What’s Different About Layoffs Today

Those findings haven’t changed in the last four years. What’s different now is the larger social landscape in which today’s layoffs are unfolding. To make intelligent and humane staffing decisions in today’s economic turmoil, leaders must first understand three recent trends.

Word travels faster.

In the traditional pre-pandemic office environment, news of a reduction in force might have spread as workers saw the upset faces of their colleagues emerging from an unexpected meeting with their boss.

Today colleagues may be dispersed, but a single Slack or Teams message can simultaneously and instantly alert tens of thousands of employees around the world to news of a layoff. Whether companies want it this way or not, communication is simultaneously internal and external, spreading from employees to social media, journalists, and trade media that serve specific industries and the people who work in them.

Corporate decision-making is under a microscope.

Businesses have always needed to justify their actions, but today corporate reasoning is subjected to wider scrutiny in both traditional and social media. This is especially true in tech, whose products and services are deeply embedded in our daily lives and whose leaders have achieved celebrity status. A quick glance at any social media platform will reveal that customers are quick to share their strong opinions about the strategies companies pursue.

Stories about horrific layoffs have always been dismayingly easy to find. I once heard about a company that divided employees into two groups. One room was filled with people who were told they were losing their jobs. Just next door — and so loudly it could be heard — were the survivors, who were being told: “You are winners! You are why we can do even better!”

Today, poor treatment of employees looks short-sighted and is contrary to companies’ own interests. In the past, a company’s decision to eliminate positions may have been protested by a small group of labor rights advocates. Today, thanks to social media, anyone can challenge workforce reduction decisions, and ask, “Can’t they see that no one will want to work for a company that does that?”

The pandemic showed that companies have other options.

In the early months of the pandemic, some companies announced mass layoffs. But not everyone — Marc Benioff publicly pledged that Salesforce would enact a 90-day no-layoff policy [TS: Benioff promised not to make “significant” layoffs. Can we tweak this to, “pledged that Salesforce would make no “significant” layoffs for 90 days, and asked other companies to commit to doing the same.”?]. Many companies, including Starbucks, Bank of America, and Morgan Stanley assured staff that, barring a performance issue, jobs were secure through the end of 2020. Other CEOs made similar temporary no-layoff pledges to help stem workers’ anxiety.

These companies announced a different approach, including salary reductions for executives, furloughing employees instead of terminating, and even sometimes forgoing base salaries altogether for certain executives. Some CEOs offered grants to employees facing financial hardship or gave workers extra PTO to help ease increased demands of caregiving.

In taking these actions, CEOs communicated that employees mattered. But these statements also left leaders exposed to charges of hypocrisy when many of them resorted to staff reductions later in 2020, despite record profits and stock buybacks.

Read the full report here