The Big Tech companies have been in the news lately, after announcing record numbers of layoffs. The Chartr graph below shows the tens of thousands of layoffs at Facebook/Meta, Google/Alphabet, and Microsoft. Only Apple has kept their employee ranks whole.
Google was heavily criticized for the way they handled their layoffs. They sent out “best wishes in your future endeavors” emails to 12K employees in the middle of the night. Some employees didn’t even get their notice before they lost access to company email.
Responding to the ridiculousness, a woman named Jen Hogan (a business consultant in Asheville NC), shared her experience recently with Delta Airlines. The post went viral on LinkedIn and showed how layoffs might be handled in the future …
In 2020 I left Delta Air Lines along with 14,999 people. They looked for volunteers. Not ONE person was involuntarily severed. They presented us with an attractive package and left us to make our own choices.
They celebrated the people who took the offer. They THANKED them for saving the airline. They consider them alumni, and even created a community for them
They got their cost savings. They also showed grace and compassion and humanity. So it is possible.
I’ve seen companies handle layoffs well and companies handle layoffs poorly. Just a few months before I walked away from my final job, my MegaCorp was going through layoffs. I asked if folks could “volunteer” for a package, but was told that the company “reserved the right” to pick who was let go, not the other way around.
Since I was getting ready to walk out on my own anyway, I would have gladly taken a package at that point. Two other people on my team likely would have, too. We talked about it.
Instead, the company let three other employees go – and then saw the three of us leave in the next 6 months. Six employees were lost, in total – some with significant experience. I’m thinking that didn’t help MegaCorp as much as they thought it was going to. (Although the layoffs continued after we we had all departed).
What has been your experience with layoffs? How should companies approach it differently?
Image: Pixabay; Chart: Chartr
MrFireStation 
Here is a note to high school misguidance counselors and parents. STEM is not the perfect career path that you are selling to your students. The tech industry has boom and bust cycles, and you are at risk of having your job outsourced at any time. The world needs more electricians, plumbers, and truck drivers, where you can build a business and client base.
The current bust cycle makes the third tech industry bust cycle I have observed since 1982. During the early 1980s degrees in Electrical Engineering and Computer Science were really in demand. Much of this was driven by the defense industry build-up under Reagan. When I moved to California in 1986, Hughes Aircraft was the largest employer in the state. Aerospace and Defense was by far the number one industry in Southern CA.
The fall of the iron curtain led massive layoffs in the tech industry, including myself. The only work I could find paid about a third of what I was making before. Six properties that touched mine were lost to foreclosure in the early 90s, as what was left of the industry left town for primarily destinations in Texas and Arizona.
The end of the 1990s was the high water mark for the tech industry and my career. The tech industry was booming due the adoption of the internet taking over entire industries that previously involved calls into call centers or a broker to order something. Store fronts were converting to online catalogs where you had an endless selection of goods that showed up at your doorstep within days. There was also high demand driven by companies that had to replace systems because their old ones to mitigate the Y 2K problem.
I was making baseball player type money by working myself up to having the highest sales out the company’s 500 sales people. All this changed at the end of Q1, when the company was sold to another company. I was laid off less than 25 days after the new owner took ownership of the company, and it wasn’t the Delta Airlines type experience. In fact the new owner retroactively modified the severance policy that was working under to not include commissions in the severance calculation. Since the majority of my income came from commissions the difference in payouts was $388,433.
However, I got the last laugh as I had personally observed the new owners violating Anti-Trust Law and SEC Accounting Rules. I had collected email evidence that had the goods on the new company’s General Counsel and CEO, just in case. I contacted the DOJ, and they flew out to CA to depose me. The General Counsel got five years in prison and lost his law license, and the CEO got twelves years in prison. There were many other C-level Executives who got time in Club Fed as well. The next couple years I was laid off three more times without the “Delta” type experience.
To company management, mistreat your employees and they will mistreat you back when they have the chance. I bet the CEO who went to Federal Prison would have preferred to have given me my correct severance if he had a do over? Another very likely scenario is the people you are mistreating today, could very likely be the buying decision maker for your company’s product or service tomorrow. I have never bought anything from a company that laid me off.
To workers, my bit of advice is save your money and invest it so you can be FIRE. Due to the tech industry’s boom and bust cycles, I always lived in fear of having the rug pulled out from me, even when things were going well. Anytime I had a windfall or received a large bonus, I saved and invested it. Funds that I parked in Deferred Compensation Plan in 2000, became the foundation of my retirement 20 years later.
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Wow. I had to read that three times, Klaus. You really have lived through the challenges of MegaCorp layoffs and corruption. It would make a good screenplay or book!
The boom-and-bust over the last 30-40 years just looks like a ongoing California tech “boom” to someone from the outside. The dynamic changes in industry and technology over that span of time is jarring.
The best you can do is what you did … look out for #1, put $$$ away aggressively, and keep your parachute ready!
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The business base has turned over at least three times since I have moved to California. The combination of bad governance and high prices chases away good business.
Here is example of good businesses being chased from the People’s Republic of California. The Torrance area, which is slightly down the road from El Segundo which was the epicenter the US Defense Industry, was the epicenter of Japanese Car Manufacturers in the US. All of the biggies were there. Toyota, Honda, and Nissan. Guess where the Korean newcomers setup shop. The local school district was setup to teach students in both Japanese and English. This was very important, because Japanese Executives who were doing their stint in the US didn’t want their children to fall behind when they went back to Japan. There was also a sense of community.
I would also contend that by placing their design centers in California was one of the secrets to good Japanese car design. People want to drive up “The Grapevine” going 75 miles per hour, with their AC on in 110 degree weather, towing their fishing boat behind them. The signs on the grade actually tell you to turn off your AC. I call this section of the 5, the “car eating hill”. The engineers must have driven up these hills, and designed cars to the challenges. Eventually US car companies had to catch up.
The civil serpents in CA actually managed to chase the Japanese car manufacturers and their good jobs away to the Midwest.
Another corruption story was having a front row center seat into the 2008 housing debacle, which was really a mortgage underwriting debacle. The company I retired from was located across the street from Countrywide, which was the worst offender.
The company that I was selling to, that actually helped me make the case that took down the slime bucket CEO who cheated me out of $388,433 was an innovator in the Health Insurance Industry. Woodland Hills used to be known as the Hartford of the West. The businesses that fed my family and helped me reach the high water mark of my career were all bought by out of towners.
Ending on a positive note. The fact that California still has a reasonable unemployment rate is testimony to the creativity and hard work of some individuals. I remember sitting in a TRW Executive’s office that overlooked a golf course in Redondo Beach in the late 1980s and he told me, “I want to meet with people who have ideas that scare the hell of me. If the something is too simple and non-controversial, the idea will be adopted in Fort Wayne, Indiana.” But, how much more of this crap can we take.
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Klaus, I have to echo your comments as to the defense industry in California. I am presenting at a conference in Sacramento next week and a comment from my slides says “We won the cold war and in the early 90’s we received the “Peace Dividend”. This peace dividend was not kind to public entity revenues when defense plants in many areas including Sunnyvale/San Jose, Long Beach and the San Fernando Valley along with San Diego closed. Tax revenue plummeted.
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Small businesses that were sub contractors or providing goods and services to the Defense Contractor Employees lost their customers and many went under as well.
One company that successfully beat their swords into plowshares was Qualcomm. Things were not looking good for Qualcomm in 1990 when they lost a Defense Contract to provide spread spectrum radio sets to the military. Their spread spectrum became the underlying technology for CDMA cellular technology and investing in Qualcomm stock would have netted the largest return between 1990 and 2000.
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