Employees who are the top performers and are consistently producing high-quality work are the ones ... [+]
Amazon announced in a blog post its plans to lay off 10,000 employees, representing 3% of its white-collar professionals in corporate and technology roles.
The cuts will primarily focus on money-draining units, such as Amazon voice-assistant Alexa and ebook-reader Kindle. Human resources will also be impacted, indicating that hiring will slow down compared to the aggressive staffing that took place over the last several years.
Although the number seems high, it represents 1% of Amazon's more than 1.5 million workers, including hourly warehouse employees.
This won’t be a one-and-done. In addition to the layoffs announced Wednesday by Dave Limp, senior vice president of devices and services at Amazon, there are numerous ways that the online retailer and other tech companies lighten their headcount. While most firms will deny that they use these strategies, tech workers cite that people are let go or pushed out the door through stack rankings, regretted and unregretted attrition, performance improvement plans and continuous rounds of downsizings.
The Tech Sector Needs To Turn Things Around
Andy Jassy took over as CEO in July 2021 after founder Jeff Bezos stepped down from the position. The former Amazon CEO presided over the online-retail juggernaut and built it into one of the largest companies in the world. Jassy is now in the unenviable spot of having to navigate a contracting economy, characterized by record-high inflation and interest rates that are both hurting the consumer, as their money doesn't go as far as it used to only a year ago at this time. Amazon’s stock has plummeted more than 40% in 2022—its worst year since the financial crisis in 2008.
After his $44 billion acquisition of Twitter, Elon Musk reportedly gave the employees of the social media platform an ultimatum: commit to the new “hardcore” Twitter 2.0 or leave with a severance package. Musk expects his staff to put in long hours and work with intensity, as he desires only those who exhibit exceptional production. Employees were told to respond to an email by Thursday affirming whether or not they want to remain at the company. This week, Musk also fired an engineer that has publicly criticized him. Since his takeover, the new Twitter owner has laid off at least 50% of the social media company’s staff.
By comparison, Meta managed to manage roughly 11,000 people more humanely. Founder and CEO Mark Zuckerberg laid out in a memo to employees the terms, including severance packages, healthcare and career assistance to find a new job.
The startup and tech sectors have cut 134,164 jobs in 2022, according to Layoffs.fyi.
Snap, Apple, Microsoft, Intel, Stripe, Lyft and an array of other tech companies have enacted layoffs and hiring freezes and rescinded job offers.
What Is Stack Ranking?
Stack ranking has a negative connotation. It is the process of ranking an employee by evaluating their performance relative to their peers rather than on how they produce relative to their job description. Managers rate staff as top, average or low performers. This rating leads to a bell curve: the top 20% are called top performers, the middle 70% average performers, and the bottom 10% low performers.
General Electric, run by the legendary Jack Welch, initially started this practice and saw strong results. During the 1980s, Welch was highly regarded, and other businesses began to emulate his management practices.
The rankings made it easier to isolate the winners from the supposed losers. Employees who are the top performers and are consistently producing high-quality work are the ones that will qualify for and be considered first for career-advancement opportunities. This helps reduce workplace bias and clearly frames what employees need to do to become high performers.
Detractors of this model claim that it makes the workplace too competitive and hostile. Instead of breeding collaboration, out of fear, employees will look out for their own interests to survive and not get cut.
What Is Regretted And Unregretted Attrition?
Regretted attrition is when people, of their own volition, decide to leave the company for better opportunities. In an unaccommodating economy, the departing talent won’t be replaced to keep the headcount down and save money. Unregretted attrition is when people are viewed as lacking. They are slated to be laid off. Alternatively, to save face, human resources will be open to accepting a resignation and offering a severance package. The person avoids the stigma of being managed out, and with a nice check that lasts for three to six months, eases the pain of being in between jobs.
PIPs Sound Cute, But They’re Dangerous
Leadership picks out people who are not producing at the level of expectations. These folks will be placed on a performance improvement plan (PIP). It's code for “if you don’t improve quickly, you’re out of here.” There is a lot of stress and pressure that comes along with being put on a PIP. You need to exceed expectations and demonstrate impressive achievements. If not, you’ll be packaged out.
Layoffs aren’t always fair. For instance, in the Alexa division of Amazon, the metaverse team at Meta or in any role that Musk presides over, there is a risk of being downsized. You could be a rockstar, but if you are in a division that is hemorrhaging money, you may be let go, as the group can no longer support the overhead and salaries.
How To Manage Your Career
During times of crisis, when companies are in layoff mode, you want someone in your corner to stick up for you, and help you survive. Rick Chen, a senior director at Blind, the anonymous posting site catering to tech, Wall Street and management consulting professionals, suggests you need to find a sponsor or mentor. The sponsor can work backchannels to find you a new role within the company, in a unit that is not affected by layoffs. A mentor can continually offer guidance and advice to help steer your career in the right direction and avoid the pitfalls that the sponsor had to learn on their own.
Even though your company may be cutting costs and the future looks bleak, don’t give up hope. Double down on your efforts. Go into the office every day and make yourself known. Put in the hours and be productive. Make sure that your supervisor and their bosses know about your accomplishments. The goal is to become irreplaceable.
At the same time that you are becoming indispensable at work and gaining attention by the proximity bias of being in the office, you should also stealthily seek out a new job. Find a few recruiters who specialize in your field. Set up a meeting so they understand your job responsibilities, background, skills, talents, education and what you want to do next. Be open to letting the headhunters know the base, bonus, stock, benefits and work style you desire. As you diligently work at the office, the recruiter will keep an eye open for new opportunities on your behalf.
