Being laid off can be a traumatic event. The loss of a job and concerns about financial insecurity cause stress and anxiety for affected workers and their families. To compound the problem of people between jobs, before the layoff announcements, companies like Meta, Salesforce, Amazon, Google, and other big names discussed or encouraged dropping low-performing employees.
Being seen as underperforming – a derogatory term that has connotations of not meeting expectations and being seen as part of the lower end of the workforce – is a red flag that you might be selected for the next round of downsizing. People labeled as low performers are put through performance improvement plans, which are seen as the gateway to leaving the company. Others are subject to the highly controversial battery grading process. If they are measured as performing worse than their cohorts, they will likely be pushed out.
The bias against people who have lost their jobs
Unfortunately, some human resources professionals, recruiters, hiring managers, and interviewers still have biases and preconceptions about people being laid off. They argue that the person may have done something wrong, lacked the ability to achieve the required results, or performed poorly. More than ten years later, as an executive recruiter, I vividly remember several hiring managers chastising me about a candidate submission, saying, “There must be something wrong. with the person because she was the one chosen to be fired.” They demanded, “I don’t want to hire the person who lost his job; I want the person who has a job!
Layoffs, hiring freezes and intense competition for jobs
The big problem is that the relentless layoffs and slowdown in white-collar hiring, along with the stigma attached to so-called “poor performance,” will make it noticeably more difficult for this target group to find new employment.
According to Layoffs.fyi, about 340 tech companies laid off 101,807 workers in 2023. That doesn’t include the thousands cut off the payroll in industries ranging from media to automakers. Layoffs at Meta, Amazon, Microsoft, Google, Salesforce and other tech companies grabbed headlines. Over the past decade, these organizations seemed unstoppable and immune to the vicissitudes of the market.
White-collar and college-educated office workers are facing a white-collar recession. Amy Legate-Wolfe wrote in Yahoo finance that economists worry that technology, Wall Street and other sectors have been and will continue to be hit by job losses. She argues that the ‘laptop class’ or remote workers who have benefited from the pandemic are now at risk due to fears of a recession and a new era of companies leaning on fiscal austerity to appease their shareholders and investors.
In addition to layoffs, companies typically don’t make public announcements, instead stealthily enacting hiring freezes, delaying hiring, or hiring new people. Workforce reductions and pauses in hiring are creating tensions in the labor market.
Over 100,000 white-collar workers losing their jobs send shivers down the spine of workers who survived the cuts. Those who have lost their jobs may face financial hardship, especially with record inflation, high interest rates and rising prices for everything from gas to food. There’s another less-publicized question: how will laid-off professionals be perceived in a job market saturated with candidates and companies delaying hiring because they’re laying people off?
The ‘low-performer’ label stigmatizes workers
Salesforce CEO Marc Benioff asked on the company’s Slack channel if employees hired during the Covid-19 pandemic were working hard enough. The CEO wanted to know why the productivity of newly hired young telecommuters was lower. He then cut 10% of the workforce. Business Intern reported that managers were called upon to rank employees and identify the bottom 10%.
Given that the layoffs were highly publicized, it is reasonable to conclude that getting a new job might be more difficult for many former young Salesforce employees, as this group was portrayed as not being producers of foreground. Unfortunately, other companies have done the same. These laid-off workers will enter the workforce with scarlet letters on their chests.
Tech-adjacent real estate brokerage Compass reportedly targets company’s ‘worst-performing’ employees for layoffs. THE Los Angeles Times reported, “For years, white-collar employees at Amazon.com Inc. have accused the company of using opaque ‘rank-and-yank’ performance reviews to periodically eliminate its workforce.” The tiered worker policy is hotly debated in the tech industry and strongly denied by corporate executives. Despite the issue, Amazon reportedly pressured managers to identify underperforming workers before laying off 18,000 office workers.
In a town hall meeting, Meta CEO Mark Zuckerberg warned employees about the tough economic environment and the need to slow down hiring and cut costs. As part of the new fiscally responsible plans, the social media giant will raise expectations of its employees and offered a veiled threat: “I think some of you might decide this place is not for you and that self-selection is okay with me. In reality, there’s probably a bunch of people in the company who shouldn’t be here.
According to Information, Meta’s vice president of remote presence, Maher Saba, told managers to identify people on their team who “need support” and “move to take out ‘bad performers’ who are unable to to get on the right track”. THE Washington Post reported that tech white-collar workers fear being placed on performance improvement plans, which will ultimately result in layoffs.
Google CEO Sundar Pichai, anticipating his company’s challenges, told his team members at a town hall meeting in July that they needed to increase their productivity. He informed them that the good days of plenty were over. The tech giant and its peers now find themselves in a harsh new environment that will force the industry to aggressively cut costs and find ways to work more efficiently with fewer workers.
Before Alphabet, Google’s parent company, made the layoffs, it reportedly launched a ranking system and performance improvement plan – Googler Reviews and Development (GRAD) – which was believed to have laid off 10,000 employees. There was a general concern that if employees were seen as underperforming, they might be fired. There were additional concerns that this new performance system could use ratings to avoid paying bonuses and stock awards.
Google officials were asked to categorize 6% of employees (representing 10,000 people) as low performers, up from the traditional 2%, according to the Information. In a previous announcement, supervisors were asked to reduce inflated ratings.
Chris Pappas, a Google spokesperson, said in an email that the program was set up to “assist in the development, coaching, learning and career progression of employees throughout the year”. Pappas added, “The news system helps set clear expectations and provide employees with regular feedback on their performance.