(1) you are definitely going to do a layoff
(2) you have not yet decided but are considering it
(3) you are definitely not doing a layoff
In the past, HNers have mentioned that if you admit you're going to lay people off, then your best performers will leave. Is that true? If so, what should companies say in order to be truthful and to help keep the company from falling apart?
Relatedly, how does a company credibly promise not to do layoffs, to put people's minds at ease?
If it's possible you'll do layoffs, says it's possible that you'll do layoffs, figure out what you wanna do, then do that.
If you know you're not gonna do layoffs, say you know you're not gonna do layoffs, and then don't do layoffs.
If people will leave because you say there will be layoffs, they would leave even faster if you didn't say you'll do layoffs but then do it anyway.
If people invest their lives in your company (relocating, working overtime, etc), they deserve the honest truth about what's happening. Particularly in a world where there's a high demand for tech workers.
You are not simply entitled to your best performers. You are in a relationship where they provide their services for money. Staff are not property.
Restricting information to influence their decision making is poisoning that relationship.
They also poison the employee's relationship with the next employer. Once burned, it is a little harder to trust the next employer.
Any kind of layoffs will cause your best performers to leave regardless of whether you tell people ahead of time. It's a strong signal that the company is in survival mode instead of growth mode, which at least means raises and bonuses are in doubt and at worst means the company is going under soon. It's better to accept that you're going to lose more people than you plan for and deal with the fallout as best you can.
Company credibility is shot when you do any lay-offs, but individual credibilty can survive one round. There is no way to maintain faith and trust in the organization AND do lay-offs, so you should give no notice until preferably after the fact.
Let's say your employee walks up and they tell you that "my life situation is uncertain going forward, my ability to deliver on my end of this bargain may be limited and outside of my control."
On the other hand you have the resume of someone you can hire, they are willing to agree to a contract where they will deliver more productivity than the previous employee, problem is you can only employ one of them.
If feeding your family depended on the productivity of the person in that role, who do you go with?
1) The company is in bad shape, and the layoff is a Hail Mary play to try and delay the inevitable long enough for a miracle to happen
2) The company is in fine shape, but for whatever reason, has done an honest self-assessment and determined that they've got more people working there than are necessary to continue operating (and, if they're really being both honest and thorough, has done at least some due diligence to identify the genuine low performers)
3) The company is in fine shape, but the higher-ups and/or shareholders think they should be getting more money, so they're cutting costs and pocketing the difference
Two of those three are excellent cause to leave, whether or not the layoffs are announced ahead of time. Many cases of #2 are also cause to leave, when they do not do the appropriate due diligence and lay people off indiscriminately or according to nepotism/who plays golf with the right people.
If your best people will leave upon finding out that you're laying people off, then they will probably leave whether or not you announce it ahead of time like decent people—the only question is when.
So basically, you're compromising on honesty and basic decency in order to maybe buy yourself a few more months.
> Relatedly, how does a company credibly promise not to do layoffs, to put people's minds at ease?
In both cases: A hard, legally binding commitment.
That said, a company that promised employees no layoffs should not be able to do layoffs and/or be subject to fraud charges.
The answer is always "no". You won't do layoff.
Not sure if bitpanda is a public company, but it is surprising people don't understand the basics like this.
Think about it for a second, regardless of if your employer intends to do layoffs or not, the moment people fear for their jobs, they'll spend more time looking for work.
I prefer the quick rip the Band-Aid off lay off, give me a bit of severance, let me shake the hands of upper management and we can all move on for our lives
So if a company says "Just so everyone know, the entire market is experience a tough time, and so are we, so right now we're evaluating our options, don't do anything drastic", people can plan around that. But if the company says "Don't worry about what's happening around you, we're super fine and would never do layoffs", people start to plan around that.
It's a bit silly, and people probably shouldn't trust management/the company to have their best interest at heart, but as humans we do trust others (probably more than we should).
A sudden layoff can happen to anyone.
That feels to me like a pretty big layoff, not just a headline trying to make a number sound big.
We laid off 20% of the staff and a few days later came “Why it’s a great time to be working at X Part 2”.
They did not really have anyone good to manage their finances.
Anyway, the article mentions:
> He [chief product officer] said the company was "very well funded" with no liquidity problems. While he noted that its 2022 financial results were "below budget," he said that this had been caused by macroeconomic conditions, including a supply crisis and the Ukraine conflict. The executive urged employees to focus on product and tech infrastructure improvements in preparation for the "next bull run."
This is exactly the same line given by every single business. Even the White House does it. This is due to Ukraine, supply shock, and macroeconomic factors. As if this didn't matter. As if that meant that whatever is happening can be ignored. Don't worry, nothing to see here. It's just special, highly unusual circumstances.
Except it does matter. No matter how well you wear the turtleneck eventually reality matters. Mean-reversions from bubbles matter. They are inevitable and they are painful. It's never "contained," no matter how much leadership wants you to believe it. Gear up.
Startups that have CEOs with this infatuation with the Steve Jobs turtle neck and jeans look are essentially playing the scammer and are taking part in the delusion or attempting to hypnotise VCs by cargo-culting and re-creating his dark reality distortion spells.
Crypto firm Bitpanda lays off around 20% of its people - https://news.ycombinator.com/item?id=31867839 - June 2022 (117 comments)
You just have to keep your eyes open all the time, make a judgement about how much sense things make, and make your own decisions on when things seem off.
If they knew of the layoffs and lied Bitpanda must be punished for it. Many employees may have made decisions based on that lie.
being at a company for 16 years, i have learned:
1)everything is status quo, until one day it isnt.
2)there will be no changes, till there is change one day.
3)there will be no layoffs, until one day there is...
alot of times the people working above you directly dont know/are aware of pending doom.
it is possible at the time the CPO made that statement, it could have been true at the time or that they were aware of that there would be no layoffs.
Permitting spokespeople to lie is not only toxic, but explicitly removes the equality of information necessary to a functioning free market. It's in everyone's interest to punish it.
In my experience before you see mass layoffs you'll also see some of the following: hiring freezes, benefit cutbacks, travel bans, infrastructure cost cutting, office closures, revamps to employee evaluation processes, etc. Without at least some other factors I wouldn't assume a company is considering layoffs just because they use the word.
If you are laid off in much of the US anyway, you are eligible for unemployment in case that's needed. That might help someone with less assets in a protracted dry spell.
Also very common, you give up severance pay if you quit. If you can afford some timing risk, IMO it's best to have your scope up and be looking just in case, then wait until pushed. The severance will basically be a bonus if you're rehired quickly since you should have some leads lined up.
There have been times in my life when that advice was 100% true, but, not every time.
I really can't imagine why anyone would think that's a better look. If someone dodges a question, it's safe to assume that the truthful answer would look bad for them. That's WHY people dodge questions.
The overlap between people who think very highly of themselves and your top performers may not be 100%. It's probably quite a bit less.
The employees, on the other hand, is required to trust the company. It's a condition of employment. For example, you are only paid after the work is completed - this requires that the employee trusts the company to make good on the wage. Of course, this is legally mandated - but sometimes, despite legal mandates, unpaid wages exists, esp. when company is in financial trouble.
It's an asymmetrical relationship.
If your trusted friend says "I'm in trouble and I need a loan", you probably believe them. If a spam email says the same thing, you probably won't.
Employers and employees are on an equal footing in terms of this type of trust. Whether you're speaking to your senior manager or to your new hire, you need to establish that your words carry factual meaning. Fail repeatedly at that, and you'll end up on a mental spam filter.
When Enzersdorfer-Konrad says "There will not be any kind of massive layoffs within Bitpanda", the impact of that message on employees is proportional to how much trust Enzersdorfer-Konrad, and Bitpanda, have earned. If they have a record of lying and deceiving their employees, then such announcements are complete noise. There's not even any use in uttering them.
Telling such a blatant lie -- or, to be charitable, an overconfident wrong prediction -- costs credibility that has to be earned back the hard way. The next time Enzersdorfer-Konrad says something, even if he really means it this time, it won't carry weight. He'll have to build, or rebuild, a strong record of honesty before people listen to him again.
I think I may see the problem.