Getting laid off can be a traumatic event. The loss of a job and concerns about financial insecurity cause stress and anxiety to affected workers and their families. To compound the problem for people in between jobs, prior to layoff announcements, companies like Meta, Salesforce, Amazon, Google and other marquee names discussed or encouraged letting go of low performers.
Being deemed a low performer—a pejorative term that has a connotation of not meeting expectations and being considered in the lower end of the workforce—is a red flag signaling you may be selected for the next round of downsizing. The people labeled as low performers are put on performance improvement plans, which is considered the gateway to being exited from the company. Others are subjected to the much-debated stack-ranking process. If they are measured as performing lower than their cohorts, they’ll likely be nudged out the door.
The Bias Against People Who’ve Lost Their Jobs
Unfortunately, some human resources professionals, recruiters, hiring managers and interviewers still hold biases and preconceived notions about people who are laid off. They contend that the person may have done something wrong, lacked the ability to achieve the required results or was a low performer. Ten-plus years later, as an executive recruiter, I vividly recall several hiring managers chastising me over a candidate submission, saying, “There must be something wrong with the person since they were the one chosen for termination.” They demanded, “I don’t want to hire the person who lost their job; I want the person who has a job!”
Layoffs, Hiring Freezes And Intense Competition To Find A Job
The big problem is that unrelenting layoffs and a hiring slowdown for white-collar workers, along with a stigma attached to so-called “low performers,” will make it appreciably harder for this targeted group to secure a new job.
According to Layoffs.fyi, about 340 tech companies laid off 101,807 workers in 2023. This does not include the thousands of people separated from the payroll in industries ranging from media to automakers. The layoffs at Meta, Amazon, Microsoft, Google, Salesforce and other tech companies grabbed the headlines. For the last decade, these organizations seemed unstoppable and immune to the vicissitudes of the marketplace.
White-collar, college-educated office workers are facing a white-collar recession. Amy Legate-Wolfe wrote in Yahoo Finance that economists are concerned that tech, Wall Street and other sectors have been and will continue to be hit with job losses. She contends that the “laptop class” or remote workers that benefited from the pandemic are now at risk due to concerns of a recession and a new era of companies leaning into fiscal austerity to assuage their shareholders and investors.
In addition to layoffs, businesses don’t usually make public announcements, but stealthily enact hiring freezes, holding off on recruiting or bringing new people aboard. The downsizing and pauses in hiring create tensions in the job market.
More than 100,000 white-collar professionals losing their jobs sends shivers down the spines of the workers who survived the cuts. Those who lost their jobs may face financial difficulties, especially with record inflation, high-interest rates and the rise in prices of everything from gas to food. There is another less-reported matter: how will the laid-off professionals be perceived in a job market saturated with applicants and companies holding off hiring, as they’re firing people?
The ‘Low-Performer’ Label Stigmatizes Workers
Salesforce CEO Marc Benioff asked on the company’s Slack channel if employees hired during the Covid-19 pandemic were working hard enough. The CEO wanted to know why there was lower productivity from young, newly hired remote workers. He then went on to cut 10% of the workforce. Business Insider reported that managers were called to rank employees and point out the bottom 10%.
Since the layoffs were highly publicized, it’s reasonable to conclude that procuring a new job could be more challenging for many former young Salesforce employees, as this group was portrayed as not being top-tier producers. Sadly, other companies have acted similarly. These laid-off workers will enter the job market with scarlet letters on their chests.
Tech-adjacent real-estate brokerage Compass reportedly targeted the firm’s “lowest-performing” employees for layoffs. The Los Angeles Times reported, “For years, white-collar employees at Amazon.com Inc. have accused the company of using opaque ‘rank-and-yank’ performance reviews to periodically cull its workforce.” The policy of stack-ranking workers is much debated within the tech sector and is strongly denied by corporate leadership. Despite the issue, Amazon allegedly pressured managers to identify low-performing workers before laying off 18,000 office workers.
In a town hall meeting, Meta CEO Mark Zuckerberg warned employees about the challenging economic environment and the need to slow down hiring and cut costs. As part of the new fiscally responsible plans, the social media giant will increase the expectations for its employees, and offered a veiled threat, “I think some of you might decide that this place isn’t for you, and that self-selection is okay with me. Realistically, there are probably a bunch of people at the company who shouldn’t be here.”
According to the Information, Meta’s vice president of remote presence Maher Saba told managers to identify people on their team who “need support” and “move to exit” poor performers “who are unable to get on track.” The Washington Post reported that white-collar tech workers are worried about being placed on performance improvement plans, ultimately leading to layoffs.
Google CEO Sundar Pichai, foreseeing the challenges to his business, informed his team members in an all-hands meeting in July that they must step up their productivity. He advised them that the halcyon days of plenty were over. The tech giant and its peers now find themselves in a new hostile environment that will cause the industry to aggressively cut costs and find ways to work more efficiently with fewer workers.
Before Alphabet, the parent company of Google, initiated layoffs, it allegedly launched a ranking system and performance improvement plan—Googler Reviews and Development (GRAD)—that was suspected to ease out 10,000 employees. There was an overarching worry that if employees were rated as poor performers, they could be shown the door. There were additional concerns that this new performance system could use the ratings to avoid paying bonuses and stock grants.
Google managers were asked to rank 6% of employees—representing 10,000 people—as low performers, compared to the traditional 2%, according to the Information. In a prior announcement, supervisors were told to cut down on the inflated ratings.
Chris Pappas, a Google spokesperson, said in an email that the program was implemented to “help employee development, coaching, learning and career progression throughout the year.” Pappas added, “The news system helps establish clear expectations and provide employees with regular feedback on their performance.”
Source: Forbes
