Sometimes you can't give everyone a pony.
There simply wasn't any money. That's the essence of running in financial distress. No banks, no loans, insurance support payments got swiped by other people we owed money to... You're running on the cash in the till.
We started with 500 jobs, most of which were union gigs with benefits. About 50 were still with us a week later, when this brutal end game went into full effect.
The cost of failure for this nasty little endgame for the 50 survivors, the quest for a sustainable business? We were an older union workforce, operating in an area with young non-union shops with sketchy labor policies. Our local employees were getting offers for $12 / hour with no benefits. Or a 40%+ drop in compensation for office staff due to age discrimination.
That's the difference between retiring for a nice middle class lifestyle and eating cat food for your golden years. Fifty lives fucked up, for loyal company soldiers.
So yeah, I wanted to keep the company alive to save jobs.
I'm a high end mercenary; I had an offer within a week of formally rolling off the program and plenty of consulting work to tide me over. My only prize here was moral satisfaction.
I'm not suggesting you can, I'm suggesting it's bad to give some people the boot and others a pony in the hope of saving an abstraction. The company doesn't exist outside of the people whose livelihoods it sustains.
And in a financially constrained endgame, you have to make choices about who to keep and cut.
Cutting that senior sales executive will cost 20 other jobs due to lost business and downstream implications.
Cutting the factory worker costs zero other jobs.
The harsh reality is not everyone matters equally.
[and to be clear, I'm not talking about bullshit deals just because someone was "loyal" to the CEO. This is real talk, people who actually can deliver a path to group survival]
If you're lucky, they merely poach the stuff you cannot defend anymore. In most situations, they come after the crown jewels of the business, accounts which create the lions share of the revenue and profits which funds the business.
And then you're screwed. Shut it down, pink slips for everyone...
So when it was "your turn", you're going to get tossed in the street with NOTHING to tide you over to your next gig.
Still feel like letting your family starve for the sake of "loyalty"?
I don’t have or want a family. And it’s not about loyalty to the company it’s about the other people working under me.
I have savings so I can afford to be unemployed, but still don’t understand your hypothetical.
Instead of using the last of the money to keep the 10% around on a hail-mary, spread that money around to 100% of the company so their crash landing is a little softer.
- You're trying to retain 5, not the 50.. the other 45 are objectively not-critical to the enterprise (in the sense we could eliminate or replace those roles).
- A large fraction of the 45 are basically screwed in the job market; most of them were older, had decades of very specific experience, or had worked their way up in an organization that valued effort/loyalty over credentials. Milking another decade of work in their current role has life changing consequences for these workers and their families. Many of them were primary breadwinners in a bad area, so their job was the last line of defense between a respectable lower-middle class existence and the trailer park for them and their kids.
- Current reality was not reflective of long run potential. If we could stabilize the business, not only would the 50 jobs in question be preserved but there was an opportunity to rebuild and hire back. (feel good moment: this actually occurred. The team was able to restart key areas of the facility and we rehired some manufacturing people)
Young, highly educated people have no concept of the degree of privilege they enjoy in the labor markets. That degree opens doors and you don't get tossed out the instant some hiring manager sees a little grey hair. You don't have 30 years of experience which immediately becomes the leading reason NOT to hire you for a job because someone thinks you're incapable of learning anything new.
Life basically sucks past 50...
In an environment where businesses have been operating on massive leverage for years, there's a fight brewing over who is going to get cash-flows and who will not, this obviously extends to workers who have outsized impact on whether any given business will stay open or file chapter 7/11.
If people insist on making choices that will continue to sink the ship, I don't have to go down with it.
I think this calculus flips around when your commitment has entered a stage where other peoples' livelihoods depend on it, basically. That's all. Get out before it springs a leak in an org like that, is my advice.
For you, not for others.
> Get out before it springs a leak in an org like that, is my advice.
I'll be fine for a long time even if the company goes under, others may not though, I've seen it happen way too many times to not be prepared for stuff like this. And I can just accept an offer from another place rather than outright reject them.
So I see.
>I'll be fine for a long time even if the company goes under, others may not though, I've seen it happen way too many times to not be prepared for stuff like this.
Yeah, and it's their problem up until the point at which the situation is unrecoverable without you, and even then it's still mostly theirs, but I would have a lot of hangups about acting in a situation like that.
It's business, things fail. The problem is that people have come to accept that things shouldn't fail has made it so that it has built up to the point where it is today. Id call this environment Dirac-delta solvency.
This is just asking for rude awakenings. History is full of these kinds of events of where people thought things shouldn't fail, never prepared for them, and they did.
> I would have less qualms about all of this stuff with a strong social safety net, but we don't have that in the US.
No one lives in an environment where one can miss-allocate resources indefinitely or under assumptions that somethings can never change.
When I say some things shouldn’t fail, I mean our collective ability to keep each other alive and well. Whatever business of the day can go fuck itself, I don’t care.
> No one lives in an environment where one can miss-allocate resources indefinitely or under assumptions that somethings can never change.
What assumptions are you talking about? I’m talking about welfare.
Welfare takes resources, takes people agreeing on what resources are acceptable for welfare and what is not, resources people have to produce and distrubute at some cost, takes people who may be better at managing such costs or inflating them to outsized proportions… any country that has deficits growing larger and larger every year can not continue to provide welfare indefinitely without making hard decisions that not all people will be ok with.
Some people may decide to leave for countries that are willing to make those hard decisions, rather than stay in those that want to punt on it until they face an analogous dynamic that Chinua Achebe has described pretty well.
Go ask the career restaurant workers how the year is going. Go ask the tourism guides and travel agents. Go ask their bosses how they intend to keep the doors open with an 80% decline in revenue.
Short answer: you can't.
I actually liked the company I just left. I liked the people and thought that the people in management up to and including management were all good people. I am usually far more cynical.
Post Covid, they decided to give everyone a pay cut instead of laying off people. This was morally the right thing to do in my opinion. It is a small company and I didn’t feel we had any dead weight.
I knew that in my position, the company would struggle a little bit. But what was I suppose to do? Stay out of loyalty or accept an offer that was a 60% increase in total comp at a more stable company?
- If we do not keep the highly paid senior sales rep, we're going to have no customers and thus... everyone gets canned. - They are objectively better off leaving for another firm, where they don't need to worry about impending doom. So we need to provide an appropriate incentive to prevent them from breaking ranks and screwing everyone else left behind. - The humble factory worker or customer service person doesn't have that same kind of impact on the whole....
Any moral conversation ultimately becomes a discussion about why someone with objectively better and safer options should continue to work for a company that is paying them less than market. Unless everyone else is willing to work for reduced salary / benefits and promise not to quit, that's not a morally tenable position....
Personally, I'd love it if people acted for the greater good. That's not going to happen here, unless you want to restrict people from changing employers and force them to show up to work...
How about this instead? Your company is overstaffed due to a massive drop in sales. You will run out of money and will have to fire everyone including yourself in one month. Your other choice is to cut 80% of the staff immediately and your business will make enough to pay everyone’s salary who remains.
The better choice for everyone is the surviving business, and that’s the one that puts more money in your pocket. Letting people go is a business decision and it’s very often the correct one. Good business decisions lead to making more money.
But that doesn't mean it's ethical to then throw money at your executives just to keep them around. If the business is viable with the smaller market and smaller workforce, then the executives should either stick around based on the company's future prospects, or leave. If they want to leave, then perhaps executives of their caliber aren't required to run the company given its new reality. Getting them to stick around by showering them with more money just increases wage inequality.
The bottom line is that most of the people who got hurt by a company's decline get zero say in how things go during that period, and obviously the people with the power are going to try to save the thing that signs their paychecks, even at the expense of the replaceable workers.