In January 2024, more than 20,000 people have been laid off. Most of the reduction in force is in the tech industry. Tens of thousands of folks across other sectors, from start-ups to mid-size companies, are experiencing the same fate. For some workers, it’s unexpected, while others knew it was only a matter of time. Cuts will continue throughout the first quarter. People are left wondering, why me? Let’s look at how making the list is decided regarding layoffs.
Who stays
Companies use four (4) buckets of headcount to determine who goes and who stays. Let’s label the buckets as Need, Cut the Fat, Non-productive, and Disengaged. The company first looks at what is needed to remain functional. These are the headcounts necessary to run the business on a day-to-day basis. These employees will stay in place. Most will take on a bit more responsibility from those who exit. Not out of desire but to preserve their place in the company. The following three (3) buckets are the people who need to go:
The Go List
Cut the Fat
Tech companies have been shedding employees left and right for a while now. They over-hired during a saturation period and need to shrink to increase profitability. Overall, too many contractors, accounts payable, human resource personnel, production coordinators, and high-level managers don’t contribute to the bottom line. After some analysis, the company recognizes that others can fill roles at a lower cost. Unfortunately, all those folks have to be eliminated as the savings on overhead increase end-of-year numbers.
Non-Productive Staff
Some workers can never meet a project deadline. Everything they turn in is half-done or incorrect. They take no initiative to get tasks completed. The staff member just clocks in to be able to say that they are present to collect their pay. The company is not getting the output that they want from the individual. It’s time and money spent with little to no results. These individuals get a pink slip.
Disengaged Staff
These people do the tasks they enjoy and mess up the rest. If you call them out on something, they merely apologize and keep incurring the same infractions. Staff members that never volunteers but will complete all assignments fit into this category. There is usually no enthusiasm, and whatever they don’t understand, that part gets skipped. These individuals are indifferent about exiting the company because they weren’t sure whether or not they wanted to be there in the first place.
End Result
Of course, the financial analysis plays a significant role in the decision to have a reduction in force. Each one of the buckets has a dollar value attached. You can be the best worker and become a part of how making the list is decided. It’s all boils down to dollars and cents. They can ask you return in the future or receive a glowing recommendation from your previous manager. Shareholders have to obtain a return on investment. It’s unfortunate that it has to upset your livelihood in the process.