Normalising Layoffs/Firing
We have normalised firing of people. I don't know about the "developed" countries where people have social security, but for countries like India where there is no social security and stigma is associated with being laid off, it is a very difficult situation.
I remember asking few years ago to my sister's husband, who runs our family business, what keeps him awake at night with regards to business. His answer, "Not messing up". I was expecting something like "Funding", "Losing sales" etc. But hearing his answer surprised me. Because it sounded personal. So I asked him what does he mean? And he said, "The company has about 100 employees, but I am not just responsible for 100 employees. I am responsible for about 400 to 600 people. Each employee has a family. They make their future plans because they have an income from this company. They have to fund their kids education, they have to look after their aging parents, they might have taken a loan for daughter's marriage or for a house. They are relying on me. If I mess up, I affect lives of 400 to 600 people. That keeps me awake."
Some how firing/laying-off has been trivialised.
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[ 3.0 ms ] story [ 231 ms ] threadMy impression is that nobody treats these layoffs as trivial. Recessions, downturns and the resulting employment uncertainty are cause for anxiety everywhere.
Society as a whole, but more specifically the businesses that do mass layoffs.
We spent decades in the US smashing unions, smashing pensions (replacing them with more volatile instruments like 401Ks) and made at-will employment dangerous for both sides of the equation.
Firing has been trivialized for decades. This is not new, and the current wave is minuscule compared to 2008, 2000, and previous. The worst is yet to come.
https://nymag.com/intelligencer/2022/10/republican-plan-cut-...
A 401(k) usually allows me to choose what I invest my money in (including bonds), and can be rolled over to a new employer easily. And it’s my money once it’s in my account, not my employer’s money. They can’t require me to work for a certain period of time to get it out, and don’t pay me less to compensate for offering the retirement benefit.
But I agree they pretty much only have upsides - no risk of the pension fund going bankrupt (would be good right about now in the UK!) and no way for previous generations to steal from the current one, which is basically what all defined benefit pensions are doing now.
To think of that as "stealing" seems pretty individualistic and short-sighted to me. What benefits would the current generation have to give future generations a future if everything that matters is how much you save and do in the now? This line of thinking leads to financial decisions that value the present much more than they do the future and it's in big part a reason why we are in deep waters when it comes to climate change.
Of course, I agree that it is important to reward people personally as well. But I think it's much more important that we are building sustainable societies capable of taking care of people all through out their life cycles and that improvements on productivity impact us all because, after all, we all live together. But I guess that's just my personal vision of what a good society should be; for others, as you say, they would rather live in a dog-eat-dog world because they know they would be top dogs.
The unfairness comes from the current generation not being afforded the same privilege as the last, now that existing defined benefit schemes are largely closed to new members, and extinct in the private sector. These schemes are typically underfunded and stink of Ponzi.
Meanwhile, the current context in the UK is that the Bank of England has just had to bail out defined benefit pension managers who had overleveraged their assets... no doubt at the taxpayers expense.
It's not really surprising to see people clammer for "fuck you, got mine" when half a generation literally believe they will never own a home and never be able to retire.
Updated my original post to make it a little clearer.
An American 401k is a more like what we'd call a "workplace pension" here in the UK, which nowadays is always a defined contribution scheme from a third party provider selected by your employer. These vary in fees, fund selection etc, but you usually get additional contributions from your employer, as well as better tax relief, for using it vs a SIPP.
Most employers won't pay monthly contributions from salary in to a SIPP due to the increased payroll and and admin costs, although some will do so for annual bonuses.
Confusingly there's also something that people call a "full SIPP", which is a much more expensive but less-retaily SIPP that can be used to invest in things like leveraged commercial property.
If REITS are what you're referring to then I'm fairly certain a full SIPP is more analogous to a 401k. You can open a 401k today, on your own, without a business. They're just optimized for pre-tax so it makes sense that they're tied to work. Employer matching varies wildly. There is no predefined contribution that can be made by vendors, I believe the 401k limits are all federally mandated, but that mostly has to do with tax optimization.
I’m not super well informed on what his options were; I’m sure he had different retirement benefits via staying with GE post-merger, but if anyone is interested I could get more details.
EDIT: Based on memory and what kind of work he did, I’m almost certain it was this item in the “General Electric timeline” Wikipedia page: “GE Aerospace Division sold to Martin Marietta, now Lockheed Martin”
They might not, but that position presumes that the person has only experienced the 'upside' of the industry. Why would ANY employee in ANY industry prefer it in boom times? They wouldn't. But that in and of itself is very short-term opportunistic thinking. It may still not overall be the position one wants to take, but that also presumes that there is only a binary decision to be assessed, and policy/regulation is rarely lacking in granularity.
Pensions carry their own benefits and detriments. As someone whose been in tech for 25 years, I'm largely ambivalent at this stage, but I suspect many aren't, and are asking more pointed questions to themselves.
It's not for nothing they killed em in favor of 401ks, themselves whittled down over the years (employer contributions going down, kicking in after a time, only getting paid at the end of year, etc).
You might be too young to remember the facts on the ground, leaving the conversation to start with, "Why would an employee in the tech sector..."
An ngram for that phrase itself shows a sharp initial onset in the 1910s:
<https://books.google.com/ngrams/graph?content=hiring+and+fir...>
My understanding is that this was strongly tied to mass production (Fordism, after Henry Ford), which wasn't just factories but also in significant manner railroads (more below), construction projects (structures, civil engineering projects, shipbuilding), and with time, office work.
The contrast was with prior regimes of serf or feudal labour, as well as independent farmers, small crafts, artisans, shopkeepers, and professionals, many of whom were in large part independent and often family-oriented businesses. Much of that is now highly consolidated, wage-based employment.
In the UK it's your mortgage that's the big worry - houses so expensive that you will pay them off for the rest of your life. What happens if you get fired and cannot pay the mortgage?
This is actually similar to a lot of tech layoffs, where the company is laying off a large number of people to downsize the company and not rehiring other people into those roles.
Where employment protection and unions come in is areas like redundancy pay offs, including potentially retraining; and ensuring that redundancy is not used to target individuals (e.g. making a role redundant to lay someone off and then recreating that role to hire somebody else). If you want to fire somebody there needs to be good cause. Otherwise you "manage them out of the business" by making them unhappy whilst not performing constructive dismissal.
This was all a lot of hassle when I was running teams but on the upside, as a manager I was also just an employee and protected by the same laws.
IMO this creates bad dynamics and makes people dependant on companies. If switching company would be easier, workers could demand higher wages etc.
Get hikes and save up during good times, skill dev/change course during the recessions.
But tbh it’d be better if things didn’t swing so much.
> Normalising Layoffs/Firing
is how you fix this:
> stigma is associated with being laid off
In Europe where firing is almost impossible, hiring is a very tedious process. Companies are big and look financially stable because the little ones cannot survive or dont enjoy the same monopoly / legal protections.
If a company is not useful to society, it should go down. If you're not a good fit with the company, you should find your own way or a better company.
Don't idealize employment and companies. They are only tools on our path to wealth and freedom
Case study. In my country, most individuals do benefit from a severance on a permanent contract. Getting a permanent contract happens after working for a year if you're lucky or in a high demand job. In other cases, companies will use their power to stall as long as possible where beneficial. Temporary contracts do not have the same severance benefits, just wait the year and they are gone.
Severance itself varies case by case. Younger people with permanent contracts aren't getting multiple years in salaries for getting fired. Most older employees don't, either.
The entire premise also requires a largely immobile workforce. Workforce mobility in The Netherlands is actually pretty decent, with most younger people switching jobs every few years. This inevitably means these people have temporary contracts for a large part of their career, with much weaker severance packages. Top comment also discounts the obvious, trying to get individuals to quit themselves through e.g. legal bullying or bad benefits.
For the majority of countries, your entire point rests on the premise individuals are choosing to largely be immobile. Tenure length isn't that different from the US, all things concerned. Significant, especially given some countries, but not nearly as dramatic as "impossible to fire".
The moment you introduce mobility, most of the safety is gone for a large portion of time. What we are seeing, is that younger people are hit disproportionately since job hopping tends to be the far better choice, and younger people do not start at incomes that get them comfortable. It is primarily the elderly that benefit from the current structure.
Permanent contract means the employer does not have the exit condition of "wait it out" to get rid of an employee. Additionally, permanent contracts tend to have bigger benefits attached to them, both legally and infrastructurally (e.g. getting a mortgage on a fixed term contract is nigh on impossible for most individuals).
Legally, employers can only offer so many fixed term contracts before they are forced to hire permanently or cut off the employee. In practice, you will see more exploitative companies look for ways to extend this (alternative legal structures), whereas fields with more balance in power (like IT) tend to present permanent contracts after a single temporary contract.
First of all, you have a trial period of 3 to 6 months where you can fire someone without even giving a reason.
Second of all, you can have fixed-term contracts, like 1 or 2 years - also with the trial period.
Third, you can still fire people after the trial period, you just can't go Trump-yelling at someone "YOU'RE FIRED!!!" because of some small mistake or if you don't like their face. It's not an easy process, but also not impossible. I very much prefer it this way.
I'm seeing this at the company where a friend works. They have an american branch that completely changed the employee roster twice (!!!) in the last two years. Everything they do is a mess, every new person that comes brings a different point of view of how things should be done. In the end, they always end up falling back to implementing what their colleagues in Europe did. The europeans have been working together for 6 years now
PS: for my current job, where I have a permanent contract, the interview in-all took 55 minutes. About another 15 minutes of talking to HR on the phone and bam, here I am.
In Germany very small companies can fire people at will. It's effortless and requires minimal bureaucracy. Same for firing people in their long trial periods.
In other cases, the difficulty depends heavily on the situation. The easiest way is to simply negotiate with the employee. The other options involve more work
And if you can find a job easily, you can credibly threaten to decamp for leverage. (Or, if your boss is a dick, just leave.)
I'm American. My bias shows. But I think an easy-to-fire, easy-to-hire model is far superior to the incumbency-biased systems which make hiring and firing an Olympic sport. We lack a strong-enough social net underneath it all, necessary to be humane and maintain social stability. But that seems an easier fix than reforming an entire commercial culture.
Does it? To an outsider, workers rights seem to be regressing.
How exactly is hiring a very tedious process? Seemed quite fast and easy to me.
And btw, it's not that hard to fire a wrong hire. You have few months to do so basically for any reason at all, and afterwards, you can still do it, if you have a good reason to do so.
GP made a huge generalization by saying "in europe" while talking about labour laws. It's like me saying "in asia, (something about the labour market)", there is no such thing.
Hiring/firing/Employee-rights are very different between Spain and Czechia.
No, Europe is 44 countries the subset of Europe that is EU have 27 members
Russia is about 40% of the continent but few people want to go there, especially under current circumstances, and the remaining 16 countries are either EU associated (Switzerland & co), former members (UK), EU candidate countries, or countries frankly too small and/or poor and/or remote.
The EU is the elephant in the room.
Here i am waiting for more than 2 months for a legal contract because my employer is in a different country and does not have a legal entity in my country.
EU to a large extent is a failure to nurture talent and multiply capital.
That's a pretty wild comparison?
> What if I moved out of the country? This seems bizarre to me as an American. I’d do as little work as possible for that time and be resentful about it.
Well, things are usually a little more relaxed during that period. The employer is also required to make accommodations for you to find a new job, e.g. allow time off to go to interviews. As for leaving the country or not showing up, sure, the company might have grounds to sue and they could certainly stop paying you in that case, but, y'know, generally people act like adults.
There are exceptions to this rule about notices, so a day-to-day firing is possible in extreme circumstances. Like if you're not showing up at all, or blatantly not doing your job, are violent etc., you can be banished from the workplace and not paid from that day. But the point is, if you've been doing your job and get fired, you have the option to be at least somewhat reasonable about it and in return you get three months to find your feet and move on. By far most people take this.
Also, in the converse situation, where it's you who wish to leave, the rule is that you give at least one month's notice. This is sometimes not what you want, of course, but I think most people view it as a fair and reasonable trade, especially in light of the rules about getting fired.
It always possible to get rid of either an employee or a role. The problem comes when you're getting rid of a whole department or say 10% of your employees. There are a lot more rules around that.
finding a new job you will compete with people that have this 3 month notice so most of the companies plan hiring around it. also if you are unemployed in europe it will look really bad during your interviews.
now compare that to USA. you give 2 week notice, job market is very fluid so you can likely find a new job 2 week after stay there a few months helping the company and then use that time to apply to a new job in a better company.
Obviously the french model might be better for low earners/blue collars that do not have a job security. but for everyone else it is really hard to move to another company, managers know that too so they dont need to carrot you into a raise or a promotion as much as they do in US.
You're also missing that nobody is forcing you to quit to start looking for a new job, the protection is mostly that if the company wants to get rid of you they need to give you at least the same length of notice, giving you extra time on top of the unemployment to find something.
Furthermore, in the US model, if you quit you don't get unemployment.
Oh, and there's also RSA if you don't have revenues, which can provide some income when unemployment stops.
In New Zealand it is fairly easy to start a company (in the sense that the required paperwork isn’t too difficult). It’s easy to hire people, but firing is hard.
Why would ease firing mean ease hiring? Why would companies failing easily mean start ups are simple?
It’s not so much that companies need to be idealised, but that people need to be treated with a minimum level of care.
but also, there is a limited amount of capital in the economy, and so propping an "unhealthy" company up with debt will crowd out new, potentially successful businesses. If there are enough zombie companies around this is enough to paralyze an entire economy.
The general observation is that the US has less worker stability, but also bounces back faster than European countries. And the poster child for zombie companies strangling the economy by hoovering up all the credit is post-bubble Japan.
That's super bad for morale and companies generally don't do it unless high churn is normal (retail).
US companies have hiring processes which are HARDER to go through, not easier, on average, than European companies. For example background checks almost never happen, as well as reference requests.
Also, companies are just more reluctant to open a position.
From the moment the decision was made (an hour or so after the coffee), it is usually a month until they are working with me.
We do reference checks after picking a candidate.
The month delay is due to the notice period people are usually required to give their old employer. It could be more or less but is 4 weeks usually.
The process probably varies by industry a lot. If a profession requires a practicing certification you have a minimum standard already. If a profession is tiny, you have a fair idea about candidates before you interview.
People do not need to be treated, they're not little babies
Companies failing is fine in my view, as long as people are protected. Workers need to be paid and they need sufficient notice of redundancy for protection.
Contracts need to be adhered to with enforceable penalties if broken.
Yes, like 1930s America.
I guess you mean “you can be easily hired” rather than “you will find a job easily”. Very different things.
Little bureaucracy/paperwork/barriers to starting work if a company wants to hire you
> "you will find a job easily"
There are actually companies that want to hire you
Assuming you mean the European Union by "Europe", this is 27 countries with 27 labour laws. I don't think this can be generalized. Only trade laws were unified in the EU.
The labour laws diversity is made even wider if you include non EU countries like Switzerland or the Balkans.
Just as an example Denmark follows the concept of Flexisecurity[1], easy to fire, but there is a good government safety net which prevents people from falling into poverty, while trying as hard as possible to find them a new income.
[1] https://en.wikipedia.org/wiki/Flexicurity
Good for Denmark ! Generalizations are never true. Specialized descriptions with all the cases covered on the other hand, are never read.
The wording of this struck me; is it better to lie than to go unheard?
Europe is not a single country, anyway, here's what happen in France:
Firing is tedious, but not impossible. Hiring people is easy, but you enter into competition with higher salaries - like the US - for remote jobs.
> Firing easily and hiring easily are two sides of the same coin.
Not exactly, they diverge when firing is made more difficult.
To fire in France you need a really good reason well justified, and prepare your company for the Prud'hommes trial. Of course you could say "but most companies are big and have HR teams and lawyers dedicated to this, whereas the employee is all alone", but that's also my point about big vs. small companies and legal protections
or, depending on the law, you make mechanically easier to form new companies or create more contracting jobs etc
What you're missing is that in most European countries where firing is hard, it's only for medium to large companies
That operates under the idea that employees only change when fired. And that's patently not true.
Tell me you’re an American without telling me you’re an American ;)
Maybe the employee got in in the first place because hiring and firing were easy. If you made it difficult, the employee wouldn't have been hired in the first place. Then it doesn't matter if you have an economic crisis, the person is out of job anyway. We need to let companies fire employees to survive the crisis, and let newly fired people re organize their life and create the companies that will compete and destroy the current ones
There was an interesting talk on this topic [1]. What they argue is that the statistics used in the US to measure income inequality are misleading as they don’t account for taxes and benefits. The gap is greatly reduced if you do.
In any case, poverty is usually the issue, not inequality.
[1] https://www.youtube.com/watch?v=XL1DSo_gvK4
> If you can be fired easily, you will find a job easily.
Unless it is another economical crisis and nobody is hiring?
> In Europe where firing is almost impossible
It is called "job security" - if you hired somebody, you "promised" them to pay a wage. If they are not needed anymore, you need to keep on promise and pay a wage. For at least some time. E.g. a few month of salary seems reasonable because a person has planned his future with you, now he needs to find a new job which will take some time.
So it is not impossible in Europe. It is expensive at most because it only looks reasonable.
> Companies are big and look financially stable
Unless you count all the mom and pop cafes all over the Mediterranean? All the Scandinavian startups? And etc.?
Of course employment is an exchange of promises between employer and employees to bring stability for less money and less risks. But if the exchange benefits both sides, there is no reason to forbid both parties to negotiate whatever they prefer. In Europe there are too many legal hurdles (called "protection" of course they're going to choose a positive word !)
If there is an economic crisis and you forbid firing, the only solution is to close companies. Societe re organizes itself at each crisis, so the people laid off need to find new ways
Firing isn't entirely forbidden for a start.
Secondly, if companies know that firing has a cost they're more likely to grow their headcount in line with what they're able to support. Making firing cheap only serves to encourage the type of behaviour that leads to instability in an economic crisis.
> Of course employment is an exchange of promises between employer and employees to bring stability for less money and less risks. But if the exchange benefits both sides, there is no reason to forbid both parties to negotiate whatever they prefer. In Europe there are too many legal hurdles (called "protection" of course they're going to choose a positive word !)
The vast majority of employee/employer relationships have a power balance that's vastly in favour of the employer. Even for those of us lucky enough to be in tech, we've seen that employers are more than willing to secretly conspire in order to drive employee wages below what would have been the market rate.
If there is another economic crisis and nobody is hiring, preventing companies to fire people will make the crisis even worse.
> It is called "job security"
An outdated concept of the XX century. No such thing in the post-industrial society.
> Unless you count all the mom and pop cafes all over the Mediterranean?
They are closing by thousands now, like in every other economic crisis. And Scandinavian startups — what Scandinavian startups? (Finland and Estonia are not Scandinavian countries, they have somewhat more business-friendly environment).
I guess that was suggested in the XIX, XVIII, XVII, etc centuries as well. But I quite enjoy my job security in the XXI century.
Companies that know firing is difficult will hire less aggressively. They are also more likely to accept a deeper reduction in profits before laying people off. The result is a higher threshold of economic instability before the company lets people go. The US approach is like playing speed Jenga, you build something that will inevitably collapse.
Mass layoffs only serve to deepen an economic crisis. You remove a huge sum of disposable income from the economy which only contributes to more closures/layoffs. The result is an increased concentration of assets in the hands of those with the most access to capital during the crisis.
European economic model simply cannot compete. US domination in tech is growing each year.
The growth-oriented model that's become popular in the US looks increasingly like a cancer that only serves to concentrate wealth. There were a few early successes but it seems far more common that these startups "succeed" by distorting a functioning market with external capital and destroying sustainable businesses operating in the sector through price dumping.
Once they've captured enough of the market they'll IPO and either collapse entirely when their business model proves to be entirely unsustainable without infinite VC funds or limp along providing inferior service and labour conditions to those available beforehand. Either way harm is caused.
The model is fundamentally incompatible with the concept of fair and healthy competition and ultimately makes success a function of who has the most money to burn.
In the same vein it isn't communist to suggest that billionaires should maybe remain slightly smaller billionaires in order to provide workers a decent quality of life.
Until fairly recently you could support a household on one income in most western countries. We're now seeing people struggling on two after decades of tax cuts and historically low tax burdens on the extremely wealthy.
Growth at any cost is utterly toxic in my view.
You describe lower European salaries, yet minimum wage in the US is outrageously low.
What the US seems to have created us a system for creating wealth inequality.
Regulation is a dirty word to many, but it’s a solution I support for minimum wage.
What is the point of a job? To me the point is to look after people (from both the employer and employee’s perspective).
See Alvin Toffler’s “Third Wave” for more detailed treatment.
What's become cheaper in the current economic crisis?
There are by definition, fewer jobs available in total during an economic crisis. More competition for those positions also makes it likely that living standards will decrease.
Good point. In all the others I’ve lived though, something has, but not this time.
Shares have got cheaper and savings are being hit due to inflation being so high. It’s a good time to spend but what do you buy?
I realize I speak from a privileged position as a software developer. But never since the first day that I stepped into an office as a professional software developer in June of 1996 did I “plan a future” with a company.
My plan was always to use where I worked as a stepping stone for my next job. I spent my first two years saving money and building my resume. I have spent most of my career “with my running shoes on”. Meaning I’m always prepared for a layoff or to leave when the pay/bullshit ratio is going in the wrong direction.
My employer owes me nothing besides to pay me for the hours I worked. When that arrangement isn’t working for either of us, we both have agency and the ability to terminate that arrangement.
> Unless it is another economical crisis and nobody is hiring?
I lived through both the 2000 crash and 2008-2011. The 2000 crash wasn’t bad if you had both skills and was working in many major cities in the US as just a regular old enterprise developer working for profitable non tech companies.
2008 was worse. But as a developer, you could find a contract somewhere if you had a network.
You're missing the point. It's that you're planning your future on having income from the company you currently work for. In Europe they can't pull the rug from under you and say "good luck with your mortgage, you're fired today". Instead they have to say "you are fired, but will receive 3 months of pay while you find something else". So yes, I disagree that they don't owe you anything more than pay for the hours worked. You have an ongoing deal, if that is changed you should get ample time to re-adjust.
> In Europe they can't pull the rug from under you and say "good luck with your mortgage, you're fired today".
I’ll take the tradeoff of much lower taxes and much higher pay any day.
> Instead they have to say "you are fired, but will receive 3 months of pay while you find something else"
Alternatively, I can save three to six months living expenses so that I’m not at the mercy of my current employer for my food and shelter.
Taxes are not (only) because of that. In fact, the employer needs to pay those 3 months often.
Schemes someone else pays for sound great, but until people agree to pay them, they don’t happen.
Why would you want to depend on them for your long term financial stability?
I think I’ve been unclear - I believe taxes should pay for healthcare for everyone, and would happily pay more tax for better healthcare.
I’m taking that same opinion to its logical conclusion. We already have employer funded state controlled unemployment insurance. Increase that, have companies pay more if necessary and along with untying health care from your employer, we are there.
Let private companies focus on their business.
If you can acknowledge that you're in a more secure position, why then argue for the treatment of those less fortunate based on the security that's been afforded to you by your particular set of circumstances?
> 2008 was worse. But as a developer, you could find a contract somewhere if you had a network.
The economy consists of more than just developers. Unemployment spiked in 2008 and many people were unable to find work after having been fired.
If society thinks there should be a safety net, and I agree, then society should take responsibility in the form of insuring that safety net is available. I have no problem with company funded, state run unemployment insurance, I think that the idea of your health insurance being tied to your job is asinine, etc.
But at what point is it the individuals responsibility to save money for a rainy day?
But why should it be on the company?
> The economy consists of more than just developers. Unemployment spiked in 2008 and many people were unable to find work after having been fired.
And what were the companies suppose to do (like the one I worked for) that ran out of money? Most people that tying your health insurance to your company is ass backwards. So why tie more of your livelihood to your company?
It depends on what you mean by a rainy day. I don't think I'd judge most people too harshly in our current system. Circumstances can change in ways that an individual probably won't or can't foresee. Housing and other living expenses have grown to the point that a low wage worker can barely support themselves in many cities.
Personally I'd like to reach a point where society provides enough for a comfortable existence e.g. shelter, food, safety, healthcare, and a small disposable income for hobbies/leisure. At that point I think most people would be in a position where walking away from abusive employer is an actual option and not a punishing risk.
> But why should it be on the company?
It wouldn't need to be if social safety nets were strong enough. As it stands, losing your job has a much bigger impact on an employee than the employer.
Even with appropriate safety nets I think a case could still be made for discouraging companies from firing people lightly and requiring the effects to be cushioned due to the amount of upheaval finding a new job can cause both financially and socially.
> And what were the companies suppose to do (like the one I worked for) that ran out of money? Most people that tying your health insurance to your company is ass backwards. So why tie more of your livelihood to your company?
I view it as a failure of our current system that employee obligations aren't first in line when a company has to be liquidated. The employer/employee relationship is nominally one where the employee accepts a reduction in risk in exchange for giving up some of the value of your labour. Bankruptcy law in many places doesn't seem to respect this.
In the US, there is no stigma to losing your job via a reduction in force. As far as financially, I don’t have any moral objection to unemployment insurance being higher if we as a society choose for it to be higher.
> I view it as a failure of our current system that employee obligations aren't first in line when a company has to be liquidated
The VC funded company I worked for literal had no money when it was bought out for pennies. I was one of the people doing pitch decks to potential acquirers and in the room for the technical interviews with them.
Don’t get me wrong, this was 2012 and everyone from developers to tech support found a job quickly and we had plenty of warning.
The eventual acquirer laid almost everyone off immediately with a 1 month severance pay.
Sorry, I could have been more clear here. I meant the loss of social relationships either at the company or by potentially having to move neighbourhood/city.
> The VC funded company I worked for literal had no money when it was bought out for pennies. I was one of the people doing pitch decks to potential acquirers and in the room for the technical interviews with them.
Most companies have at least some assets when they wind down. Putting employee obligations first simply means that any value derived from the liquidation is first used to settle that debt rather than other creditors.
If there were unpaid wages, then at some point the people running that company continued requiring their employees' labour despite knowing they couldn't keep their end of the contract. Some exceptions might be justifiable for smaller companies but I think we're far too lenient on people who knowingly steal from employees.
Most tech workers can deal with unpaid wages but I've seen it happen to bar and restaurant workers that aren't in as secure a position. The owners wind down the company and leave wages unpaid while immediately creating a new one in the same unit.
Are you really going to put the onus on private companies to ensure that no one ever has to move from their hometown?
> Most companies have at least some assets when they wind down. Putting employee obligations first simply means that any value derived from the liquidation is first used to settle that debt rather than other creditors
A software companies only assets are the software and maybe a few laptops. These days many don’t even have servers.
Don’t get me wrong, we were guaranteed by our backers that we would be paid for every hour we worked and they kept their promise.
Not at all. I do think companies should be prevented from firing people without generous severance and/or good reason.
If there was a good social safety net then I'd be open to that being relaxed a bit.
> A software companies only assets are the software and maybe a few laptops. These days many don’t even have servers.
There's also IP but I think that's missing the point. Getting paid something is better than nothing and many companies do have assets that would cover some/all of their outstanding payroll. At the moment, as far as I'm aware, employee payroll is fairly far down the list of creditors. I believe it should be first.
> Don’t get me wrong, we were guaranteed by our backers that we would be paid for every hour we worked and they kept their promise.
I'm glad your backers treated you and your colleagues generously. My preference is usually to bake in desired outcomes like this rather than relying on individual generosity.
It’s not a good reason that “we don’t have the money” or “we decided that our horse and buggy manufacturing division is no longer the direction we are going”?
A company is not a charity. The purpose of a company is to sell things at profit and they hire you with an understanding of exchanging labor for money.
> I'm glad your backers treated you and your colleagues generously. My preference is usually to bake in desired outcomes like this rather than relying on individual generosity.
So are you going to force investors to keep funding companies when they run out of money?
Sure you need to vet your candidates more carefully, because you cannot fire them right away without reason (although these law vary within the 27 nations of the EU). But:
1. there are limited contacts. So if you don't wanna have the risk, you are free to make shorter contacts and pay people more so the good people are willing to take those. This has the downside that they are free to go to your competitor as well at the end of the contract. Everything comes with it's downsides.
2. Hiring random people and firing them a month later does not make it easier for the employers. If employers vet their potential employees more carefully, everybody wins. Sure, finding and selecting the right person is hard. But even if you could hire and fire villy nilly, that would waste your companies time. Every person you hire will take the company into a new direction, one bad person can poison the social climate, hurt your company etc. So hiring carefree is not a good idea in any case.
3. In hiring not just the employer takes a risk, the employee takes risks too. They might have to move, they might have to buy a bicycle, a car, a public transport ticket to commute, they plan their lives on the promised employment and wage. It is only fair that they get the time to reorganise if you let them go.
I don't know where you got this idea, but, at least in tech, the most infamous 7 rounds of whiteboard interviews stories I've heard are from Silicon Valley, not Europe. The company I work for (a Romanian branch of a US company - and yes, Romania has all the same legal protections against t firing as most of Europe) typically does one tech interview and one HR interview and that's it.
Frequently, especially for seniors, it's a technical chat. I have anecdata from about 6 European countries.
Where exactly in Europe?
It's like saying "in Asia is almost impossible to do X"
Europe is a 750 million people continent formed by 51 different countries including Russia and UK
Be more specific please.
In Spain it's easy to fire, for example.
Their average salaries are 20% lower than the French ones, even though in France firing is hard, and their unemployment rate is almost double.
You theory has some flaws apparently.
Yes generalizations are never true. Even talking about one country is a generalization and you will fail at making a statement about it. The best way to not make a mistake is to not say anything
There is no good reason to separate Europe from Asia, it's all one big continent. Your theory is also flawed :(There's no such things as generally "harder to create companies" in Europe.
It's simply harder to create global multi billion conglomerates with an easy trigger for layoffs.
So generally, that's true, there are less multi billion global conglomerates with an easy trigger for layoffs than in the US.
But
USA has 2.2 companies registered per 1,000 people
Most European countries have more than that, Netherlands is at 7.1, UK at 7.4, Bulgaria 6.7, Denmark 5.2 etc.
> There is no good reason to separate Europe from Asia, it's all one big continent
Eurasia is a super continent, Europe is a landmass, which is either considered a continent in its own right or a subcontinent of Eurasia
Thanks for giving me the chance to explain this topic once again.
The massive plumbing companies in the US do not yet exist in my country. I feel this is changing, but fair competition is still enforced at the local level, so i might be wrong.
Nobody really care about little entrepreneurs it seems (especially not those politicians who claims they do), but i have the impression that the weakening of local courts is a prelude to a change towards a more anglo-saxon model. Like i said, i might be pessimistic and hopefully wrong.
that would only ever be true in whichever fantasy world where the managers and people-in-charge made wise and just decisions.
Plenty of 'rare talent' that is near irreplaceable is fired every single day by managers that don't know any better, and their niche talents make it very difficult to find new job prospects.
Typically here you have 3 to 6 months probation period where you can be fired at any moment. Then your rights increase with your tenure.
The other big difference is that when you leave a job, you usually have 1 to 3 months of notice period while in the US that tends to only last a couple of weeks.
Overall this gives people a lot more security and I think we have a much better balance because of it, at least in the tech industry.
Industries with higher turnover (like hospitality) typically only hire employees as contractors so they can fire them at any time.
You have consultation requirements many places, to ensure that it's actually a genuine redundancy, but a company willing to offer a reasonably fair payout and who can demonstrate a genuine need to cut costs or a genuine lack of work for certain staff will generally not have much of a problem carrying out a redundancy most places in Europe.
France has good job security rules, from what I've heard. The UK, not so much.
Once you've completed two years, you are entitled to a consultation process if the company wants to make redundancies. Those positions cannot be filled for six months after a redundancy. HR departments can reword and change descriptions though so if they really wanted to fill the position, they could, but from what I've seen they mostly change it after six months anyway.
If you're unlucky and have just started a position, you can be dropped easily, no consultation, but the rules of redundancy above remain.
However, having spent some time on the other end, doing interviews, hiring is a lot more expensive than firing. One month of consultation vs delays to projects, training of new starters, retention of employees and talent are far more valuable than an easy firing process. Never doubt the value of your experience to a company, any employer who does ignore that value isn't worth working for as they're delusional and likely to fail soon.
Yes, hiring is a very tedious.
> In Europe where firing is almost impossible, hiring is a very tedious process.
This is, at best, an anecdote. I'm charitably saying anecdote to avoid calling it utter bullshit. The average hiring process at companies I'm familiar with -- in the UK, France, Germany, Finland, the Czech Republic, Portugal and Greece, so I guess it's a reasonably large sample -- is no more complicated than the hiring process at Google or Facebook. And, much like in the US, if you stay away from the big players -- like Google or Facebook -- the average hiring "process" is a technical interview + a short interview with the hiring manager and HR. Popular enough companies may do a phone screening but that's about it.
Firing someone for bad performance is not "almost impossible". I have, unfortunately, had to sign off on that a couple of times. What is almost impossible is firing someone for bullshit reasons and writing it off as "a bad fit".
Of course there are legal protection in place: if you are laid off and can't find work -- for example, because you relocated to stay with your current employer when they moved offices, and were promptly laid off afterwards, in a new town with somewhat uncertain prospects -- the solution you're offered, in most countries, is not stop being poor, lol, but various forms of social protection so you don't starve before your next interview. Consequently, yes, it's important to make it difficult to fire people because they don't bend to toxic management or poor working conditions, otherwise that'd just be sponsoring incompetent management.
> Companies are big and look financially stable because the little ones cannot survive or dont enjoy the same monopoly / legal protections.
That is not even an anecdote. Except for Eastern Europe, where the Iron Curtain interrupted the history of most businesses, there are plenty of small companies, in every country, that have been operating more or less without interruption since the 1800s (and usually the interruptions were on account of one of the World Wars). There are four of these within a ten-minute walking distance from where I'm staying.
What happens in a recession? When tens of thousands of people are fired easily across an economy they're not going to find another job quickly.
Making firing more difficult puts a mandate on companies to be a little more responsible when growing their headcount. As a consequence they're less vulnerable to wild swings as a result of unforeseen circumstances.
> Companies are big and look financially stable because the little ones cannot survive or dont enjoy the same monopoly / legal protections.
Big companies are favoured in hundreds of ways. Leveraging other income streams to price dump their way into a dominant position and creative methods of lowering their tax burden being just two. The answer to this isn't to strip worker protections but to remove those loopholes and encourage competition rather than monopolisation.
Many laws around workers rights are already relaxed for smaller companies.
> If a company is not useful to society, it should go down.
Absolutely, but most societies wouldn't be able to function if this was the case. Most economies simply aren't resilient enough to allow large companies to go down. I feel like it's fairly intuitive that once companies in certain sectors grow large enough they can become an essential part of the nation's infrastructure. That only leaves a few options:
- Continue bailing them out
- Nationalise them
- Prevent them from reaching that size in the first place
I don't see how making it easier to lay people off would advance any of these. Instead it only encourages companies to engage in risky behaviour and grow beyond their ability to sustain themselves.
> Don't idealize employment and companies. They are only tools on our path to wealth and freedom
We've created a system predicated on the fact that not everyone can be wealthy. I don't think it's moral to then say that the solution to being treated poorly is to just become wealthy.
If at-will employment wasn’t available, companies would react by only hiring when absolutely necessary, and there would be fewer available jobs.
Plus, even in the US, some companies offer pensions and are known for almost never laying off or firing people. So you do have the choice of stability if you’re willing to limit the companies you work for. Startups and publicly-traded companies are not the place for those who want a guaranteed job.
I'm glad tech companies have very simple interview procedures at the moment.
There is a legal process when you need to reduce staff - the bare minimum offer is one week of pay for each year of service - got laid off after 19 years and company expedited the legal process if I volunteered for layoff by offer an extra half a week.
It allowed me to pay of my house, my car, short term debt and not worry for income for an entire year.
I don't think it has been. I don't think you can generalize the sentiment of people at a company from the HN post about a PR announcement for how they're cutting staff. When a company announces layoffs they're telling the markets, investors, and the public that they need to make a significant change. That doesn't tell you anything about how the founders, board, HR team, or anyone else feel about the layoffs.
FWIW the people I know who work in HR are usually gutted when they have to make jobs redundant. Founders and boards are less so, but usually because they believe it's a choice between jobs cuts and company collapse. Both these things are from very limited exposure to companies making cuts though.
Perhaps there are companies and people out there who think it's trivial. That would be sad.
This is something I heard many times. And the most of the time, companies with this motto are underpaying and don't give a proper wage to employees to make any passive income or any investment to become less depended on the job. And this motto becomes an excuse for overtime and workload in bad times. A professional work should not be responsible/aware of any daughter's wedding or personal loans. Developed countries have massive taxes to support you on unemployment. Risk of layoff must be part of your salary expectation. Young Startups always pay more than stable companies.
Yup. Just like we have trivialized climate change, consumerism, mass wastage :-( Ah, capitalism. The devil is in the details.
Not to sound crass here but it seems like you're fishing for virtue. Hiring and firing are normal. A company of 20,000 firing 20% of it's workforce sounds major but that's the industry. It's normalized because it is normal. The field of software engineering is so fungible 20% of employees losing their job is nearly meaningless in the current job market because you can throw and rock and find another seat to warm the next day. It's not like Ford closing a factory.
In other words, you need to relax and get out of your head a little. This industry is nothing like the factories. When 20% of factory workers lose their jobs everyone rightfully panics because it's not as easy to get another factory job (at least anymore...here in the west). 20% of tech employees getting laid off from a company is a nothingburger. 99% of these people will be able to take two weeks of free time and find another job for the same (or often better) pay. This is the definition of trivial.
Based on this, I suspect it's highly likely the hubris in this comment will not age well.
I snapped off my sunglasses and, trying to contain my annoyance, said, "Guys, I solve problems and create systems."
After a long moment of silence, they looked at each other and nodded in approval. The boss reached out his hand to shake mine. I was hired.
https://media.tenor.com/L0RMEbQrLXwAAAAM/meme-sunglasses.gif
2) No idea. My Indian contractor coworkers never seemed to care. It's the H1Bs that panic during a layoff (understandably).
3) I don't think it will, that's why I get mine while the gettin' is good and hopefully have enough to not worry about the future whenever the FAANGs finally succeed at driving wages into the ground. However, given there are nearly 4 jobs for every engineer currently in the field according to the BLS I'm not worried at all about the next decade. I'll just continue to stack cash and re-evaluate every once in a while.
... In the US.
This feels like those addenda where medical trials keep on showing some clinical effect and people in the comments have to add, some clinical effect... in mice.
The US software landscape is shaped by a unique VC landscape that has not been reproduced anywhere else in the world.
If you have lived through the dot com bubble or the 2008 sub-prime crisis you will also be aware that funding can dry up as quickly as it is thrown at you.
At the moment at least in Europe I still see a hot market for contracting roles but for permanent roles it is in no way what you describe of 'find another warm seat the next day'.
But > you can throw and rock and find another seat to warm the next day
Ummm, nope, not everyone's resume is pristine or has a portfolio to share. Lots of immensely talented people are at companies far outside Silicon Valley, both the place and the spirit. Not everyone can point to some app or site for public consumption, lots of work is on internal tools or programs or DevOps that no outsider sees or knows about, or is protected by all kinds of non-disclosure and IP restrictions. Some great people have an awful boss who would never provide a recommendation. There's a million reasons why getting a new job can be hard, be grateful that it appears easy from your perspective but recognize many, many extremely capable and talented people aren't in the same situation.
You seem to ignore both the trend shifts in factory jobs and software jobs. Factory workers once had exactly the same status as you describe here:
> 99% of these people will be able to take two weeks of free time and find another job for the same (or often better) pay
Also, software engineers (at the big scale) are slowly but steadily loosing the glorious position in the workforce market they once had.
And as fast as companies hire (which people celebrate), companies can quickly layoff too (which we lament).
So just as it is normalized to do fast-hiring, such is the case for fast-layoffs/firings.
But I’ll be the devil’s advocate and present the harsh reality:
As a late Gen X / early millennial, I’ve experienced these economic downturns three times: the fallout of 2001 dotcom bubble, 2008 Great Financial Crisis (GFC), and this Covid shock era. The lessons learned each time, is the corporations try to survive at all costs, and casting many individuals out to fend for themselves is the base case.As a college senior in Computer Science in 2002-2003, my many classmates had jobs lined up in Oct 2002, ready for graduation and work summer 2003. The tech company stocks were flying high, but all of a sudden, in a month, all those companies had cut entire departments. Hearing the news, a lot of friends that thought they had “secured” a job, called those companies and almost all of them were in limbo - those cut departments didn’t even return the calls to say “sorry, entire dept. was cut, start looking again”.
My parents generation was used to the “gold watch retirement philosophy”, stick w/one company for 50 years and they will take care of you. That reality shattered for them during the 2008 GFC. They had worked for 20 years at the same company, but faced with layoffs and cuts, they no longer really knew how to interview and learn new skills. As a result, my dad “retired” at 55, always looking but never finding that next job. Luckily, they were in early tech (AT&T), and mom found contracting roles to service the legacy tech they worked on during full employment. The lesson here was that - don’t let those skills and interview skills rot. Being at one place for 20years and specializing can seem like “security”, but actually was a curse after the shock.
And here we are now, after ~14 years of relative stability, time to flex those survival instincts, don’t rest on the past comforts.
(That doesn't mean I support layoffs in the slightest, just that I'm bothered by that line)
When laying off people isn't normalized what you get is an inefficient labour market, where companies can't adjust to market conditions and hiring people is too costly. That leads to stunted growth, and everyone loses.