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The Tech Industry's Legacy: Creating Disposable Employees
An anonymous reader writes: VentureBeat is running an indictment of the tech industry's penchant for laying off huge numbers of people, which they say is responsible for creating a culture of "disposable employees." According to recent reports, layoffs in the tech sector reached over 100,000 last year, the highest total since 2009. Of course, there are always reasons for layoffs: "Companies buy other companies and need to rationalize headcount. And there's all that disruption. Big companies, in particular, are seeing their business models challenged by startups, so they need to shed employees with skills they no longer need, and hire people with the right skills."
But the article argues that this is often just a smokescreen. "The notion here is that somehow these companies are backed into a corner, with no other option than to fire people. And that's just not true. These companies are making a choice. They're deciding that it's faster and cheaper to chuck people overboard and find new ones than it is to retrain them. The economics of cutting rather than training may seem simple, but it's a more complex calculation than most people believe. ... Many of these companies are churning through employees, laying off hundreds on one hand, while trying to hire hundreds more."
But the article argues that this is often just a smokescreen. "The notion here is that somehow these companies are backed into a corner, with no other option than to fire people. And that's just not true. These companies are making a choice. They're deciding that it's faster and cheaper to chuck people overboard and find new ones than it is to retrain them. The economics of cutting rather than training may seem simple, but it's a more complex calculation than most people believe. ... Many of these companies are churning through employees, laying off hundreds on one hand, while trying to hire hundreds more."
Hire a new FTE programmer/H1B programmer for 50% of the fired employee's salary = 50% savings.
UPS Sucks
As someone who is "surplussed" and "losing" my job in March, it's the norm (3rd time in less than a decade.. Buyouts, contract losses, etc). Just don't complain when your newly hired $150k/year wunderkind jumps ship 3 months later for someone offering more. You've created a "fuck you, I've got mine" bed, and we're all laying around in it.
In many or probably most cases, the companies doing the layoffs are simply cutting headcount as a fast way to get a short term improvement in the company's bottom line and thus cause the stock price to go up or at least stay where it is. Cisco and IBM are both notorious for playing this game. IBM simply moves the job to a cheaper foreign country where they have an office and Cisco just hires new H1-B visa workers at a much lower price than the American citizens they laid off.
When you hire tons of people especially quickly, you're going to have a lower mean of high quality people. Churn can be as stated, but also a common part of the industry, is to find a way of increasing the quality of your employees. Fire the worst, replace them with better. Rinse and repeat. Sometimes its about a body, any body, to move the ball forward. Then it's about getting better and better people. It's not just about training, it is still largely a talent based industry, where the majority of the progress is made by a minority of the people.
to greedy, laissez-faire, unregulated, globalized, secret-trade-agreement-favoring, trickle-down, uncaring, 1% favoring capitalism.
Republicans out there -- you voted for it, you got it. As they like to say, "To hell with you, Jack, I'm all right."
Although this problem needs a solution, a union is not that solution. Unions are a relic of a bygone era. The core premise of a union is that employes are all the same and can be swapped in and out of work like parts in a machine (once they are trained). This leads to collective bargaining which takes back some of the power that big employers have. However it also removes individuality from the worker. If I am smarter, stronger, or more skilled than my coworkers, I want to be able to elevate myself based on my merits. A union interferes with that. You pay a union, and the union acts only in its own best interest, not in your individual best interest.
Modern skilled workers, especially in the IT and Engineering fields, are usually very specialized. This is not a good fit for a union. It would be ill advised to take a good thing and remove all motivation for creativity and the free flow of invigorating talent.
A better solution is to simply prevent large corporations from getting away with their bullshit. No "gentleman's agreements" to prevent poaching. Stop accepting lies regarding layoffs and market performance. Reward employers for using home-grown talent rather than rewarding them with tax loopholes for moving overseas.
"Here Lies Philip J. Fry, named for his uncle, to carry on his spirit"
....disposable employers.
When the market is doing well, which is almost all the time since I been in IT in my area, it's not hard to find jobs. So if somebody comes along and offers me more money, equal hours (or better) and equal or better working conditions, well let's just say I have a macro'ed resignation word doc that fills in date and employer name. Why? Because I know if the tables where turned, they would not hesitate to put my head on the chopping block.
Loyalty is for suckers.....
Do I like it this way? No, but this is the world we live in.
Big business is in thrall to the MBA's and their "scientific" management. If something can be measured, it's legit; if something can't be, it isn't. The thing is though is that, at any point in time and given any development in statistical research methods, some things are going to be more easily measured than others. If you have a business culture that believes you're clear-eyed and sensible when looking at numbers, but wishy-washy and "unscientific" when going by experience and gut feelings -- and, even worse, if you have a similar investor culture financing the whole thing -- you will run into trouble.
It's the numbers guys firing people with experience (and the judgment that comes with it), and replacing them with spanking brand new rock stars, or foreigners with well-crafted resumes. Add up the columns, contact human resources, collect your bonus check. If it all goes wrong several years down the road, you'll be working somewhere else anyway. That's the business model we're all suffering under.
quiquid id est, timeo puellas et oscula dantes.
Hire another local programmer at 110% of the fired employee's salary to fix the cheap H1B programmer's code = 60% loss.
No. If they DO have to hire a local person ( non-H1-b), they are able to get them at 90% of what they originally paid him.
See, the offshoring and H1-B has been putting DOWNWARD pressure on salaries.
Salaries here where I live haven't moved in 15 years - and that's not including inflation.
Sorry, but there is no real downside for a company to hire offshore or H1-B labor - only an upside.
This is a very current problem. The tech press is talking about IBM's announcements/rumors about yet another huge restructuring. Not so long ago, IBM was one of the most stable places in the world to be employed at outside of government and academia. There was an implicit contract that employees who contributed and worked within the framework of the company would be taken care of for an entire career. I think that needs to come back for those who desire it, not necessarily for socioeconomic reasons, but for workforce improvement reasons. This move to contractors and outsourcing for everything is just idiotic MBA management consultants looking at a spreadsheet and seeing a way to shift costs. The long term problem is that loyalty works both ways, and employees who are treated as disposable will treat their employers the same way.
I know that large organizations generate forests of dead wood as well, and that there comes a time when some of it needs to be cleaned. However, an enlightened company in my mind would be better served retraining that dead wood worker for something else. You get someone who knows the organization's culture and politics, and the institutional knowledge of how their previous job was done doesn't walk out the door.
I know I'm not in the majority on /., but I would love the ability to stay with the same employer for an extended time, without the worry of suddenly losing my job and immediately being branded with The Scarlet Letter U (unemployed) that prevents me from being hired ever again. I actively seek out employers who treat their employees well in exchange for long service -- and they're harder and harder to find. The reality is that the industry is rough - the 25 year old single coder/systems guy is preferred over the experienced person who's done the latest rehashed tech fad over and over again. Anyone with a family would be pretty foolish to go the contractor route - it's hard to explain to the family that you can't pay the bills this month because a customer didn't pay you or there's no work to be had. There's a difference between someone like me, who would put in extra effort in exchange for more security, and someone who just wants job security because they're lazy. I've worked with plenty of those types over my career as well -- they set themselves up as the single point of failure in a system or hold all the knowledge on a particular process just because they're scared someone will come and lay them off. You would get less of this if large companies didn't routinely say "we're cutting 30,000 workers" the way HP just did.
The problem for me with contracting isn't the constant learning - I like that. It's the bouncing around, never knowing where you'll be in 6 months, and never getting to finish anything you start.
In a perfect world, my solution would be twofold:
- Admit that there is going to be huge structural unemployment in the future, and enact European style unemployment insurance and worker protections.
- Take the design/engineering aspects of IT or SW development, draw a clear line between the engineering and the tech tasks, and merge it into the licensed professional engineer track. A professional organization would get a lot more support than the unions that techies irrationally fear. In addition, having a clear career ladder starting out as an entry level tech, spending the time necessary to make mistakes, then graduating to a status that requires you to be responsible for what you build/design is a good thing.
This sounds a little insensitive, but, don't be disposable. You're a Windows admin. Great. So are a million other people. If you're a Windows admin who also knows some programming, there are maybe 250,000 people with your skill set. If you add in that you know some Linux, maybe 100,000 people.
What I'm saying is, if you want to be safer than the average employee, don't be average. Enhance your skill set.
...but it's being eaten...by some...Linux or something...
In other developed countries (France, Germany, Japan, etc) there are a lot more hoops to jump through to lay someone off, and the layoff packages are legally set to be much greater. After that the safety net is much stronger while you look for more work. On the upswings companies hire less than a company in the US might, but layoffs are pretty small for even pretty big downturns. It ends up much better for the workers, though it can tie the hands of the companies when they are competing against the rapacious capitalists in the US or China.
I see such protections as an alternative to a union for workers who are very specialized.
Instead most workers are "At Will" employees. You can quit anytime, and can be cut loose at any time. Most full-time employees don't realize that they have less actual job security than the contractors they might be working with.
> Agreed. I have been laid just once
That's about par for the course for Slashdot nerds. :)
This is an INDUSTRY problem, not particularly an employer problem, though they certainly do a lot to fan the flame. A union won't solve all the problems and will make some of them much worse.
Employers:
- Do not hire a person until existing employees are nearly 100% overbooked. No training or ramp-up time in the schedule.
- Want to hire the cheapest person who can barely get the job done
- Do not want to spend money on training or other activities that might increase employee value on the market (even though, in my opinion, that shoudln't be true)
- Do not significantly value sub E-level employees as investments, but rather fungible commodities to broker
- Vastly prefer to lay off people in position who have become expensive and hire H1Bs to replace them to cut payroll costs, essentially creating a glut of people with the same skillset.
Employees, particularly in Tech:
- Want to hire a drop in replacement. Look for someone with many years of experience doing exactly the job being hired for (i.e. create a niche/no-train, no hope environemtn)
- Tend to focus on job skills over job experience. Skills can be taught to any college hire, and ARE taught in low-cost regions, but tend not to be taught in western schools. Think languages (C), tools, mechanics. Things if you have the proper background and education you can pick up in a month or two. For any non-trivial job however, this is nearly worthless.
- Misapprehend "experience". Experience is not, or should not entirely be how long you've done a particular task. Most tasks can be mastered in well under 5 years. Experience is how many problems you've worked on and solved in your life. It's one thing to learn a solution (i.e. school), it's another thing to learn a problem. The more you've seen and internalized, the better you will be. Instead we interview for how well so-and-so knows how to write python, or how long as he been a python-engineer. Useless. I want to hear what projects he worked on, what solutions he considered and rejected, etc. I don't care what language he did them in, or if he was a cardboard-box folder for 5 years and has the audacity to apply to a plastic tub sealer position without any industry experience!
- In some fields, mine in particular, I have noticed people intentionally block candidates because they are not "in", simply because they are not already "in".
So in essence we are all responsible for creating this market we're in.
1. Have/Learn marketable skills.
2. Have plenty of money in the bank and as little debt as possible.
3. Have a source of passive income to help with cashflow during times of unemployment (Rents, royalties, etc.).
4. Have as few kids as possible.
5. Be picky on what jobs you accept. Use 1-3 to exit the labor force for as long as necessary to retrain and regroup.
6. Be active politically: e.g. Lobby congress for tighter H-1B restrictions, better labor laws, inclusive capitalism.
7. Live below your means. Try to do as much as possible yourself without hiring contractors, mechanics, gardeners, etc.
Well, as this story suggests, the company already views you as interchangeable cogs, so you might as well go with the flow.
You can still collectively bargain for minimum standards. The engineers should go on strike when they take away the secretaries' health insurance. The secretaries should go on strike when they try to replace the engineers with H1Bs.
The "ruthless meritocracy" bullshit is exactly what your corporate masters want you to believe. That it's all dog-eat-dog, but you could be the top dog! And your coworkers? Psssh those losers are just dragging you down! Best not cooperate with them, or they might get some of the scraps we might toss your way instead!
And really it's the prisoner's dilemma. If the workers work together, everybody can be better off! But if everybody's just thinking of themselves as rugged individualists, well...divide and conquer.
I'm glad I work for a non-profit. It's like being an employee-owner. Everybody works well together, everybody gets taken care of, the janitors have health insurance and retirement plans and we've got a lot of people who've been working here 15, 20, and 30 years.
We don't have a state-run media we have a media-run state.
LMAO, out they come at the whistle of the word. Unions are alive and well today. There is no premise that people can be swapped out, but that collective bargaining means that we all stand together and no-one can get trodden on. A union is the only way that workers can "simply prevent large corporations from getting away with their bullshit". They got working hours and conditions under control in the 19th century, wages and equality under control in the 20th, and may finally get randomly firing people/hiring H1Bs under control in the 20th. Look at Germany - unions working with companies to produce huge profits, high employment and decent working conditions. At the moment all you're doing is enabling divide and rule from the top down.
Only 22 years ago
Link
Welcome to the Panopticon. Used to be a prison, now it's your home.
Maybe a solution is to move away from the job culture and into service/contract culture. Employment meant something when it was meant to be long term, when companies were stable. Tech world especially moves too quickly. Unless someone really likes the company, wants to be a part of it anyway and accepts that he or she may need to leave when the company's needs change, why be an employee at all? Why go through the pretense of loyalty and security when it doesn't exist? Simply work per project or as a contractor as long as the services are needed, then be quick and nimble and find other clients when the situation changes. Not much different than a taxi driver perhaps. All the while be your own boss and keep your dignity, even if you make a little less (or more, if you are lucky and willing) and accept the short term uncertainty. (Something we evolved to deal with anyway.) Arguably long term uncertainty is worse when you are employed.
Same here - Fiserv for starters. They have a layoff every two years at some random month early in the year (it's been derisively termed the "layoff lottery").
The only clue we got was the Friday before, they told all the remote/home workers that from now on, all work will be done in-office, starting Monday (this ensures that you bring all your stuff in so they don't have to worry about recovering it.) Come Monday morning, they began discreetly walking up to desks, quietly asking the victim to come have a chat with them in the office. If you're low-man on the seniority totem pole (as I was at the time, since the department was small and had low turnover), you were guaranteed to be unemployed before lunch that day.
Funny thing is, not six months later they were hiring for the same damned positions that they laid a number of us off from. Word quickly got out in our local tech community though, so recruiters were met with a wall of silence when that company's name was mentioned.
Fortunately for Fiserv, the company is able to get around that by instead bolstering their offices in Norcross (near ATL) and Dallas (larger cities with larger tech communities).
Unfortunately for them, websites like glassdoor.com exist, and anyone with half a brain stops there first before interviewing (unless desperation or similar circumstances dictate otherwise).
My counter-view (sitting, between product and customer).
Product have made something that's not quite right. We ask them to fix it. They don't want to, as they're adding the latest shiny new feature instead.
This makes sense to them, shiney got given budget, fixing something would mean them admitting they screwed up before and there'll be a teensy bit less shiny/budget. They don't like doing that.
So, I have to fix it. I can't charge the customer more, I can't internally pay product less, so I just got myself some additional work.
I can then repeat this process for each customer - or hope that product pick up the fix/feature and integrate it.
This second favoured option whilst easiest for me, sticks in the craw a bit as it's not really motivating product to actually make what we need - throw something out the door, and it'll get fixed if we missed anything important.
Now, obviously you get to point when you lose your rag a bit - and tell the customer it's all borked, tell them to escalate it, and sit back as product fixes product. This can only be used rarely, too often and the customer twigs it's all messed up internally.
A better alternative, and something we seem to be moving towards, is to slice the company the other way - Take chunks of sales, site, delivery, support, product to create a 'functional slice' through all of them. Common purpose, common(ish) pot of money - "We" have a problem, "We" need to fix, or our whole slice is screwed (and the multi-VP shit will rain down equally on all of us).
Above still isn't perfect (more services, than product) but even as a small step, if you get product closer to the customer it improves. Not just people feel more involved in actually providing a solution, but helps shape the product roadmap - These aren't just new "Shiny Features" - They're "A Shiny feature we know if we add to the product, has landed us all another million dollars in the next release".
I guess if I had to sum it up, it's just being more open and then trying to align all the interests. People want to do a good job, but asking them to sacrifice themselves to do something they'll never be rewarded for just demeans and pisses them off, which leads to resentment, which leads to the internal barriers, fiefdoms and all the rest.
I don't know about Japan, but these workers rights in France and Germany were largely the work of unions.
That's an incredibly selfish attitude that puts the individual interest above the interest of the collective. The irony is that collective bargaining is much more effective and is much stronger in the long run. Your self interest is great until such time that you reach a point when other, more skilled people take your place (which is inevitable, because our cognitive capabilities decline with age, not to mention that older people have more responsibilities and find it hard to work 80 hour weeks).
Even the most meritocratic of individuals can run into unforeseen and unfortunate circumstances (e.g., an accident that has you laid up, or family issues). I worked in a strictly up or out management consulting firm, and about a year ago, my pregnant wife had some issues. My son was born, prematurely, and I was in a rough place with my personal needs and professional responsibilities. My wife was hospitalized and my son was in the NICU, unable to breathe, and I was the only one who could take care of things. My employer was understanding -- for about 6 weeks -- after which things got rather unpleasant. So, I quit and joined another firm that is not only more prestigious but was also more understanding and accommodating of my needs. But I was fortunate -- I could very well have been unable to find a job, and been unemployed for a year because I wanted to take care of my family.
Union agreements ensure that in such cases, collective bargaining agreements protect everyone.
Not really. Most of what goes on in IT today is quite commoditized, and there are very few areas that are truly specialized. And it is only going to get worse as IT matures. You may think your task is highly specialized, but the truth is, there's probably someone in another part of the world willing to do it for a tenth of what you get paid. That is not specialization.
If you want real specialization, you perhaps see it in chip design, algorithmic optimization, biotech etc. You know, all those guys with PhDs who specialize in a subject?
And how do you propose we do that? The share market is the ultimate arbiter, and the people who are rewarding the companies and the executives are the shareholders who are in for short term profit (it's the extension of the same short term myopic outlook of looking out for oneself rather than the collective).
I find that most Americans have a poor understanding of unions almost entirely rooted in propaganda, and it gets repeated again and again as gospel. The truth is, unions are immensely helpful to the labor force, especially in a service economy such as ours. Everyone thinks their skill is specialized, until it gets outsourced and commoditized.
You are not special. And despite what you may think, unions can help you negotiate agreements that would be impossible for you to go at alone.
No, it's based on the true belief that only success produces the rewards to pay you with. If you want to paid for trying but not succeeding, you have to take the pay out of the rewards gained by the people who actually succeeded.
The world doesn't pay off on a "good try." That's not to say that a helping hand is wrong, but you should be aware that ultimately it all comes from somebody who tried and succeeded.