Latest / Roast the Post Podcast / Layoff Limbo: When Job-Cut Warnings Become a Trap | Grounds for Discussion

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Layoff Limbo: When Job-Cut Warnings Become a Trap | Grounds for Discussion · Roast the Post Podcast

• 0:14
  SPEAKER_01: okay, so I was looking through workplace headlines as one does
• 0:19
  SPEAKER_01: when they co-host podcasts about workplace stuff.
• 0:25
  SPEAKER_01: And one, I mean a few stood out to me, but this one in particular.
• 0:31
  SPEAKER_01: I really want to know your opinions on it because this one feels a little bit
• 0:35
  SPEAKER_01: closer to me, and I'll explain why when we get to the discussion point.
• 0:40
  SPEAKER_01: But here's the headline.
• 0:42
  SPEAKER_01: Corporate America is putting its staff in layoff limbo.
• 0:47
  SPEAKER_01: And this comes from Business Insider like October 6th of this year.
• 0:53
  SPEAKER_01: A little bit of context.
• 0:55
  SPEAKER_01: A layoff practice is emerging where companies announce that job cuts are coming,
• 1:00
  SPEAKER_01: but don't immediately tell employees who will be affected.
• 1:03
  SPEAKER_01: Where the cuts will land, or even exactly when they'll happen.
• 1:07
  SPEAKER_01: Nike and Meta and GitLab have reportedly used versions of this approach.
• 1:12
  SPEAKER_01: The charitable argument is that advance warning gives employees time to prepare.
• 1:18
  SPEAKER_01: The less charitable interpretation is that prolonged uncertainty may encourage
• 1:22
  SPEAKER_01: people to
• 1:23
  SPEAKER_01: leave voluntarily, potentially reducing the number of formal terminations an
• 1:27
  SPEAKER_01: employer
• 1:28
  SPEAKER_01: ultimately has to make.
• 1:32
  SPEAKER_01: My question for you is, is it actually more humane to give employees months of
• 1:36
  SPEAKER_01: warning
• 1:37
  SPEAKER_01: that layoffs are coming or is uncertainty worse than a clean, immediate decision?
• 1:44
  SPEAKER_00: Well if this is actually a thing where it's a strategy that they're
• 1:50
  SPEAKER_00: employing
• 1:51
  SPEAKER_00: to reduce the the number of payoffs, the amount of payouts that they have to do.
• 1:58
  SPEAKER_00: I get it.
• 1:59
  SPEAKER_00: That's kind of cold and calculating and callous.
• 2:01
  SPEAKER_00: It's also bullsh*t.
• 2:03
  SPEAKER_00: this is another, if that's a thing, this is another example of uncaptured costs that
• 2:10
  SPEAKER_00: fall between the things that you know.
• 2:12
  SPEAKER_00: So
• 2:13
  SPEAKER_00: The two pathways here, pathway number one, let people know right away and then you
• 2:19
  SPEAKER_00: have to pay your severance pay and terminations and all of those costs.
• 2:23
  SPEAKER_00: Okay, fine.
• 2:25
  SPEAKER_00: you know, that number might be higher than the other pathway.
• 2:28
  SPEAKER_00: But pathway number two, if you have months and months and months where employees
• 2:33
  SPEAKER_00: are just
• 2:34
  SPEAKER_00: kind of chilling out and they're fearful for their jobs, they don't really know
• 2:38
  SPEAKER_00: what's
• 2:38
  SPEAKER_00: happening, what's that doing to productivity in the meantime?
• 2:44
  SPEAKER_00: Right, especially over a large workforce.
• 2:46
  SPEAKER_00: if you take the impact of productivity and multiply it over four thousand, five
• 2:51
  SPEAKER_00: thousand
• 2:52
  SPEAKER_00: positions, I would be pretty darn sure that the amount of money that you're losing
• 2:58
  SPEAKER_00: and
• 2:58
  SPEAKER_00: lost productivity because of like low morale and people being freaked out and
• 3:03
  SPEAKER_00: whatnot is
• 3:03
  SPEAKER_00: greater than what you're saving with some people who leave, especially in a down
• 3:08
  SPEAKER_00: economy.
• 3:09
  SPEAKER_00: Right.
• 3:09
  SPEAKER_00: Like, I don't think that makes a whole heck of a lot of sense.
• 3:13
  SPEAKER_00: And altogether, this thing kind of hints at why people are rating things like
• 3:18
  SPEAKER_00: being
• 3:20
  SPEAKER_00: treated like a human being as factors for engagement, like we talked about not too
• 3:24
  SPEAKER_00: long
• 3:24
  SPEAKER_00: ago.
• 3:25
  SPEAKER_00: You know, if this is the backdrop where all this stuff is happening, it kind of
• 3:29
  SPEAKER_00: becomes
• 3:29
  SPEAKER_00: clearer why people are like, yeah, treat me like a human being and I'm there for it,
• 3:33
  SPEAKER_00: boss.
• 3:34
  SPEAKER_00: Like, let's go.
• 3:35
  SPEAKER_00: You know, I will love my job and be all in.
• 3:37
  SPEAKER_00: What does that say about our society?
• 3:39
  SPEAKER_00: This is another case of what does this say about society?
• 3:44
  SPEAKER_00: I don't dig it.
• 3:45
  SPEAKER_00: The better way to do this, in my opinion, is to don't announce layoffs ahead of
• 3:50
  SPEAKER_00: time if you have to do layoffs.
• 3:52
  SPEAKER_00: Like, don't.
• 3:53
  SPEAKER_00: Just tell people when it's time to go, you know, lay them off,
• 3:57
  SPEAKER_00: come to
• 3:58
  SPEAKER_00: terms whether it's they leave immediately, whether it's, you know, there's a working
• 4:02
  SPEAKER_00: notice.
• 4:04
  SPEAKER_00: but combine that with generous severance packages.
• 4:08
  SPEAKER_00: Don't cheap out.
• 4:09
  SPEAKER_00: Right.
• 4:10
  SPEAKER_00: If people know that if they're going to get laid off and if the package is going to
• 4:15
  SPEAKER_00: be
• 4:15
  SPEAKER_00: generous, at least you can mitigate some of the downside fallout of all of this
• 4:20
  SPEAKER_00: stuff.
• 4:20
  SPEAKER_00: So I don't think that the two options that are presented by the
• 4:26
  SPEAKER_00: article are good options.
• 4:27
  SPEAKER_00: I think there's a third option that we really should pursue.
• 4:32
  SPEAKER_01: I agree.
• 4:32
  SPEAKER_01: So on on the one hand, I prefer transparency.
• 4:36
  SPEAKER_01: I would be the type of person who would like to know.
• 4:39
  SPEAKER_01: and then I would make an informed decision.
• 4:43
  SPEAKER_01: I could potentially just wait it out and not quit, see what's out there in the
• 4:48
  SPEAKER_01: market, and then collect my severance when the time comes.
• 4:52
  SPEAKER_01: so
• 4:53
  SPEAKER_01: to me, it's not the end of the day.
• 4:55
  SPEAKER_01: It is how it's presented though, the idea of forcing people to kind of make a
• 5:00
  SPEAKER_01: decision.
• 5:01
  SPEAKER_01: And then they quit, and then the company
• 5:03
  SPEAKER_01: doesn't have to pay as much in severance or
• 5:06
  SPEAKER_01: termination.
• 5:06
  SPEAKER_01: Like, sure, that's an assumption, it's probably correct.
• 5:10
  SPEAKER_01: For maybe they're interviewing the people who have experienced this themselves.
• 5:16
  SPEAKER_01: my preference is companies that are very transparent with their runway.
• 5:23
  SPEAKER_01: Very transparent
• 5:24
  SPEAKER_01: because they're basically... they're telling you right there, we have this much
• 5:28
  SPEAKER_01: runway left, and if we don't raise another fund.
• 5:31
  SPEAKER_01: Or if we don't get some more, signed contracts or sales or whatever, then we might
• 5:38
  SPEAKER_01: have to consider it.
• 5:39
  SPEAKER_01: And this is a constant and a continuous conversation.
• 5:43
  SPEAKER_01: Because quite frankly, more companies than we realize, and I'd argue that all of
• 5:49
  SPEAKER_01: them are in this situation constantly.
• 5:51
  SPEAKER_01: It's a very fragile balance of whether or not the company survives.
• 5:56
  SPEAKER_01: And so that information is always there.
• 5:58
  SPEAKER_01: That reality exists.
• 6:00
  SPEAKER_01: all the time.
• 6:01
  SPEAKER_01: it's just not usually public and known to the employees.
• 6:05
  SPEAKER_01: And so I would say that, during your town halls, just have very clear, maybe
• 6:10
  SPEAKER_01: quarterly financial updates and people are... they feel respected.
• 6:15
  SPEAKER_01: They have the information they need to make
• 6:17
  SPEAKER_01: informed decisions about whether or not
• 6:20
  SPEAKER_01: that's enough for them.
• 6:21
  SPEAKER_01: Do they feel secure and safe enough to stay in the role or should they leave and
• 6:24
  SPEAKER_01: look for something else?
• 6:26
  SPEAKER_01: Even though, like I said, this is what happens at every company anyway.
• 6:30
  SPEAKER_01: It's the idea that they tell you months in advance that cuts may be coming don't
• 6:36
  SPEAKER_01: know when, don't know who.
• 6:37
  SPEAKER_01: That feels iffy and that does feel like they're doing it to try to get people out.
• 6:42
  SPEAKER_01: The risk there is that you might lose, say, your top performers.
• 6:45
  SPEAKER_01: But if companies are doing sketchy things like that, then they're probably saying
• 6:49
  SPEAKER_01: to their high performers, you don't have to worry about it.
• 6:53
  SPEAKER_01: that's it's not just they're
• 6:54
  SPEAKER_01: doing one sketchy practice.
• 6:56
  SPEAKER_01: It's happening all over in ways that we
• 6:59
  SPEAKER_01: Can't even imagine.
• 7:00
  SPEAKER_01: So yeah, I agree.
• 7:03
  SPEAKER_01: I don't care
• 7:03
  SPEAKER_01: for it.
• 7:04
  SPEAKER_01: There are better ways to do this.
• 7:06
  SPEAKER_00: Yeah, there are there are novel things too.
• 7:08
  SPEAKER_00: if a company is truly in dire straits and they value their employees and they still
• 7:13
  SPEAKER_00: value
• 7:15
  SPEAKER_00: the mission, they still want to try and figure out a way to carry on, you know,
• 7:18
  SPEAKER_00: there are
• 7:19
  SPEAKER_00: things that you can do that are transparent that are another way as well.
• 7:24
  SPEAKER_00: You know, you can talk to employees about temporary voluntary pay cuts, you can
• 7:28
  SPEAKER_00: talk about rolling back other things and have open conversations.
• 7:32
  SPEAKER_00: it's a little challenging when you get into pay cut territory,
• 7:37
  SPEAKER_00: rolling back wages or whatever.
• 7:39
  SPEAKER_00: It's something that you shouldn't just take for granted and you shouldn't just do.
• 7:42
  SPEAKER_00: Like you have to have the conversation and it has to be voluntary.
• 7:47
  SPEAKER_00: And if I feel that if you go down that road, it has to be very temporary in nature
• 7:51
  SPEAKER_00: with very clear signs of when it will end.
• 7:54
  SPEAKER_00: You know, stuff like that you can kind of look at.
• 7:58
  SPEAKER_00: Doesn't work really well or at all for Fortune 500's, for large companies,
• 8:03
  SPEAKER_00: but for smaller companies that are ten to fifty employees, could be an option.
• 8:07
  SPEAKER_00: You know, and it might be a better option than just saying, hey, in a year we might
• 8:12
  SPEAKER_00: or might not lay people off.