Wednesday, December 10, 2008

Random thoughts on the Yahoo layoffs, and layoffs in general

Today is layoff day at Yahoo, and I ran across some direct evidence of it from this tweet:

my manager got laid off and so did i, just now

This was tweeted at 9:49 am California time by Twitter user pollyr, also known as FriendFeed user edythe. The reaction, particularly on FriendFeed (where edythe is known as THE liker, having "liked" over 39,000 items on FriendFeed), was sadness. See the FriendFeed comments here.

Layoffs operate at both a macro and a micro level. The company has a financial target that they have to meet (in Yahoo's case, US$400 million), and this gets translated into a single headcount reduction number...then that headcount reduction is distributed in a way that is fair and wonderful and makes everyone happy...well, not really.

I am, um, familiar with one company that has an underperforming division, but has chosen to spread its layoffs among all divisions. People in the "good" divisions wonder why they're getting penalized, while people in the "bad" divisions note that people in the good divisions weren't complaining when the underperforming divisions were making tons of money.

And there are questions about whether Yahoo is shooting themselves in the foot with the people that are being laid off. Here's a quote from something sent to Kara Swisher:

“Yahoo has made a lot of stupid moves, starting with turning Microsoft down, but to cut the high caliber and quality of people that they are cutting now–basically choosing quantity over quality–is an abomination. How’s the old saying go: you don’t mess with success. Yet, that’s exactly what Yahoo is doing, and is only going to become even weaker than it already is.”

I wrote about layoffs over four years ago and quoted from a (no longer available) article:

A study of 5,479 "changes in employment" found that those companies that simply reduced headcount didn't achieve much profit....Consider the impact of downsizing on the emotions of those who keep their jobs, whom the company must rely upon to shoulder more responsibility....At first, people feel relief that it wasn't them. Then they feel bad for feeling good while others, whom they know and care about, suffer. Then comes anger over what happened to their colleagues. Finally they fear future job cuts may affect them. "If they've done it once, they can do it again" is the thinking. None of these feelings drives greater efforts....[Planners] might even expect that fear would increase motivation, and it may in the very short term. In the long run, anxiety and anger sap energy and creativity. Quite often the company winds up with a compliant work force, one that will do exactly what it is told but not one that does the extras nor takes the risk of creative thinking. High fear and creativity are incompatible.

One also wonders about the lengthy process. Debbie's reaction to being laid off:

I can't say I was surprised, and am a bit releived after having it hang over my head since our last all hands before Halloween (honestly, announce you're going to lay off 15% of your headcount before the end of the year and then take 6 weeks to do it?).

Oh, and it's probably illegal to say this, but these layoffs are occurring just before Ha- ... Ha- ... well, you know ... and Chr- ... Chr- ... yeah, and that too. And I'd better not say it - Google News could find no items with the terms "yahoo layoffs" hanukkah christmas, so I guess it's not important. But it was important to the Tribble Ad Agency back in October:

Expect massive layoffs in December, and honestly brace for impact. Do not go haywire buying Christmas / Hanukkah / holiday gifts. Because you will be facing a bad day in the next few months.

See this is why it’s really going to be bad, all these layoffs will take place in the last 6 weeks of 2008. The market will be flooded with resumes going to companies that are in the process of laying off people. There are no jobs to be found during that critical moment.

In my personal case, I've been in a "Chicago Cubs"-like situation - I'm not adversely impacted because my division is in the midst of being sold. We'll see what happens.

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