I’m interested mainly in the IT sphere, but feel free to comment if you represent other types of corporate departments and have dealt with similar issues.
I work for a large company, in a large IT department. Recently about 15% were let go, but we were told that this is NOT a move to save money. Indeed, the folks who were laid off will be replaced, and the headcount will stay the same if not actually increase. We were told that the laid-off staffers didn’t fit into the team that the IT top managers were trying to build for the future.
But how is it more efficient to hire completely new people and train them in the company’s systems, than to retrain the old people who didn’t “fit”? Even experienced developers and analysts need a good deal of preliminary orientation and training before they become productive in a company. What’s more, some of those let go were the only people who knew certain areas of the system, leaving many of those behind to scramble to get up to speed.
It’s significantly cheaper to bring in new hires with little experience, especially during a recession - their salaries will be much, much lower. I imagine that the team the top IT managers in your company were trying to build is one that costs less to keep in action, so the laid-off staff members don’t fit into it because of their salaries. It’s not efficient in terms of making things work to do that sort of thing, but it’s certainly efficient for saving money. If some peons have to work overtime to keep things working, so what? It’s not like they’re going to quit with the job market as tight as it is. That’s presuming, of course, that the 15% actually get rehired, you can’t really be sure that headcount will actually stay the same in the future.
Maybe your company is one of the rare ones where the top managers really care about thier employees or about doing things efficiently, but from my experience the most likely explanation is that by cutting salaries now they meet some kind of cost-reduction inititiative and will get a bonus for it.
Its also possible that they didn’t fit in a number of ways:
Some people don’t want to give up their favorite technology. They will fight tooth and nail to stay on the VAX, use Netware (my own dear technology, but I ain’t married to it), or won’t ditch Solaris in favor of Linux. They aren’t worth the bother to fight when you can find plenty of people who will do what you need them to do without griping about it.
Some people lack the talent. For a number of years, IT positions were frequently filled by the best available candidate - and sometimes the best available candidate was a clueless git (I managed some of them). Now that the labor market is much less tight, you can get rid of the clueless git you really wish you wouldn’t have had to hire (but a warm body was better than none) and replace him with someone who can do the job a lot better for the same money.
Some people lack vision. Corporate IT is becoming much more integrated with the business. Its less about coding than it is about understanding business needs and building cost effective solutions. An amazing number of IT people don’t get this. The solution that is the “coolest” is the best, regardless of if it has anything to do with the business need or can get you ROI.
Not a move to save money? Believe it when you see replacements hired.
But, laying off 15% of the staff because they didn’t fit the utopian goals of the higher-up? Yikes!
Training or retraining technical staff is ferociously expensive enough, but I don’t think there’s any training to make people fit a mythical slot in management’s future dreams. The company would have been better off giving each non-fitting person $10,000 and letting them continue.
IT, and computer-savvy people in general, have traditionally gotten a lot more slack in terms of how they “fit” proprotional to how much they know. Some of our technical folks glow in the dark because they’re so smart. We may be a Fortune 50 corporation, but does anyone care if the geeks show up in grubby sneakers or want a month-long vacation? Nope.
Will your company suffer for letting go of talented people that didn’t fit? Absolutely. It sounds like they already are.
From what they told us, they’re not planning on refilling the positions with entry level employees. So I don’t think they’re planning on saving money that way.
As for “fit”, they didn’t seem in a corporate cultural sense, but more in terms of skill sets. Of the two axees I was fairly close to,
one of them was out on medical leave expecting her baby to arrive any day. I wonder how that works, anyway? A remotely administered termination! The other axee was possibly seen as having an attitude problem. You probably know the sort of person, who’s always griping and criticising, but in a good natured, jocular way. Maybe he just went a step too far. They’d never tell us that, obviously.
But I’m sorry to see them both go, as I’d known them for years and we’d all worked at my last company before coming here.
You’d be suprised at how IT salaries work - since you’ve ‘known them for years’, presumably they’ve worked at Company for years. They’ve probably got a higher salary and more benefits than someone coming in off of the street; even if your company isn’t looking for entry-level people, someone with some experience and knowledge is likely not going to command the same salary as someone who has been in the company for years, especially with a recession going on. The trick is, someone with 20 years on the job costs a lot more than someone with 0 years on the job plus experience elsewhere.
Another thought - it’s possible those laid off were pawns in some kind of pissing match among higher-ups.
I seen whole groups vaporized because the guy on top of the left side of the org chart wanted more boxes under him than the guy on top of the right side of the org charts. And yes, it’s always guys. And no, it couldn’t have happened if the power-mad beast had been in good shape politically and the team wasn’t already shaky for some reason or other.
In any case, dust of that resume and keep your contacts warm.