How common is it for employers to lay off employees for non-performance reasons

4 points by ranjha 255 days ago | 8 comments

I see a lot of news regarding big corporations like Google, Microsoft, etc laying off employees due to 'strategic reasons', 'overhiring', etc.

I wanted to understand how common is it in the industry? Do startups and mid-sized companies do it often?

If this happens very often, is it then wrong from employees to treat employers instrumentally. That is, should we frown upon people who leave after a few weeks of joinig a company because they got a much better offer? Or they did not join the company whose offer they had accepted because they got a better offer?

Founders of HN, what do you feel about this?

VirusNewbie 255 days ago |

From my experience being in tech over 20 years (from my high school days until now) Large companies that aren't growing do this all the time.

IBM, Verizon, AT&T, HP, etc all would hire in new areas and at the same time 'dissolve' old divisions. Sometimes the 'laid off' folks could scramble to find new teams.

The growing FAANG companies would rarely do this on as large of a scale, but it did happen, teams would be dissolved and sometimes every employee would have to find a new position internally or get laid off. For growing companies there are usually so many open spots on other teams, that it's less of a risk.

For companies that aren't growing rapidly, this often means lots of people get laid off.

>That is, should we frown upon people who leave after a few weeks of joinig a company because they got a much better offer

Business is often not solely a 'morally correct' thing or not. Sure it's not morally wrong to be a mercenary, but it may rub people the wrong way. If some manager fights to get you on their team, spends time onboarding you, then you leave for a slightly better offer, they will remember that.

Conversely, Iv'e worked for people who were very happy for me when I 'graduated' to larger and more impressive companies, and no hard feelings were had.

bruce511 254 days ago |

Let's leave aside the Googles of this world, and focus on mid and small companies (as you asked.)

I think one of the cores to answering this is funding- as in "where do the funds for your job come from?"

So a VC funded startup has a model with a very small number of customers (ie VCs). Failure to make a sale (round of investment) means layoffs.

Businesses which have a small number of valuable customers are in the same boat. If Kodak is your big (only) customer and Kodak goes under...

By contrast, say, a healthy business with positive cash flow takes some of that cash to fund a new Sales position. (Assuming competence as you asked) that job is pretty safe. Yes markets fluctuate, yes external events can happen (like Covid or Tarrifs) but hopefully you don't succumb to that.

Or take a small company, excess cash flow, decides to branch into a new space. Jobs in that new space are vulnerable until returns start flowing. Once cash flow increases to cover costs the jobs there become a lot more secure.

Lastly I'd say that speed of growth is directly correlated to speed of shrinking. Businesses that grow hundreds of jobs a week (in the good times) are more likely to shed hundreds of jobs a week in the bad times.

austin-cheney 255 days ago |

Common.

A trillion years ago when I was at Travelocity and layoffs came down senior leadership wanted to be fair. Critical positions to the business were safe. For everyone else a quota system was used to normalize headcount reduction by team. Level of leadership and performance were secondary to the quota.

I had a nearly career ending shitty annual review just before the economy tanked. My job was super safe. I was a front end developer for a major web business before jQuery became popular. They could not find competent front end developers. It’s like they didn’t exist anywhere. For the most part this remains true today but everyone pretends otherwise after hiding behind these colossal frameworks and tons of abstraction layers. Now there is no reason to really know how to do that work because imposter syndrome is baked into the baseline.

haute_cuisine 255 days ago |

People invented unions to prevent things like this.

Blackstrat 254 days ago |

Of course they do. It’s a necessary evil. For most of us, it wasn’t fun to do, nor was it fun to be on the receiving end. I’ve been on both sides. In my experience, layoffs have usually occurred for good reasons, occasionally existential reasons. As for employees finding better jobs? Best of luck to them. Economic conditions and opportunities change. Take advantage of it.

Chyzwar 255 days ago |

If you are CEO of a large company, and you see a huge uptick of ecommerce during covid, you could:

  - Expand aggressively and compete for top talent
  - Wait and possibly miss opportunity if trend continue

Most CEOs decided to expand. For example meta hired around 30k people from 2020 to 2022.

If you see end of ZIRP, slowdown and inflation and you actually overhired as CEO what you should do?

  - Keep employees locked in roles that are not needed?
  - Let go people that are not needed and hire for what is needed.

Meta let go most e-commerce positions and support and now is aggressively hiring AI specialists.

If you are hiring, and you see someone that cannot hold a job for more than 6 months, it is red flag. In capitalist system, employees are just to provide labor in exchange for wages. Nothing more, nothing less. Problem in US is that both retirement and healthcare is often provided by employer, creating this weird illusions of long term caring relationship.

colesantiago 255 days ago |

Very common.

Sometimes employers lay off people because reasons.

apothegm 255 days ago |

I’ve had to lay people off to extend runway. I’ve also been laid off to extend runway. It SUCKS. It sucks to have to do, and it sucks even more when it happens to you. But sometimes you have to do it so the rest of the company can stay employed.

When megacorps do it to boost profits when they’re already profitable, that’s shitty. But also, that’s how we do capitalism in the US — the company has a greater obligation to shareholders than to employees.