Silicon Valley, home of so many technological and workplace innovations, is rolling out another one: the unnecessary layoff.
After shedding over 260,000 jobs last year, the greatest carnage since the dot-com meltdown more than two decades ago, the major tech companies show little sign of letting up in 2024 despite being mostly profitable, in some cases handsomely so. In their words, the tech companies are letting people go to further the continuing process of aligning their structure to their key priorities, or “transformation” or becoming “future ready.” Behind these generalities, however, some tech companies are using what has hitherto been an extreme measure in order to engineer a short-term bump in market sentiment.
Investors are indeed thrilled. Meta’s shares are up over 170 percent amid its downsizing talk. And where stock prices go, chief executives will generally follow, which means it is not likely to be long before the unnecessary layoff makes its appearance at another publicly traded company near you.
These layoffs are part of a tide of disruption that is continually churning the work days in corporations everywhere. If you’ve spent any amount of time working at a company of pretty much any size, you’ll be familiar with what I call the resulting “life in the blender”: the unrelenting uncertainty and the upheaval that have become constant features of business life today. A new leader comes in, promptly begins a reorganization and upends the reporting relationships you’re familiar with. Or a consultant suggests a new strategy, which takes up everyone’s time and attention for months until it’s back to business as usual, only with a new mission statement and slideware. Or, everyone’s favorite: A merger is announced and leads to all of these and more.
Now, no business prospers by standing still, and there is no improvement without change. Course corrections, re-orgs and strategic pivots are all necessary from time to time. Technological changes continue to demand the restructuring of major industries. But over the last quarter-century or so, the idea of disruption has also metastasized into a sort of cult, the credo of which holds that everything is to be disrupted, all the time, and that if you’re not changing everything, you’re losing.
You can take courses in disruption at the business schools of Stanford, Cornell, Columbia and Harvard. You can read, on the cover of a leading business magazine, about how to “Build a Leadership Team for Transformation: Your Organization’s Future Depends on It.” And if it is the catechism of chaos you’re after, you can buy the inspirational posters and chant the slogans: Fail fast; disrupt or be disrupted; move fast and break things. Part of this, of course, is a product of the hubris of the Silicon Valley technologists. But part, too, is the belief that the fundamental task of a leader is to instigate change. It is hard to remember a time when there was any other idea about how to manage a company.
Moreover, because a majority of corporate executives — together with the consultants and bankers who advise them, the activist investors who spur them on and the financial analysts who evaluate their efforts — have been raised according to this change credo, the constant churn becomes a sort of flywheel. A leader instigates some change, because that’s what a leader does. The advisers and investors and analysts respond positively, because they’ve been taught that change is always good. There’s a quick uptick in reputation or stock price or both, the executives — paid, remember, mostly in stock — feel they have been appropriately rewarded for maximizing shareholder value, and then everyone moves on to the next change.
But it’s hardly clear that this is having the desired result. Studies of merger and acquisition activity have pegged the rate at which they destroy — rather than increase — shareholder value at something between 60 and 90 percent; a Stanford business school professor, Jeffrey Pfeffer, has argued that layoffs seldom result in lower costs, increased productivity or a remedy for the underlying problems in a business; and few of us who have lived through re-orgs remember them as the occasion for a sudden blossoming of productivity and creativity.
Seen through the eyes of the people on the front lines, the reason for this gap between intent and outcome comes into tighter focus. After all, when the people around you are being “transitioned out,” or when you find yourself suddenly working for a new boss who has yet to be convinced of your competence, it’s a stretch to persuade yourself that all this change and disruption is leading to much improvement at all.
“It’s exhausting,” one person I spoke to about change at work told me. “It’s soul-sucking,” said another. One person told me that after the combination of two departments, his people were like deer in the headlights, unsure of what they should be working on.
Of the dozens of people I spoke to, every single one had some sort of change-gone-bad story to share. And these sorts of reactions are about more than simple frustration or discontent. They are rooted in the psychological response we humans experience when our sense of stability is shattered and our future feels uncertain, and indeed the scientific literature has much light to shed on exactly why life in the blender is so hard on us.
Experimenters have found, for example, that our stress is greatest when uncertainty, not discomfort, is at its peak — and uncertainty is the calling card of change at work.
But while the essential response of the human animal to uncertainty and disruption is hard-wired, the degree of change we introduce into our workplaces isn’t. It’s often a choice. We’ve reached this point because the business world seems to have decided that change is an unalloyed good, and so there is no amount of it that is too much, and no cost of it that is too great.
Were more leaders to be guided by the science of change, or by the stories that people on the front lines share, they would quickly discover that it is stability that is the foundation of improvement. Only once we begin to honor people’s psychological needs at work, by thinking twice before launching into the next shiny change initiative and by paying more heed to the rituals and relationships that allow all of us to point our efforts in a useful direction, can we begin to do justice to the idea that a company must be, first, a platform for human contribution if it is to be anything else at all.
The New York Times
