18 June 2012

Why you got laid-off...

Lay-offs are so common in today's landscape that my children play pretend games where one kid is said to have been laid-off or another is the boss and gets to say, "You're fired!" Maybe we owe some of that to Donald Trump. Either way, it's curious vernacular for the kindergarten playground.

It got me thinking about the constant churn of cuts-and-more-cuts we have seen in the IT industry since the late 1990s and everything I have learned about who lands on The List and why. Here's what I can share with you...

First, we should clarify that getting laid off is not the same thing as getting fired. In a lay off, you receive a severance package and reassurances that it's not you, it's me (or rather us). When you're fired, your employment is abruptly terminated because your employer feels you did something really bad. Maybe you did, maybe you didn't, but either way, you got to walk out the door with the security guard.

I'm here to talk about lay-offs. There are two kinds:
  1. In a COST SAVINGS PLAY, an organization is asked to cut X% of their people costs in order to grab a quick bottom line fix. (This is a lazy man's management strategy - and a very popular one at that.) Leaders are given a target and they must identify enough people to meet that cost reduction target. If you find yourself on this list, it's because your performance reviews have been sub-par, you're in a job/team that isn't valued, no one knows quite who you are or what you do, or they know you and just don't like you. Feel free to be offended. 
  2. In a PRODUCTIVITY PLAY, an organization undergoes some sort of change intended to enable greater efficiency in the way it operates. For example, teams performing similar functions may be merged and streamlined, a system or tool may be implemented that automates certain procedures, or work may be consolidated and given to employees in a lower cost location in, say, southeast Asia. If you lose your job for any scenario like the one above, you honestly should not be offended. Top performers land on lists like these for living where they live and earning what they earn. (I know YOU don't think you earn a fat salary, but your replacement in Bangalore would disagree, no?) Don't be offended. It is what it is.
For whatever it's worth, this is the process I have seen in every high tech firm I have worked for or consulted with. It's pretty consistent.

Thoughts?