As I walked to my car from class recently, I found myself experiencing déjà vu. A student in my MBA class at San Jose State University was distraught after being laid off from a Silicon Valley tech company in a Zoom call. After working there for 17 years, she was instantaneously cut off from all connections at the company.
I saw the same level of shock, pain, anger and disbelief as I had witnessed in 2008. I was teaching in Chicago when a student in my MBA class shared that she and other employees had been given notice and instructed not to return to work until notified if they had a job. She sat in class preoccupied and stressed not knowing what was next for her family.
We all found this to be cruel and heartless. Then another student shared that his company was escorting employees off the premises carrying boxes of their personal belongings daily. These are among countless stories of what employees endured during the Great Recession.
While technology now allows for virtual layoffs, the heartlessness of 2008 remains intact. Amazon, Meta, Microsoft, Twitter and Google are among the companies subscribing to the same cruel approach in their recent job cuts. Now there is no physical office to clear, no yellow or pink slip, no box to carry out — just a blank screen to stare at. Instantly cutting employees off from the entire organization, including friends and colleagues, has become the new norm.
The focus on short-term reduction of headcount loses sight of compassion, respect and dignity for employees — and the investment made in their precious human capital. When the economy recovers — and it will — these employers will find themselves struggling to attract, hire and retain their top talent.
They will wonder why their best employees leave. Company review websites such as Glassdoor have become a “go to” for providing information when searching for jobs, as well as social media such as TikTok. The treatment of employees is now well-chronicled and readily available.
A company that puts people over profits is Cedar Fair Entertainment Co. They were forced to fully or partially shut down their parks due to COVID in 2020-21. Their revenue dropped significantly, but their executives decided not to lay off any of their 2,200 full-time employees and implemented a deferred pay reduction program.
Retaining their best talent allowed them to develop industry-leading protocols that helped the industry rebound once COVID restrictions were eased. They were minimally impacted by the Great Resignation. They have been able to attract former employees from other major theme parks such as Disney, SeaWorld, Six Flags and Busch Gardens and reported record results for 2022.
Well before the dust settles in heartless organizations, quiet quitting will rear its head. In over 30 years in HR, I have watched this play out over and over, yet companies continue the same patterns. Studies show that nearly three-quarters of employees retained after a layoff saw their productivity decline, and 69% reported that the quality of their company’s product or service deteriorated. Another study found that layoffs targeting 1% of the workforce, on average, led to a 31% increase in voluntary turnover.
The effect that treatment of employees during turbulent times has on a company’s employer brand is often not taken into account or even acknowledged. Reorganizing, restructuring, downsizing, rightsizing and quiet layoffs will inevitably decrease productivity, engagement and loyalty.
Without respect, dignity and compassion for all employees — those who are let go and those who stay — the emotional baggage left behind in these companies will have significant short- and long-term effects.
Monica C. Gavino is a professor at San Jose State University.
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