Man nobody reads the articles anymore. I think the Prof is correct. This is a social contagion all the way from Wall Street. Arguably the contagion trigger was the Fed raising interest rates. But that doesn't mean layoffs are eminent especially in cash rich businesses.
I remember being in high school and some girl freaked out about not getting the grades to get into Stanford etc... Guess what, that anxiety spread through the class and it was never the same again.
As smart as we are, we do not think for ourselves and let social cues manipulate us.
From the article:
"What are some myths or misunderstandings about layoffs?
Layoffs often do not cut costs, as there are many instances of laid-off employees being hired back as contractors, with companies paying the contracting firm. Layoffs often do not increase stock prices, in part because layoffs can signal that a company is having difficulty. Layoffs do not increase productivity. Layoffs do not solve what is often the underlying problem, which is often an ineffective strategy, a loss of market share, or too little revenue. Layoffs are basically a bad decision.
Companies sometimes lay off people that they have just recruited – oftentimes with paid recruitment bonuses. When the economy turns back in the next 12, 14, or 18 months, they will go back to the market and compete with the same companies to hire talent. They are basically buying labor at a high price and selling low. Not the best decision.
People don’t pay attention to the evidence against layoffs. The evidence is pretty extensive, some of it is reviewed in the book I wrote on human resource management, The Human Equation: Building Profits by Putting People First. If companies paid attention to the evidence, they could get some competitive leverage because they would actually be basing their decisions on science.
Yes, looking at all the comments it’s pretty clear nobody reads the article or stops reading as soon as they read something that goes against what they already know. He even suggests methods to avoid layoffs: broader cuts in staff compensation in lieu of letting people go.
The most trotted reason for layoffs (“market conditions have changed”) isn’t really being justified with any kind of numbers so I find this argument unconvincing. While I understand layoffs may be required for companies that aren’t profitable and low on financing it makes little sense for highly profitable ones like Meta.
I remember being in high school and some girl freaked out about not getting the grades to get into Stanford etc... Guess what, that anxiety spread through the class and it was never the same again.
As smart as we are, we do not think for ourselves and let social cues manipulate us.
From the article:
"What are some myths or misunderstandings about layoffs?
Layoffs often do not cut costs, as there are many instances of laid-off employees being hired back as contractors, with companies paying the contracting firm. Layoffs often do not increase stock prices, in part because layoffs can signal that a company is having difficulty. Layoffs do not increase productivity. Layoffs do not solve what is often the underlying problem, which is often an ineffective strategy, a loss of market share, or too little revenue. Layoffs are basically a bad decision.
Companies sometimes lay off people that they have just recruited – oftentimes with paid recruitment bonuses. When the economy turns back in the next 12, 14, or 18 months, they will go back to the market and compete with the same companies to hire talent. They are basically buying labor at a high price and selling low. Not the best decision.
People don’t pay attention to the evidence against layoffs. The evidence is pretty extensive, some of it is reviewed in the book I wrote on human resource management, The Human Equation: Building Profits by Putting People First. If companies paid attention to the evidence, they could get some competitive leverage because they would actually be basing their decisions on science.
"