Saturday, November 16, 2019

Thoughts On Corporate Layoffs

I know a few people who experienced layoffs recently and I wanted to share some thoughts on the topic.

Always approach your job as if your continued employment were in question. It always is. There is some non-zero chance that the company that employs you will cease to need your services. Maybe it’s because your skills have grown stale compared to the industry standard. You were a fine fit for your position ten years ago, but the world has changed while you have not. Or maybe your company simply goes belly-up. It happens. The solution is to constantly keep updating your skills and learning new ones. Even if this fails to save your current job, it will help you find a new one quickly.

Save for a rainy day. If your job disappears, have enough savings to live off of for a few months until you find a new job. I suspect many people simply do not plan for this contingency. Open a Vanguard account, squirrel away a few thousand dollars, and force yourself to put away some money every month. Start small if that's hard, but try to work your way up to a few hundred or a thousand every month. If you insist that isn’t possible with your particular circumstances, fair enough, I “believe” you. But most people who believe this about themselves just haven’t thought very hard about how to downsize their household expenses. Think about what you can cut or downsize, and start squirreling some of the savings away.

“Layoffs” aren’t completely random. The company doesn’t just pick a random X% of employees to ax based on some calculation of labor expenses it needs to save. Low performers will be targeted first. This is not universally true. Sometimes a company needs to trim its belt and there aren’t enough under-performers. I knew some fine workers who were let go, and it was in no way performance-related. Layoffs tend to be a combination of cutting sheer dead wood and triaging the necessary but painful sacrifices. A lot of these layoffs weren't necessarily cutting bad employees but rather restructuring the company and eliminating unnecessary departments or job functions. Some of the laid off employees simply had the bad luck of playing musical chairs and rotating into a position that was slated for the chopping block. 

Severance can be pretty sweet. Some of the people I know got a severance package consisting of their full salary for six months, plus getting paid for all their unused vacation days, plus a couple of weeks remaining officially employed at the company (thought they were sent home). If they could find a second job in short order, best case scenario is five or six months of a double salary. That’s not a bad deal, once you get over the initial kick-in-the-ego that being separated from your job inevitably brings. I spoke to one person with a long career (who was not laid off) who said she survived several rounds of layoffs at a previous company. She repeatedly raised her hand, volunteering to be “let go” on the hopes that she’d double up on the severance plus the salary from a new job. If I had a chance to “double-up” on severance plus the salary from a new job, that would easily make it the highest grossing year of my career to date. (Retirees at this company get some pro-rated fraction of their annual bonus, depending on what fraction of the year they had worked. I'm not sure if laid off workers got this deal, too. But even without that, these sounded like extremely generous severance packages.) 

I recall reading a Reddit thread. It was about bad employees, with some posters claiming to be the bad employees. One person confessed to being badly under-qualified for this job. Some other commenters chimed in with "Have some self respect and leave on your own terms." Some others piped up with, "Wait for the deed to be done to you so you can get severance." At the time I had thought this latter strategy was the ultimate slacker-loser approach. I was thoroughly in the "leave on your own terms" camp. If you're a drag on your employer, have the honor and honesty to recognize that and find a job more your speed. If the fruits of 1/3 of your waking hours aren't being appreciated, that's just not a fulfilling career (especially if they're unappreciated because they're not doing anyone any good). Anyway, hearing about the generosity of the severance packages made me slightly more sympathetic to the "wait to be canned" argument. I still think it's a bad idea to waste a lot of time in such a job if it's a poor fit for you, but if you think a big round of layoffs is around the corner...

Always be looking at job postings. Look at the skill sets required, look for what’s available in your area, look to see how far you’d need to move to take a job similar to (or better than) your current job. Keep your resume up-to-date and ready to go. Also, make sure you have a copy of it on your home computer. I know of someone who had a resume and kept it up to date, but never had the good sense to e-mail it to himself. (His boss graciously e-mailed it to him when he needed it.) It might not be bad practice to actually apply for and interview with a new employer once in a while, even if you’re not seriously considering switching. Before my interview with my current employer, I had done a bad interview with another company. I think it was a nice "trial run", and it prepared me for the next interview. 

If you know people who were let go, an easy thing you can do for them is give them a recommendation or endorsement on LinkedIn. I've done this for a few people who I used to work with. It's not hard, and it'll be appreciated.

It was very helpful for me to hear my former bosses talk about times they'd been laid off. Several years ago there was a round of layoffs at my company, and my boss told me that he'd been laid off twice before at previous companies. His boss also told me he'd been on the receiving end of a layoff. It's just something that happens. Companies get reorganized or downsized. These people with successful careers had been through it and dealt with it.

Some people get very emotional when a round of layoffs happens. They see their friends losing their jobs and perhaps worry that it's going to happen to them soon. They sometimes express confusion. "How could this person be let go? Her project was making so much money for the company!" I coldly and logically realize that some kind of cutting is necessary, and that these co-workers might have mistaken impressions of their colleagues' productivity. Even so, it's probably not a good idea to interrupt someone who is responding emotionally. Just let them carry on. Some people aren't primed to accept the message, "Any one of us, including you, could lose our job at any moment. And it might even be the right thing for our employer, fiscally speaking." It's a sad reality, but sometimes it's necessary.

Stay safe out there.

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