An Unanticipated Layoff
Wednesday, August 12, 2009
I work in a semiconductor firm. Last week, the company did an unanticipated 3% workforce reduction due to poor Q3 earnings forecast. In order to meet shareholders and business analysts' profit target, the top executives decided that slimming down the organization human resources is the right thing to do now. Many were shocked and upset with the action taken because predominantly the company has been perceived as one of the more stable yet profitable semiconductor players. Moreover, a few of the peer companies have revised upcoming earnings target, anticipating a positive trend in second half of the year.
Citing operating margin as the primary reason to reduce workforce, bottom performers, as well as, redundant job roles are easy targets to fill up the numbers. Many questioned these selection criteria and how the candidates were chosen. To most of the employees, the criteria are highly debatable, subjective and solely based on management description. Some argued that year of experience and amount of contribution should be the deciding factors. Newcomers who are inexperience and contribute little to the the growth of company can be sacrificed; old folks who are trained and have given help to the projects over the years must stay. Personally, I beg to differ. Although it seems cruel, in a corporate world, I agree with getting bottom performers out of the organization. They should move on to new endeavors which suit them more. In fact, it is not as cruel as it sounds. Often, those who are let go are able to succeed better in other industries or companies. Differentiation of top performers and the rest is a key element in a success organization. Management should cull the weak and cultivate the strong. If everyone is treated equally, companies suffer. To build a nimble and effective organization, tough and hard decisions need to be made and followed.
One might ask, is three percents adequate? If the magic number was chosen purely to answer the imminent quarterly report, I think the number probably should be bigger. One cannot undermine the impact of laying off tens of employees. Those left are gone, but those remain are equally disturbed by the layoff exercise. The relationship and trust built between employer and employee through years of hard work could easily tarnished if the employee cannot understand the criticalness of the exercise. And, not to mentioned some who have closer relationship with those left, this group of employees are likely more demotivated than the average. Hence, if the company expects gloomy economic environment to continue longer than expected and three percent is not the answer for the problem, I have to say a larger layoff should be done once and for all. Keeping employees in a demotivated working atmosphere, with fear and anxieties of loosing job certainly do not help the company to do well in the future.
Hopefully, things will turn better in the second half of the year. Wish those who have left good luck in their new career. :)
Citing operating margin as the primary reason to reduce workforce, bottom performers, as well as, redundant job roles are easy targets to fill up the numbers. Many questioned these selection criteria and how the candidates were chosen. To most of the employees, the criteria are highly debatable, subjective and solely based on management description. Some argued that year of experience and amount of contribution should be the deciding factors. Newcomers who are inexperience and contribute little to the the growth of company can be sacrificed; old folks who are trained and have given help to the projects over the years must stay. Personally, I beg to differ. Although it seems cruel, in a corporate world, I agree with getting bottom performers out of the organization. They should move on to new endeavors which suit them more. In fact, it is not as cruel as it sounds. Often, those who are let go are able to succeed better in other industries or companies. Differentiation of top performers and the rest is a key element in a success organization. Management should cull the weak and cultivate the strong. If everyone is treated equally, companies suffer. To build a nimble and effective organization, tough and hard decisions need to be made and followed.
One might ask, is three percents adequate? If the magic number was chosen purely to answer the imminent quarterly report, I think the number probably should be bigger. One cannot undermine the impact of laying off tens of employees. Those left are gone, but those remain are equally disturbed by the layoff exercise. The relationship and trust built between employer and employee through years of hard work could easily tarnished if the employee cannot understand the criticalness of the exercise. And, not to mentioned some who have closer relationship with those left, this group of employees are likely more demotivated than the average. Hence, if the company expects gloomy economic environment to continue longer than expected and three percent is not the answer for the problem, I have to say a larger layoff should be done once and for all. Keeping employees in a demotivated working atmosphere, with fear and anxieties of loosing job certainly do not help the company to do well in the future.
Hopefully, things will turn better in the second half of the year. Wish those who have left good luck in their new career. :)
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