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Labor, Lies, And Layoffs: The Logical Fallacies of Letting People Go by Leslie Juvin-Acker

October 21, 2015

Unwanted necessity. A last resort. A necessary evil in the world of business.

These are some of the labels that justify the choice to layoff dozens if not hundreds, or even, thousands of employees. These phrases do not do the justice of adequately expressing the amount of incompetence that goes into mismanaging a business. As blunt and ugly - and even polarizing - as this truth may be, it is up to leadership at all levels to admit to their follies that leads them to believe the surest way to growth is through eliminating those who are poised to support it.

This is not a statement about keeping outmoded and redundant jobs that machines and younger professionals exiting school can do in a shorter, more efficient amount of time. This article is focused at using layoffs as an excuse and method for justifying business moves to satisfy short term margin requirements on a balance sheet for a small group of investors.

“Cutting back” is not a justifiable tactic for poor resource allocation and unrealistic projection outlooks. Layoffs, even during “tough markets” are symptoms of two things:

1)    Insufficient long term growth strategy (and)

2)    Unrealistic expectations

Both are in the hands of leadership and as such are a reflection of those in charge at all levels from chairmen to the manager on the shop floor.

Growth doesn’t happen by magic. It happens as a result of culture and a long term strategy built around that culture. Fundamentally, layoffs are counterintuitive to these two things and say A) I don’t believe in the future and B) the culture doesn’t matter.

One might argue that layoffs are simply removing the bottom tier performers: the “weak links” and the “hangers on”. For the sake of argument, let us consider for a moment that this is indeed true. However, those who do remain - the best, the brightest minds - are not blind to the statements that culture doesn’t matter and nor does long term growth. Before long, these agents of change savvy on business trends will assure an unprecedented brain drain by leaving for other businesses with better cultural prospects.

And, so what? Leaders who justify these measures argue, we can always replace human capital - it’s being born anew everyday! That, too, may be true. However, the repugnant reputation has already been formed and those minds with any inkling of self preservation will avoid the short term, reactionary culture that now reeks from every corner of such an enterprise. In short, the long term consequences of layoffs are not soon forgotten.

Industries are built by those with long term vision; a collective of individuals brandishing the torch of commitment to excellence. Reactionary thinking in leadership makes businesses dispensable, especially when there are other businesses with more qualified leaders to carry an industry forward. Buying and selling talent is no longer a one sided endeavor of a bygone era. Higher educated professionals have more choices now more than ever and will select those companies worth investing their time and energy in and will reward that kind of loyalty.

Layoffs are fundamentally public relations disasters that say more about leadership than any sort of logic that can attempt to justify it. The questions that glare the unflattering light of truth bear to reveal incompetencies in business acumen and people management. For those who can answer these questions before “resorting” to layoffs, they will not only save their reputations but also assure creative thinking in problem solving.

These questions are:

1)    Who are we laying off? These are people, not positions to move around like pawns on a chessboard.

2)    What measure of performance do we risk to lose and gain by their removal?

3)    Is the layoff strategy long term in thinking? What is the fundamental message (e.g. the truth) that can be easily understood about this vision at a shareholder and public meeting?

4)    Are we attempting to satisfy our hunger for short term gains? Do we risk to impoverish our overall health with starving ourselves of talent who eventually will not play fool to our games?

5)    Who remains amongst those we have fired? What reward do they receive for their loyalty: an unexplained sense of job insecurity? A job for tomorrow, but not for the long run? What is the best answer to offer our best performers?

6)    How long do we, executive leadership, plan to stay aboard? Are we selfishly playing the game as to hedge margins in our favor as a way to entice buyout for a short term payoff? Do we really believe that this strategy will go unnoticed?

7)    Is our performance and leadership decision to lay off a reflection of sound business decisions and are our strategies “coincidentally” timed for when we are about to leave the company?

Having answered these fundamental questions, and assuring that there is no element of doubt, dishonesty, and selfishness on the part of those executing this plan, we can then access the business choices that led up to this “solution” and discover where things went wrong and finally address them. If poor character is ruled out, then incompetence must be considered. What does he/she not know that leads to drastic measures? If these individuals cannot be trained to avoid such failures, then they must be replaced by those who are capable.

At any rate, putting a group of incompetent businessmen together is a collective decision and responsibility must be shared and taken into account.  For, out of all the accounting that gets done to justify layoffs, responsibility is the last thing to be taken into account. Coincidence? I think not.