What happens when a big company layoffs people.
Recently [June 2015] Microsoft has announced that it will lay off 7,800 jobs. The total number of employees working @Microsoft as of March 2015 is 118,584. That is almost 6.5% of the employees working @Microsoft will lose their job.
That is a high percentage of people to layoff. Keeping in view that they have just laid off 18,000 people in year 2014, almost 15% of the workforce.
I myself have been a part of some massive layoffs in big companies. I can tell you, it is not fun and your individual productivity suffers.
When should the layoffs be conducted?
Usually lay-offs are conducted when a company is in trouble, and that also implies if layoffs are happening then the company must be in trouble.
I don’t agree with this model, it brings all the employees in a company under stress and topics like “this company is not going to last more than 4-5 years” starts erupting near the coffee machine as soon as the lay-offs are announced. People start speculating the future of the company in-order to feel secure.
This is bad, both for the company and the employees.
Lay-offs should be a permanent part of a company’s agenda every 2-3 years. They should happen at a constant interval, at a defined time every 2-3 year. Lay-off should be modeled in such a way that they don’t have to be announced; everybody should know that they are coming in few months.
Just like quarterly reports are presented every 4 months, they are not announced, they are just presented. That should also be the model of laying-off people. Every 2-3 years, layoffs should just take place.
It will definitely reduce the pressure and the stress that an employee feels once the layoffs are announced and it will also take away the rumors that effect negatively on a company’s portfolio.
Layoffs should be thought of as the cleansing cycle for the company.
Why lay-offs are important?
I myself have been a part of some massive layoffs in big companies, but I still think lay-offs are important and in most of the cases if carried out wisely are in favor of the company.
I look at layoffs as a cleansing mechanism for any company.
When a new employee is hired, despite the rigorous interview procedures, an employer can never guarantee the long term performance & sustainability of the employee. So it is important to have some kind of procedure in place to keep the productive employees and get rid of the lazy, piggy back riders.
Who should be laid-off
The best people to layoff are not the ones who are bad performers or who are not motivated. A bad performer can always be converted into a productive employee by proper technical training. A non-motivated person can always be motivated by offering the right opportunities.
The people to layoff are the ones who are not only non-productive and non-motivated but they also encourage people around them to be non-productive and take away their motivation. Yes, such people exist and they spew negativity all around them.
They should be the first ones to layoff, because they are not only harmful for themselves but also harmful to the people around them.
Effects of layoffs on employees.
- Individual productivity of every employee decreases.
- Employees lose faith in the company.
- Many employees start looking for other opportunities and the company loses good employee in the process