Under the guise of the corporate layoffs trend, some organizations are downsizing poor performers, malcontents, time-wasters, toxic rumormongers and troublemakers, vanity hires, highly paid professionals and those fighting against returning to the office.
In today’s litigious society, laying off workers could end badly for companies. The terminated employees may file claims with the United States Department of Labor asserting that they were let go due to discrimination or biases over race, religion, sexual orientation or age. It could become a public relations nightmare, as the company, its executives and managers would be pilloried on social media and risk losing their jobs for being perceived as racist, ageist or sexist.
The ‘Everyone Is Doing It’ Excuse
There is a domino effect. Since many firms are laying off workers, it’s become socially acceptable for businesses to do the same. Once layoffs become socialized, it’s easier for other companies to trim their headcount as well. The wave of firings is offering businesses the option to let go of workers under the cloak of “downsizing” to be prudent. They don’t have to worry about claims of age, race or other discriminations. After all, they are just being cautious and trimming expenses.
How Did We Get Here?
The war for talent during the Great Resignation pushed businesses to hire and retain workers, even if they didn’t meet all necessary job requirements. Managers realized that if they didn’t recruit and onboard people quickly, they’d lose out to their competitors.
If seats were left empty, the workload would be dumped on the rest of the team. After a while, the staff would get frustrated over all the extra hours worked without a pay increase and start updating their résumés and contacting recruiters.
Flush with cheap and accessible capital, while also confronting a continual war for talent, companies stocked up on workers when they had the opportunity. Heads of departments get budgets for headcount. If they don’t use it to hire, management will believe they don’t need additional personnel and will cut the funding for the following year.
This prompts managers to hire, even if the quality of the candidate isn’t great, to ensure that they will have the financial resources to hire in the future. Since it’s been hard to find talent, companies would settle on candidates who don’t possess all the requirements, but at least have a pulse and could add some value.
Vanity hires are a dirty little secret. To make themselves seem more important, managers will hire people for the sake of hiring. They are not fulfilling a real need, but are involved with grunt work. Having a big team makes the supervisor feel influential and powerful.
Cutting The Fat
Now that the Federal Reserve has turned off the spigot of printing money, companies are forced to be better stewards of capital. Unfortunately, the go-to response to cost cutting is to downsize workers, enact hiring freezes, allow attrition without replacement, hire contractors instead of permanent employees and rescind job offers.
When the new reality hit, people who hadn’t really added much value were released without severe repercussions. Once the ball gets rolling, companies jump on the bandwagon. It becomes socially acceptable to put out a press release saying they’re downsizing in anticipation of difficult times ahead. Leadership is then viewed as being sober, thoughtful fiduciaries and making the tough decisions to keep the company afloat.
Why This Trend May Last
As interest rates rise, it’s more costly for companies to borrow money to scale their businesses and keep them running. Executives grew complacent over the last decade, as the Fed kept interest rates artificially low.
The access to cheap capital fueled the everything bubble. The stock market skyrocketed, as people stayed at home and traded meme stocks and cryptocurrencies from their bedrooms with their stimulus checks provided by the U.S. government.
Venture capitalists, benefiting from low rates, lavished billions of startup companies that reached unicorn status without any meaningful revenue or existing profits.
The U.S. is in a more austere economic environment. Companies can’t afford to hold onto nonperformers. They have to watch every dollar that’s spent. Managers will be more critical of job applicants and employees.
The slackers, troublemakers, poor performers and those fighting against returning to the office may all be rounded up and let go.
The official reasons offered by companies center around the need to reign in expenses, due to the uncertainty caused by the Fed’s efforts to raise interest rates and cool down the economy to beat inflation. The reality is that leadership now has the chance to make job cuts without much pushback or bad press, as long as they manage it empathetically.
How To Avoid The Chopping Block
Go into the office every day. You want to be seen and heard. With fewer people milling about, you can gain access to high-level executives. The proximity bias of being in the office will make you stand out compared to your peers who are at home and only noticed on video calls with dozens of other people once in a while.
Have a one-on-one with your manager. Inquire as to how you can better help them succeed. It may be uncomfortable, but ask for a performance review to know where you stand. If constructive feedback is offered, run with it and do what it takes to exceed expectations. Report back with the tasks you’ve accomplished. Let them know that you love working at the company and would like to stay and advance within the organization. While others may complain, shine by being an enthusiastic, positive and motivated role model.
Just in case, have a backup plan. Update your résumé and LinkedIn profile. Seek out recruiters and career coaches. Get in touch with your network to find out about potential job opportunities. If you’re slated for a layoff, you don’t want to get caught off guard and need to scramble from scratch.
Source: Forbes
