There were lots of tributes to Jack Welch in the online ecosystem recently, as he passed away this week. In many ways, he’s considered the executive of the 1980s. In many other ways, he was terrible and probably set GE up for the fall they are currently in — he got them to about a $410B market cap, but they’re sub-$100B now and he made a lot of questionable calls around GE Capital and more. He was a very big “stakeholders” guy, although later, post-career, he seemed to understand that employees matter as well.
Thing is, he was also called “Neutron Jack” because he did massive layoffs all the time. Neutron bombs keep the building standing but kill everything inside, essentially. In many articles when he passed away, the “Neutron Jack’ thing was treated as virtuous and great, although there were a couple of Twitter threads where people were like “Welch fucked my family by laying off my grandfather,” etc. Let’s address this all briefly.
Layoffs are not a good thing
Most are taught to chase growth. Layoffs save you money — yay! — but are technically the opposite of growth. Plus:
- You lose institutional knowledge.
- You run your existing employees into the ground at the Temple of Busy.
- We keep saying business is about relationships and connections, and mass layoffs are pretty much the polar opposite of that concept.
- It’s basically a Band-Aid on a dam if that’s your primary “strategy” to hit numbers.
So why do we view them as a good thing?
Easy, and a few reasons:
- The world is still predominantly run by cost-cutters.
- Easy to dismiss layoffs as “cost of doing business” or “can’t make an omelette without breaking a few eggs!”
- Layoffs often are an impersonal process handled by #HRCathy, a machine (Amazon!), or a consultant (George Clooney movie Up In The Air). As a result, it’s easy for “leaders” to emotionally distance themselves from the process. After all, this isn’t happening to their families, right? And the fact that it’s happening means the “leader” will probably hit a number and get an incentive pay bump, which means these layoffs are actually good for the family of the “leader.” Most people make decisions at that level, not at the “greater good” level. Sorry to break that to you.
- Most cultures are spreadsheet mentalities, and layoffs do let you hit numbers quicker — again, it’s a Band-Aid on a dam, but you will hit digits.
Can we change this mentality?
Writ-large, no. A guy who loves “biz stuff” and analyzing “cost plays” will always love the idea of layoffs. It’s a quick and easy way to get your own nut. As long as human ideas like greed and justification are still in existence — and they will be! — layoffs will still be in existence. It’s probably going to get worse as you see more disruption in business, because that means more companies that will struggle with revenue intake down the road. If your legacy product was slaying it and preventing layoffs for two decades, but now Johnny from West Seattle has an app that’s disrupting your ass, well, someone is getting laid off because that legacy product isn’t doing quite as well.
So no, layoffs will always be a thing, unfortunately. But that doesn’t mean it’s the mark of a good leader. A leader that allows for layoffs to be conceptualized as a strategy broadly sucks. He’s not empathetic, he barely understands his business, and he certainly doesn’t know how work gets done — which is a function of institutional knowledge and process context at most places. The more people you #pipe out, the harder consistency becomes.
Couple of quick layoff stories
Got drilled out of one job in November ’15, about eight days after my 35th birthday. Me and this older dude (early 50s) got the pipe job done first, then there were bigger layoffs behind us. I think me and him got it first because we were more outspoken about issues with the place. Anyway, at mine my boss avoided direct eye contact and drank Diet Coke through a straw for 14 minutes. It was gross. Then a HR lady named Amber escorted me out of the building as if I was a common criminal.
May 2019, on the second day of a local PGA Golf Tournament, I got drilled out of some agency job. My direct boss again avoided eye contact for about eight minutes, read a statement, and asked for my laptop. His then-boss, some witch who I now regularly see play stupid “What dog are you?” games on IG Stories, sat there smirking because she never liked me and got to be a part of my termination. She was mid-40s, one kid. When you get smile-wide glee seeing someone lose a paycheck, that feels questionable. I hope that kid turns out well.
Layoffs aren’t marks of good leaders, and are usually handled very poorly. Can that now be the narrative?