Magazine article Techniques

Mad about Layoffs

Magazine article Techniques

Mad about Layoffs

Article excerpt

Business has been taking a beating lately, and we've been taking it lying down. We've been getting hit from the right, the left and the center. Pat Buchanan accuses us of promoting trade deals that send American jobs to the Third World. Robert Reich talks about a growing wage gap and the rise of the anxious class. But, above all, there are the stories about layoffs-about companies that do layoffs amid record profits, about a stock market that rewards companies for eliminating jobs, about CEOs who fatten their own portfolios by putting thousands of people out of work.

And we've had nothing to say about all that. We've let politicians and pundits define us as ruthless downsizers, wreckers of communities, greedy monsters who care about nothing except "the bottom line of a balance sheet," as Buchanan likes to say. I know. He says he's talking just about "corporate butchers," but if no one stands up and takes him on, we all get tarred by the same brush.

Now I don't blame people for getting mad about layoffs. I have no patience with CEOs who make excuses for layoffs, who say they're cutting jobs only to make the company more competitive in the future, to protect the interests of shareholders, to avoid bigger layoffs down the road, or whatever. The implication is that, by downsizing, the CEOs are just doing their job and earning their salaries.

Bull.

Layoffs are a sign of management failure. You lay people off when you've screwed up, when you've guessed wrong about the market, when you haven't anticipated some critical development or created adequate contingency plans. Reality comes along, smacks you in the head and forces you to cut costs. Most managers will look for any other costs they can cut before taking away people's jobs. When downsizing is the only choice, it's a sign of how badly management has failed, and the people who get hurt are invariably those who had nothing to do with creating the problem in the first place.

That is a tragedy. It is a terrible injustice. It may be necessary in some circumstances, but it's something most people would work very hard to avoid. I frankly don't understand how some CEOs can take away the livelihood of thousands of people and then pocket millions in bonuses and stock gains.

Preventing layoffs is management's responsibility. It's management's primary responsibility. In a sense, it's management's only responsibility. Because to prevent layoffs, you have to do a lot of other things right. And you're much more likely to do them when you're constantly reminding yourself that jobs are at stake and that you're responsible for the livelihood of real people who have put their trust in you. …

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