shareholders’ insatiable hunger for profits. Employees became disposable assets; just ‘human resources,’ fit only to be used and discarded. To his credit, Mr. Gerstner earned himself a lasting place in business school textbooks. The culture change he inflicted on IBM is now a global norm.
Like replacing stale doughnuts at meetings with stale bagels, but with a much greater probability of triggering gastric distress.
It gets worse: since IBM set the new standard, companies everywhere have used sudden personnel purges as a sure-fire way to offset a bad fiscal quarter. Layoffs can happen at any time, and can affect anyone – no matter how important, profitable, loyal, or knowledgeable they might be. This has left lower- and middle-class corporate employees operating in a perpetual state of existential anxiety. Well … most of them. Some workers don’t appreciate the danger they’re in until it’s too late.
As an example: I started work at a very large IT company the same week that ten percent of my new department received layoff notices. Our business unit was (I was told) straining under too much demand and didn’t have enough engineers to cover the load. Upper management had just posted strong growth numbers for our division … but our department had razor-thin profit margins. Our customers used a lot of support. That meant we needed a lot of engineers. You’d think that this was an understood cost-of-doing-business, and therefore had to tolerated. Not so much.
I asked my boss what the layoff methodology had been. He said that it had been a management-directed decimation. Every director had to eliminate ten percent of his or her staff – without regard to speciality, function, or workload. One in every ten had to go. So, most directors had used the order to terminate their lowest-performing employees … or else take revenge for past slights.
I interviewed several people who had survived the ‘purge.’ Many said that they felt that they were safe. The bloodletting was over with. Profit margins would get back into healthy territory. The few ‘bad apples’ had been thrown out. There wouldn’t be any more layoffs. Everyone could relax.
Were they wrong? Of course they were wrong. These people were operating under a fatally flawed mental model. They assumed that the company was being managed rationally, by people making carefully calculated decisions in order to maximise productivity. In actuality that directors had been allowed (possibly encouraged) to fire people based solely on personal grudges disproved that.
‘Susan misspelled my name again? I’ll see that she burns for that even if it means I have to ruin the entire project!’
The practical reality that we lived in wasn’t rational, and it wasn’t fair. It was more like the setting of one of the grandest murder mysteries ever written: Agatha Christie’s And Then There Were None. [1] Darned near everyone has seen this story in some form or fashion; it’s been repeated, reinterpreted, and parodied so many times that it’s deeply burned into our cultural collective consciousness.
The plot is deceptively simple: eight people are lured to a remote mansion under false pretences. A recording informs the guests that their ‘host’ knows that they are all secretly murderers. There’s no way off the island. One by one, the characters are gruesomely murdered, each in the manner that they’d killed their own victims. As the number of characters dwindle, they start to suspect that one of them is actually the killer, since there’s no way for a person to remain hidden in the setting.
That, I argue, is the emotional environment that we’re all living in at work. Here’s what I’m on about – and I’ll continue using the story of the doomed tech support company to illustrate my point.
Three months after the ‘decimation’ event, our division released another quarterly earnings report. Just as before, our department’s margins were too thin … perhaps because the already-overworked tech support group had just lost ten percent of its bloody staff! Whatever. Upper management was told to take drastic action to improve profitability. Did they invest in better equipment? Or training? Better working conditions? Of course not. If layoffs didn’t fix things, more layoffs would surely do the trick.
A few weeks after the gloomy report posted, I was told that I was to oversee the activation of a new overseas tech support centre because we were going terminate half of our US-based workforce and ship their jobs overseas to cut costs. Three weeks later, everyone stationed at the doomed support centre was told that their services were no longer required. Shock rippled through the division. People were horrified … but the employees who weren’t laid off rationalized that they were safe now. So many cuts had occurred that the company couldn’t possibly cut any deeper. It would all be fine.
‘It’s all going to be okay! A company that did the exact same counterproductive thing three times in a row would NEVER do the exact same counterproductive thing a fourth time!’
It was not fine. I tried get the survivors to understand that they’d only been granted a temporary reprieve; career death was still coming. Well, some of them; thanks to contract stipulations, the US offices couldn’t be completely closed. A few key engineers would still be needed. A few; not all.
Some of the wiser workers started stealthily updating their CVs, applying for external positions, and meeting up after hours to network with recruiters. I facilitated as much of that as I could, doing everything in my power to help maximize my mates’ chances of finding paying work. Some of the crew, unfortunately, simply couldn’t accept the idea that management would ever slash them.
In Christie’s novel, the ‘victims’ had been selected because the murderer felt morally comfortable murdering other murderers. The victims hadn’t been caught or punished, therefore, they were fair game. The mastermind had spent years crafting ingenious ways to dramatically kill each of them without being detected at a time and place of his or her choosing. Their guilt was settled, even though they never got a chance to defend themselves against the damning charges. That they deserved death for their crimes wasn’t up for debate in the murderer’s mind.
I’d seen this exact scenario play out at another large IT company a decade earlier. The company was losing money. The owners were desperate to prove that they were ‘turning things around.’ Cutting personnel was the fastest way to show ‘improvement’ to Wall Street. When things got desperate, the owners ordered that half of our division be slashed, since we were located on the other side of the country from the company HQ. The central office didn’t designate the ‘victims’ of the purge; the left it up to the local manager. That meant that the people getting laid off weren’t chosen based on objective or rational criteria … they were all victims of petty personal politics and spite.
Each of the managers was allowed to decide who to terminate in order to meet a specific headcount target. People being people, this ‘license to kill’ emboldened many of the leaders to indulge their depraved need for vengeance. In my team, the manager elected to release everyone who had ever opposed him in a meeting. The company lost its most senior data centre engineers and its entire consulting staff, wiping out three million dollars’ worth of scheduled future revenue. All because a feckless moron had gotten his feelings hurt once in a meeting and wasn’t mature enough to let it go.
Pro tip: if you don’t want to be humiliated in a meeting, maybe don’t try to tell an industry expert how to do a job that you’ve only just heard of.
I told that story to my mates at the tech support company. The same thing was going to happen to us ‘remainders,’ I said. Our division had been cut far too deep to be operationally viable. The new overseas engineers were great people, but they were only operating at a fraction of their required capability while they ramped up. The US survivors couldn’t handle the workload, which meant that the department’s profitability was never going to improve. Therefore, either a divestiture or a catastrophic restructuring was coming. Worst of all, there weren’t any more satellite offices to close. There was only one American support centre left. The next round of cuts would be personal.
Complicating things (I warned) was that we didn’t know who was going to make the termination decisions. Was is going to be our manager? His director? Her superior? HR? Worse than that, we didn’t know who would be influencing the decision maker. Every manager had a cadre of trusted advisors, Gríma Wormtongue style. The decisions about who would get cut next were already being made, so it was imperative that everyone tone things down. Be circumspect and maintain a low profile until the announcement. Minimize one’s exposure, and maybe thereby survive another day.
Many of my co-workers didn’t listen. Their frustration with the situation made them bolder. Tensions flared as workloads became crushing and deadlines became impossible. People started chastising management for their bad decisions. Unsurprisingly, when the next wave of layoffs was announced six months later, those people who had objected the loudest to the situation were the ones ‘let go’ – regardless of their skills, experience, or economic value to the company.
This is not to imply that the workers who disappeared into the background escaped the cuts. They didn’t … not entirely. That is, the terminations that were motivated by personal vendettas didn’t cover the headcount reduction requirement, so some of the quiet one got cut too. Keeping quiet was the optimal approach to avoid getting axed, but it wasn’t a guaranteed path to safety. Nothing was.
The lessons to take away here are rather grim: first, companies are accustomed to using layoffs as a cheap-and-cheerful substitute for actual leadership when their stakeholders need to be appeased. They’re going to happen sooner or later. Someone in upper management inevitably gets spooked, fears for his or her own job, and throws a bunch of loyal minions overboard to appease the allegorical circling sharks. Second, the decisions about who to kill off when layoff time comes are already being made, long before cull is announced. Most people remember personal slights and political defeats; some people hold onto those memories forever as a grudge. The person that you infuriate or embarrass today could be the instrument of your career-demise sometime in the future.
‘This is for when you insulted my homemade bean dip at the company picnic three years ago!’
So, what’s the solution? Give up hope? Become an obsequious sycophant? Try and hide in the basement, praying that management forgets you exist? I say hell, no! In fact, as counterintuitive as it may seem, I recommend that people embrace the risk of causing offense and fully engage with their peers and superiors. Do your job with confidence and integrity. Stand by your principles. Challenge people to be accountable for their actions. Be the stalwart employee that the company requires, even if every demonstration of moral courage puts you at greater risk of future spite-driven elimination.
Why? Because not all bosses are Evil Bobs. Most leaders are struggling to do right by their employer and their employees. More leaders than you might expect are exceptional men and women of strong moral character. Good bosses need faithful, dedicated team members if the team is going to succeed. To create and maintain a healthy office culture, everyone involved needs to do the right things, the right way, at the right time, every time. Good bosses will see and remember your diligence. They’ll also try like hell to protect you the next time that the layoff knives come out. Do the right thing.
After all, keeping completely silent and hiding from management is no guarantee that your allegorical evil mastermind won’t get you in the end. That tech support company that I got laid off from? I called up one of my mates who’d narrowly escaped the third round of bloodletting. Six months after our purge, upper management obliterated our entire workgroup. All of the remaining survivors were either fired or were demoted and transferred to dead-end jobs in other departments. The team’s final status report may as well have read ‘and then there were none.’
[1] I’m not going to weigh in on the book’s original title. Let’s leave it that I find the title choice outrageous, even given the cultural mores of the time in which the story was written.
Title Allusion: Agatha Christie, And Then There Were None (1939 Book, 1943 Play, 1945 Film, et al)
Photographs copyright under licence from thinkstockphotos.co.uk: man with knife – Creatas; man with big knife – Chinnasorn Pangcharoen; man eating – nicolesy; angry woman – AntonioGuillem; man in field – Gajus; blaming a colleague – AndreyPopov; stabbing – moodboard
POC is Keil Hubert, keil.hubert@gmail.com
Follow him on Twitter at @keilhubert.
You can buy his books on IT leadership, IT interviewing, horrible bosses and understanding workplace culture at the Amazon Kindle Store.
Keil Hubert is a retired U.S. Air Force ‘Cyberspace Operations’ officer, with over ten years of military command experience. He currently consults on business, security and technology issues in Texas. He’s built dot-com start-ups for KPMG Consulting, created an in-house consulting practice for Yahoo!, and helped to launch four small businesses (including his own).
Keil’s experience creating and leading IT teams in the defense, healthcare, media, government and non-profit sectors has afforded him an eclectic perspective on the integration of business needs, technical services and creative employee development… This serves him well as Business Technology’s resident U.S. blogger.
