Two Hard Truths About Layoffs

Getting Laid Off is Hard

If you’ve ever been laid off, like I have, you understand how bewildering and frightening of an experience it can be. It’s with this first-hand understanding and with compassion that I share a few thoughts about the recent rounds of layoffs in the tech sector.

Hard Truth #1: Layoffs Impact the Bottom 20%

When companies seek to reduce staff, they typically target the bottom 20% (or some given percentage) of the performance curve. If you’ve been working hard and going above and beyond, it’s usually duly noted, and the ax normally bypasses you.

If, on the other hand, you’ve been pocketing a healthy paycheck but more or less coasting, the elimination of your position can help to achieve the profitability that investors and boards of directors are clamoring for.

While I have experienced the pain of being laid off, I have also been at companies where I survived layoffs and pretty quickly observed that the staff reduction did not seem to meaningfully affect the company’s operations or performance. Those who were laid off had not really been adding measurable value.

Hard Truth #2: Layoffs Can Impact High Performers

There are many exceptions to Hard Truth #1. Even solid performers can also sometimes open their inboxes to find a dreaded layoff notice or an ominous invitation to a call with HR. Particularly with the economic volatility that we’ve witnessed in the past three years – belt tightening and breath holding in the early covid days followed by frenetic hiring in sectors such as tech followed ultimately by drastic restructuring and deep job cuts – many hard-working and value-adding individuals will find themselves jobless at the same time as the underperformers.

What’s the Takeaway?

You may be asking yourself: so why should I work hard if I can still get laid off?

Apart from the fact that this is – in my view – your unwritten obligation to your employer, the next hiring manager you’re speaking with will certainly respond to the work ethic, continuous learning, innovative thinking, and added value that you were demonstrating before your layoff. This is not to mention that people tend to help those who have a track record of hard work and reliability.

Also, if you may be thinking of your own venture, you’ll usually be in a much better position if you’ve already been putting in the work to add real value in your day job. The combination of commitment, creativity, focus, flexibility and hard work that you have demonstrated while employed at another company will be an absolute requirement for your own business to have any chance of succeeding.

If the recent job cuts in tech have impacted you directly or economic uncertainties have you reassessing your career path and you think that my perspective might be helpful, please reach out, particularly if you may be considering starting a new business, and particularly in the field of consulting and professional services. I’d be glad to offer honest guidance (pro bono) as you contemplate your next moves.