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Covid, World Economy And Layoffs

As I see it, since the beginning of Covid-19, things seemed to be have gone from good/great to bad and with time things are turning worse and worser. Indeed a painful thing to witness and experience for all of us. 

During this time, we also witnessed a season of "the great resignations", times when the leaders of affected companies cried out loud about talent being poached from their companies and the recruiting companies that poach talent lamenting about demand for disproportional compensation hikes. Sitting on the other side of the table, I changed the way hiring happen in our company to hire the right talent at well deserved hikes. Note that I use the word deserved hike instead of calling it decent. By well-deserved hike I mean a compensation that doesn't break team parity and that the candidate knows well what he is signing up for during the course of his hiring. I call this sticking to fundamentals and it worked to my benefit.

"What about firing/layoffs?" you ask. I'll get to that, but before we get there let us see how big tech companies have responded to this crisis.

Google admittedly laid-off over 12K employees worldwide in early 2023 and the key here is how its CEO, Sundar Pichai, took responsibility for it, all upon himself and how he treated the affected employees calling them "incredibly talented people". Do check out Sundar Pichai's email last year that he had published openly for the sake of transparency. And later that year, he responded to a query on this subject with words, "This is difficult for any company to go through. At Google, we really haven’t had a moment quite like that in 25 years. It became clear if we didn’t act, it would have been a worse decision down the line. It would have been a major overhang on the company. I think it would have made it very difficult in a year like this with such a big shift in the world to create the capacity to invest in areas...Clearly it’s not the right way to do it. I think it’s something we could have done differently for sure."

Microsoft's Satya Nadella in the beginning of 2023 announced that roughly 5% of the workforce (that is about 10K employees) would be let gone. His words in that communication are note worthy for any aspiring and existing leaders alike. I strongly believe, the foundation to leadership success is trust, transparency and respect for its team.

Amazon laid-off its employees but shutting down the entire divisions or down-sizing them significantly or Role eliminations that they felt weren't yielding expected results. Amazon's CEO, Andy Jassy hinted the divisions that would be most likely be affected hinting its workforce on what is coming. No blaming of its talent here. Instead he goes about citing the market uncertainty and calls this a difficult decision. As an aside, Justin Garrison has an interesting post on this subject and on the impact this has on AWS for the techies to munch.  

A lot of other companies weren't this transparent in its layoffs. Most of them blamed its employees for their poor performance without any shred of evidence, prior feedback and worst of all giving its employees the worst shock of their lives. This is terribly wrong and in my humble opinion unethical too. Notably, Cloudflare too seemed to have fallen in this unfortunate side of the story that I have come to known a few days back when I stumbled upon it in Twitter, where in this video Cloudflare's employee recorded her getting laid-off over a 15 minute video call with her CEO apparently.

No two companies and their circumstances are same but that is no reason to being rude to your own employees. I wonder what happened to the terms like "employee experience", if not "employee care". Even when parting ways with an employees, how they go through it makes a big deal of difference to the brand of a company. We sure can learn some important lessons from other's stories; after all, a wiseman learns from other's experience - mistake or otherwise.
How did I handle layoffs pressure? I for one, personally care for my team's welfare and in their welfare and upliftment, I bet on the business results that we as a team deliver. I can state with immense delight that I managed to resist to succumb to the temptation of yielding to the pressure of firing any of my team members under the guise of poor performance or rude surprise.  I have had tough conversations with my leadership in the past couple of years in the lines that - layoffs have an impact on morale and thus delivery. Engineering leaders that are hands-on engineering know why it is so - the business product in use with repeated churn becomes a big ball of mud, faster than the time one can imagine.

I would put forth the below guidelines as food for though before the leadership thinks of firing its workforce:
  • The leadership with greatest stake (often the CEO) should own it and communicate it too.
  • Build transparency and improve exit experience. Remember, every ex-employee is your brand builder or breaker. You determine that with what he experiences during his/her exit. Every leader has stake in this.
  • If you are downsizing your team, you shouldn't be thinking of expanding it again for another 3 to 6 months. It is the same with role redundancy as well. Otherwise, it reflects poorly of respective leadership's capability.
  • Where it is not about market conditions but genuinely performance issues. This can't and shouldn't be a surprise to a team member. Better the feedback mechanism and introduce Performance Improvement Program. Often, it mitigates sour exits. If you talk of large scale performance issues, it reflects badly of respective department's leadership - how did they miss it for long? Be mindful of your actions!