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Morals and Layoffs
Radical changes in modern institutional structure have ushered in an era of short-term, contract, or episodic labor, writes economist Richard Sennett in his book The Corrosion of Character. Corporations have sought to remove layers of bureaucracy, to become "flatter and more flexible" organizations. In place of pyramid-style organizations, management wants now to think of organizations as networks. This means many more layoffs, writes Sennett, and also that promotions and dismissals tend not to be based any longer on fixed rules, since tasks are fluid, and the network is constantly redefining its structure.
Executives are paid more and more to re-shape companies, and work becomes less stable in direct proportion. Workers have never been more powerless, their tenure more fragile. Tech workers, many of whom came of age in an era of growth and full employment, are learning the lessons of the real world quickly. Tasks and missions are temporal, the people employed to execute them highly disposable. Work and workers are both flexible and expendable.
One of the most shocking and widely accepted tenets of the new techno-workplace is that the well-run company, the one that wants to compete in the global economy, has to be so fluid, evolving and responsive to change that thousands of employees can get dumped at one whack and it's not even controversial. That's a pretty long trek from the capitalist ethic that only a few years ago valued corporate loyalty as much as profits, and touted the company-employee bond.
And it raises all sorts of new questions -- especially for a generation of tech workers experiencing layoffs for the first time.
In the Corporate Republic, where corporations fund the political system, control most mass media, write legislation, and now dominate entertainment and culture (and soon, much of technology, from bio-tech to Net access), there are few agreed-upon rules about layoffs. Hardly any would get far in Washington, the world headquarters of corporate lobbying. (Congress, allegedly the public's lobbyists, are scrambling to get campaign funds from corporate donors.)
Unions, already on the wane, have never gained much hold in the Tech Nation, populated by educated, mobile, skilled and independent-minded workers. Some tech companies are comparatively generous -- extending health plans beyond the federal requirements with some benefits extending past a layoff date.
Cisco has offered to pay its laid-off workers for an additional year if they work for charities the company supports. It's nice, but it isn't the same as job security. And even that kind of moral responsibility is rare.
Under COBRA (The Consolidated Omnibus Budget Reconciliation Act) passed by Congress in l985, some laid-off or terminated workers (those fired for reasons other than gross misconduct) are entitled to continuation of health benefits for extended periods of time. COBRA doesn't cover companies with fewer than 20 employees, and it doesn't cover all workers terminated under all circumstances. If the company goes bankrupt, for example, COBRA doesn't apply at all. You have to check and see if you're eligible.)
Corporations have no particular incentive to be generous, or even ethical, to terminated employees. Most answer to boards of directors and demanding shareholders expecting maximum profits. Generosity towards workers doesn't serve the bottom line, even when it might serve the company's long-term interests. One of the reasons Cisco treats laid-off workers well, company officials have conceded, is to keep morale high among remaining employees, who feel better about the company and the work they do for it.
All sorts of class issues are roiling the new, techno-driven workforce, amid the thousands of layoffs being announced weekly.
The layoff was once the more or less exclusive province of the working class. but in recent years -- and especially recent months -- it has become a fixture of the white-collar and managerial universe, and of skilled, educated, tech workers. U.S. employment figures show the number of workers on nonfarm payrolls plummeting.
Now lawyers and journalists are getting laid off as well as tech workers, and when reporters started hitting the sidewalk, layoffs became a big story in a hurry.
Yahoo, Dell, AOL Time-Warner and scores of other companies have collectively let go of hundreds of thousands of employees (soon, probably to be followed by layoffs at the new company formed by Hewlitt-Packard's acquisition of Compaq). A generation of tech workers, for the first time, is feeling the impact of a workplace in which corporations seem to feel virtually no moral obligation to the employees they let go.
So just what moral obligation does a company have to laid-off workers?
Some possibilities:
- Maximum warning. Employees ought to have between three and six months' notice before they're laid off, time enough to look for other work in a sane, secure way.
- Continued health benefits. Employment used to be a contract: you worked hard for the company, the company took reasonable care of you. Employees who have been with a corporation any length of time at all -- I'd say six months -- ought to keep their health benefits until they find new work, a guarantee not even COBRA provides.
- Innovative responses. The layoff has become almost a corporate reflex, a statement to analysts, boards of directors and stockholders that management is lean and mean. When the market drops, capital gets squeezed,or takeovers occur, employment gets slashed. This often seems short-sighted. Tech workers are skilled and valuable. It's difficult to predict the nature of technology, and of consumer attitudes towards technological products and innovation. People laid off today might be urgently needed in six months. Shouldn't they at least have a chance to come up with other tasks, products, functions or ideas before they're booted out?
For that matter, tech workers could seek out companies with humane policies towards their workforce, making the companies more valuable and competitive. They could also begin demanding contracts and codified job security when the seek and accept positions -- especially when the economy is in their favor.
Regulatory agencies consider the impact of corporate decision-making on the environment, the consumer, and on anti-trust issues. Why aren't consideration of layoffs and job losses a factor in mergers like that between AOL and Time-Warner, or Hewlitt-Packard and Compaq? Maybe the loss of thousands of jobs isn't worth the short-term savings of some mergers.
Let's not kid ourselves. In the Corporate Republic, we can't expect companies, governments, unions or regulatory agencies to strengthen a sense of corporate morality or humanity. Corporations are more powerful than any of these entities, as tech workers are discovering by the thousands. Workers are on their own. Companies will demonstrate loyalty when they re-gain a sense that it's more efficient, ultimately more profitable, to keep experienced loyal workers than to employ insecure short-term ones. That's possible. But it isn't likely.
@home just layed of 500 more people with no severence package at all - just payed through the day. As an employee I am weighting my options as the musical chairs of my job can't work for me if I'm going paycheck to paycheck. Blah.
Boy, jus tlike Katz to pick up a 30 year old trend and call it new.
Of course, in the '70;s it was blue collar workers like steel and auto workers.
In the early 90's it was mid level managers.
Now it's affecting geeks who's geekiness is being able to start Front Page and write wysiwig web pages.
As someone who worked through the 90-91 recession, this is nothing new, keep your skills up to date and keep rolling with the punches.
I've been made redundant twice this year.
After working for Grey Interactive UK for 18 months the tech slowdown eventually forced them to loose staff. throughout this process we were consulted and kept up to date with goings on, and when it came to the inevitable announcement I was one of approx 30% of the company. I was told that GIUK would try to place me with another Grey company, and if unsuccessful, within a month I would be made redundant. I was free to use the facilities to print CVs, browse the net, and generally look for work. I chose not to pursue a relocation to another Grey office, and spent most of the time out of the office, however, it was good to know there was some support there.
I found work with a company called Zinc a few weeks later and things were looking up, however after five weeks (yes weeks) I was called up, out of the blue with no forewarning. I was told their parent company was asking then to make redundancies (much like grey), and as it was a Last in First Out basis, I was to go.. I was escorted out the building and given a weeks notice pay.
in retrospect I feel I was treated fairly by Grey and discovered that small things can make such a huge difference in how you perceive you are being treated.
I think the most important thing is to keep your employees informed. It was such an amazing shock to me and I still feel rather bitter about it (while having fonder memories of my time at Grey (of course I was pretty pissed off about it at the time))
I have since found a new job... far from ideal, however beggars can't be choosers in the current tech climate
EMACS?! VI?! I target the individual bits on my HDD by diverting the path of cosmic rays through sheer willpower alone!
The Worker Adjustment and Retraining Notification Act (WARN) at http://www4.law.cornell.edu/uscode/29/ch23.html#PC 23 will tell you a lot. Such as why companies dribble layoffs instead of letting everyone go at once, even when the executives know that's what they'll end up doing.
US Code as of: 01/23/00 CHAPTER 23 - WORKER ADJUSTMENT AND RETRAINING NOTIFICATIONSee also http://www.ibmemployee.com/ for some insight into retirement benefits.
-- 3.14159
(Dammit -- mod the other one down. That's what I get for posting from unfamiliar machines and not using preview)
Under COBRA (The Consolidated Omnibus Budget Reconciliation Act) passed by Congress in l985, some laid-off or terminated workers (those fired for reasons other than gross misconduct) are entitled to continuation of health benefits for extended periods of time. COBRA doesn't cover companies with fewer than 20 employees, and it doesn't cover all workers terminated under all circumstances. If the company goes bankrupt, for example, COBRA doesn't apply at all. You have to check and see if you're eligible.)
COBRA, my ass. When I got laid off earlier this year I found out I could keep my health benefits for slightly more than my rent, paid every month.
Oh, and I'm single. That's not even for the "family plan," which was a good _double_ my half of the rent.
Somehow, this doesn't seem like a terribly helpful program to the typical tech worker who's been dropped like a used tampon or a worn out dream.
--saint
I was laid off 2 months ago by a small consulting company. There were 3 developers and the highest paid 2 were sent packing.
:).
This was really a devestating blow for both of us who were laid off. The other guy had gotten back from sick leave. His kid had been diagnosed with cancer and had to go through 2 surgeries, the second was a couple of days before we were laid off. He's also going through a divorce. I was truely afraid that he was going to snap.
It was my first job after graduating from University and I only had been there 3 months (2 years part time before that). I was just starting to pay back my student loans. I had just gotten a new apartment that was a little more in line with what I was making.
I'm moving out of my apartment today. I'm taking a break from packing boxes right now.
I have to say that I feel very betrayed by my former empoyer right now. I felt horrible when I was laid off, but I got over that rather quickly. My former empoyer promised that as soon as they got more work that they would hire us right back. I also got a few interviews (I was completely insulted in one of those interviews. I was offered $15/hr to program Java, c/c++, perl, ASP and coldfusion as well as design and program databases - is this what the economy has left us with?) and a few contracts to help pay (some of) the bills. A couple of days ago I found out that the person left behind was given a (rather large) raise and is now between myself and the other guy who was laid off in terms of salary.
I compared what I have been going through to a kick in the teeth followed up by a kick in the groin.
I confronted the person who got the raise and she told me that it was true. The next day I got a call from my Former Employer and she told me that I had upset the other developer and should apologize.
To anyone who's still reading, thank you, I needed to rant somewhere and my friends and family has gotten sick of my bitching
Thank you for the timely article, Jon. I could really relate to it.
I think the nature of the IT industry is that we get huge salaries to start (I did anyway), but it's almost expected that we could lose our jobs at any time. My layoff came as a complete surprise to me and everyone in the company. Everything was fine in the morning and in the afternoon my bosses were in my office with the door closed laying me off. I do suggest to treat your job like a contract. Stuff as much money away as you possibly can while you have it. You won't know when you'll have a job next.
-j
Like sex? Read and write about it! Indecent Blogging
Sometimes the best solution to morale problems is just to fire all of the unhappy people...
I must say, on a more serious note, that I'm in the middle of a great book as I write this that I'd highly recommend to all. It is by Thomas Frank, the author of The Conquest of Cool and Commodify Your Dissent(some essays in it, anyway).
The book is One Market Under God . It is a profoundly engaging read, and discusses more than the matter of the eroding social contract that Katz touches on (and someone else rightly notes has been worsening over decades). It really delves deeply into mid-to-late 90s "New Economy" mythology- examining the religious texts of the myth (FastCompany, RedHerring, Wired (esp. Kevin Kelly's insufferable and blasphemous revisitations of the original luciferic lie itself, we-shall-be-as-gods!)), the Gods of the religion (the dotcom wunderkinds, the new economy billionaires, the venture capitalists, etc.), the mad prophets of the religion (Tom Peters et al), and of course, the religion itself- our New Economy!
HIGHLY recommended.
Yes, but you have to pay for it yourself. Which is difficult when you are unemployed. My COBRA currently costs $435 per month for me and my wife. Almost exactly half my unemployment check.