Firms often don’t comprehend the extent of the damage that continues internally, as well as externally, after layoffs.  There are several reasons to take these all into consideration.  Once you understand them, you stand a chance of better mitigating them, and it also refines your layoff plans.  This improves your odds of long-term success.

The key item that so many firms seem to dismiss as minor is that the layoffs make many of the current employees much more anxious.  This lack of security makes productivity and morale decline.  The firm will likely also see stellar employees decide to move on sooner than expected.

The second critical risk is that when business does pick up, the firm does not have employees ready to take the technical meetings, or to implement and support the solution.  Remember, many technical roles take 3 to 6 months to enable.  They laid off part of that onboarded team.  A team that they now need, one that is even smaller as other star players moved on.

And that growth in business will be slowed since often competitors grab up the employees that were let go.  Typically they are skilled talent, only let go because their experience and skills make them more expensive to keep.  Even having them just interview with competitors will cause harm.  They won’t disclose confidential information, but they can infer or imply certain items that the competitor can leverage with FUD.

If the company is still able to grow its business, it will find itself hamstrung when later attempting to hire.  I know I personally reach out to past employees that had short tenures when considering working for a firm.  You’ll find them to be very candid and honest.  Even if I can’t get in contact with them, I’ll search for (and often find) posts expressing their disappointment.

As for other sources, Glassdoor reviews should be taken with a grain of salt.  That being said, if you see a pattern, take it seriously.  Be aware that firms have ways where they are able to get Glassdoor to remove  reviews.  I personally have had this happen several times for reviews that I felt did not violate their policies.  On a tangent, if a 200 employee firm that is 5 years old has 150 reviews on Glassdoor you need to be skeptical.  Firms with 1000 employees rarely have 150 reviews.  The likely reason is that they are pressuring employees to leave positive reviews.  Or worse – posting fake ones.

Another item that potential later employees will find out is the size of the severance package.  There are long-term reasons why firms like Facebook gave severance packages of 16 weeks base pay.  They knew there would be plenty of press about the numbers.  I had interviewed at several of the firms that had large layoffs.  I’m actually wishing I had actually joined.  The packages were exponentially better than I experienced.  The fact is I’d still consider working for one of those firms in the future.

But firms that give only 2 to 4 weeks of severance?  Employees only rationalize two possible reasons.  Leadership sees employees as expendable and doesn’t care.  Or they didn’t manage their cash well enough to be able to provide a decent severance package.  A reputation like this will be another hindrance to their (soon-needed) growth.

Lastly, layoffs reflect poorly on the firm’s leadership.  Employees are very aware of when a company mismanages money.  Some items will be obvious, like large and extravagant offsite just prior to the layoffs.  They also are aware of items like founders expensing family trips to Disneyland under the guise of “customer visits.”

Tech is uncertain.  Risks will be taken by all.  Be very aware of the long-term internal and external repercussions of how you handle layoffs.

Disneyland Photo by Brandi Alexandra on Unsplash

Spain Photo by Reiseuhu.de on Unsplash

Looking Up Photo by Razvan Chisu on Unsplash