top of page
  • Writer's pictureJoey Jakob

What are Layoffs?

Updated: Jun 30

AI generated image with this as prompt: "layoffs_ an abandoned office building with a dreary sky, thriving businesses surround"

Sure, we likely have a general sense of what encompasses a layoff, but do we really understand the value it provides (and the quandaries that might result) a company? This piece defines what a layoff is in 2024 tech culture, the impact to the company, and offers best approaches to adapt after you've lost some of your team


Let’s set the context. I work in tech, or at least I did until laid off earlier this year. A bust is afoot: the time of boom brought about during the pandemic – of low interest rates and companies hiring beyond normal means – vanished. Many companies that developed or expanded during that time were, have been, or are now cash poor and looking to increase their budgets. This is especially true if the company is pre-IPO, with the intention of going public in the coming year. The quick solution, if the product can’t quickly make more money or more investors found: a mass layoff of 2-100% existing staff, the average being 20-30%. 


Layoffs.fyi, an open sourced but news validated domain, cites these figures over the past couple years: 

  • 2022 → 1,064 tech companies laid off 165,269 employees

  • 2023 → 1,191 tech companies laid off 263,180 employees

  • 2024 → 347 tech companies laid off 99,737 employees

These numbers, while mainly following the USA, cover global layoffs, too, totalling more than half a million since 2022. In my close network, I know at least 6 people in the same boat (and dozens upon dozens of former colleagues and others loosely affiliated). As of writing this, it took one person more than a year to find a comparable role, one person is so dedicated they are constantly learning new skills to apply in their very niche sector, and the rest of us are still searching. 


We’re dedicated and talented people. We have friends and families and we know how to get things accomplished. So how did we get here?  



IMPACT DEFINED

In 2006 Louis Uchitelle published a labour history, The Disposable American: Layoffs and their Consequences. As a journalist on business, labour, and economics, Uchitelle covered socioeconomic impacts between 1977 and 1997. During that time a number of recessions occurred in America. Uchitelle tracked these and interviewed many affected, both those laid off but also those who remained working, even some leadership. He posits three myths still relevant today: 


  1. Layoffs ensure the company will do better, by saving money and cutting riff raff.

  2. The employees laid off should have done better to prove their value.

  3. The pros and cons of layoffs are entirely measurable in money. 


Number 3, measurements of money are the only value to consider, ignores that the org is never the same again post layoffs, nor are the individuals who continue to struggle for years if not indefinitely, in finding both satisfying work and trusting and valuing themselves as competent. This also completely ignores the impact on those who keep their jobs, left to pick up the pieces trying to get the company back on track to productivity.


The myths Uchitelle discovered illustrate a chasm of expectation: The company doesn’t inherently do better after layoff because measuring only money ignores that company culture is irrevocably altered. And those laid off might have done nothing wrong to wind up on the chopping block, regardless how much the decision feels deeply personal. 



WHAT IS A LAYOFF THEN?

So what is a layoff then? A cost-cutting measure. In strictly financial terms, when considering the very near future, this is certainly true. The money saved in salaries, benefits and other compensation does amount to usable capital elsewhere (often in illustrating greater company value, particularly representing its stock price). But looking ahead to the longer term reveals that layoffs might instead be an overall cost-increasing measure. Because what is leadership to do when the staff that remains cannot easily pick up the pieces and begin working effectively again? 


Morale is fundamentally important to planning and executing moving on for the company. If you don’t get it right, the company – and not just its culture – will rot. 



SURVIVOR LAYOFF SICKNESS: WTF

In Healing the Wounds: Overcoming the Trauma of Layoffs and Revitalising Downsized Organisations, David Noer describes “survivor layoff sickness” as those who are not laid off but continue to work at the company. He contends that frustration, anger, guilt, shock, disillusionment, lack of hope, and even depression might result. An academic in business leadership, Noer focuses on understanding what happened, commiseration, healing and building toward future success, for both the org and the employee. 


The shock of witnessing the layoff of your colleagues can’t be underestimated – it’s not the actual act that’s most shocking, but its aftermath, like a wave’s wake. After laying off nearly 15%, day-to-day struggles occurred at the company I worked for, particularly because  job security and company loyalty frayed. (I had survived the first round of 2023 layoffs, but less than a year later was let go in the next round). Lack of short term plans and long term strategy eroded the trust we’d all felt prior to layoffs, and asymmetrical workloads were not addressed. 


I’ve seen firsthand why communication and process interventions are so important because these were not firmly in place. In addition to leadership openly grieving the loss (obviously keep it professional), it’s the honesty of that communication that matters. Most companies take the time to build trust and “family” like bonding among colleagues, which is torn apart during mass layoffs. The expectation is that people will just “get on with it,” and if they’re upset, it’s an overreaction. Theirs and theirs alone. But you can’t have it both ways: if there is trust and bonding built in prior to a layoff, then the effects of the loss of colleagues will be shattering, not only for individuals, but deeply so for the org, too.


Noer validates these experiences and suggests that healthy survival strategies are essential, with four levels of intervention: 1) Process, focused on timely communication; 2) Grieving, with facilitated emotional releases to relieve repression and bring catharsis; 3) Empowerment, which looks to untangle organisational codependency and foster self-esteem; and 4) Systems, aimed at short term goal setting and long term project planning to reinstate employee value and company stability. These recovery interventions are broadened below with change models and organisational routines.



HOW DO WE GO ON WITHOUT OUR COLLEAGUES? CHANGE MODELS AND ORGANISATIONAL ROUTINES FOR RECOVERY

Prior to being laid off myself, I was a part of those who were kept, as the first round of layoffs occurred nearly a year before. As a sociologist, trained in organisational behaviour and change management, I understand that relevant and timely communication is key after a group experiences a large loss


Besides sharing information on what happened with your remaining staff, as leadership or even as a colleague, recovery is premised on honesty and optimism – yes, optimism is essential, but not without the honesty quotient. One without the other leads people to lack in trusting each other, a fatal flaw post layoffs: only honesty might be too bleak, while only optimism might indicate a lack of existence in reality. 


Recovery: High-Level Approach

For recovery, Hilary Scarlet, in Neuroscience for Organisational Change, suggests that setting short-term, achievable goals is essential for individuals and teams. Coupled with reminding others of their past achievements, offering praise and recognition, help to bring a sense of security. Enabling people to feel capable again, along with a touch of novelty to breed excitement and curb distraction (a new, small project?), fosters a supportive culture. Really, these suggestions are great for engaging with anyone experiencing a loss, so this shouldn’t come as a surprise even if this realm is professional and not personal.   


Change Models: Modelling for Change 

Change requires more energy than staying in the same place. Inertia is real. So for change to take place, it’s worth first appraising ability, and receptiveness, to doing something differently


Schmitt and Chan, in the chapter Adapting to Rapid Changes at Work, write that “Individual adaptability to changes at work refers to the effectiveness of an individual’s response to new demands resulting from the novel and often ill-defined problems created by uncertainty, complexity and rapid changes in the work situation.” These authors discuss that, while it’s not impossible to get someone to change who’s resistant, it's easier if readiness is already present. Appraising first if the person (or team) recognises the need for change, will pinpoint whether or not gentle handholding will be required once the change process is set in motion. 


Chan and Schmitt further point to a difference between two types of change readiness: those with a “performance construct” or “personal characteristic.” For one to utilise a performance construct, they have a “will do” attitude and respond well to minimal coaching (as in, some hand-holding required). Conversely, possessing a personal characteristic around change comes with a “can do” attitude; these individuals already have the skills to adapt to change.  


While a limiting binary, these two categories are great for the early appraisal: those with “can do” attitudes can help adapt those who need a little extra support by modelling the appropriate adaptations and changes for others. 


Organisational Routines: Wash. Rinse. Repeat. Repeat. Repeat. 

Alongside understanding change models, appraising what’s working and failing will determine which routines must go, which can stay, and which require a whole new approach. Routines equally constrain as they enable


Existing routines constrain when behaviour and patterns are set. Changing these is challenging, especially if they have never been pointed out or had any previous intervention. Say, for instance, a weekly standup meeting might seem functionally useful to a manger, who is too busy to meet one-on-one with staff, but to staff these could veer the whole workday off course with its disruption. Good routines can be introduced and have a better chance of succeeding if self-reinforcement and self-sustaining properties are built in. Ok, how?


An emphasis on doable standard operating procedures is crucial; new habits must be easy to understand and perform, or they will be forgotten and ignored. Consider building off of something you know already works, or at the very least, remove the thing that everyone groans about. 


Continuing with my above example, maybe the standup meeting would feel less disruptive if a pre-meeting were set for staff – without the manager present – to sync up and succinctly define the pressing issues and wins to communicate. The self-reinforcing property here is lessening the amount of time to meet overall, which meets everyone’s needs, and in so doing can be more self-sustaining. Feeling heard, especially post layoff, will help build and reinforce a strong team, and company, culture.



CONCLUSIONS: BEYOND THE ORGANISATIONAL EFFECTS OF LAYOFFS

Let’s be realistic. Layoffs will continue to happen, and survival layoff sickness, and the havoc it sows, will persist. But we can do better at ensuring the potential future success of the company and its staff – if we build in some failsafes. Honesty, optimism, and supportive communication are the foundation. On a team level, reminding people of their past achievements, and offering praise and recognition, brings a sense of security and encourages capabilities. Appraising readiness for change, whether a “will do” or “can do” attitude, also helps to first identify where people are at, prior to considering what and how to introduce new routines. Failing to appropriately appraise and meet team needs is consequential regardless of company culture, but can be catastrophic post layoffs. 



References

  • https://layoffs.fyi/

  • Noer, David M. Healing the wounds: Overcoming the trauma of layoffs and revitalizing downsized organizations, 2009.

  • Ployhart, Robert E., and Scott F Turner, “Organisational Adaptability” in  Individual adaptability to change at work: New directions in research. David Chan, Ed., 2014.  

  • Scarlett, Hilary. Neuroscience for organisational change: An evidence-based practical guide to managing change, 2016.

  • Schmitt, Neil, and David Chan. “Adapting to Rapid Changes at Work: Definitions, Measurements and Research” in Individual adaptability to change at work: New directions in research. David Chan, Ed., 2014. 

  • Uchitelle, Louis. The disposable American: Layoffs and their consequences, 2006. 



Author's Note

I wrote this piece using books found in the stacks of Toronto Reference Library. Partially because I love a library -- the quiet space, the smell of dusty books, the focus that surrounds you from others -- and partially because I wanted a time-and-materials-bounded project. Sure, there are countless sources that could be consulted and utilized to write a piece like this, but really, regardless of publication date, my experiences applied to these flesh out the same body. The TL;DR: I care a great deal about people and the workplace, and organisational behaviour is my wheelhouse.

Comments


Commenting has been turned off.
bottom of page