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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.
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.
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.
Not always... really depends on the quality of management. Expensive people aren't always the best people to lay off anyway since they tend to have significantly higher layoff costs. (severance, etc).
The last company I worked for had some real financial issues (highly profitable company in-general but suffering from a crushing debt load killing all of those profits) we ended up going through 2 rounds of layoffs. The first, dictated by the board but implemented locally, was stellar. It's amazing how much better a company can perform when you can shed a bunch of people who were holding you back. You feel the bite a little bit because a person who was only operating at 20% was still doing 20% work that has to be made up somewhere but you also get rid of some costly bottlenecks leaving you with clearer holes to fill for partial re-hire.
Round 2 was terrible: This one was mandated by a gov't takeover so not only were the numbers MUCH higher but they were based on nationality / new background checks instead of manager input / performance. Honestly the capability of the company was severely neutered.
Honestly a layoff of the first variety every 5-10 years is good for culling the chaff. Unfortunately most larger companies seem to operate more like the second variety when they shed numbers to make the shareholders happy.
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.
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.
Only 22 years ago
Link
Welcome to the Panopticon. Used to be a prison, now it's your home.
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).
Dear Dimit:
Thank you for taking the time to apply to our job. Unfortunately we are not able to extend an offer of employment to you as we feel you are overqualified for this position. Thank you for your interest.
Sincerely,
HR
If I have been able to see further than others, it is because I bought a pair of binoculars.
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.