Converging Messages

Two messages crossed paths in my inbox yesterday. First, an item arrived from The Information, a tech-focused news source, contained an article by Jeffrey Pfeffer of Stanford University entitled, "The Layoff Contagion Is Hurting Us All."

Many, indeed virtually all, of the companies that have announced layoffs are still making money and have strong balance sheets. They may be doing layoffs in anticipation of economic hard times to maintain their profit margins. But few if any are on the verge of going out of business. In that sense, their layoffs are discretionary choices.

Weren’t some of these the same companies that less than two years ago were paying search firms and giving employees bonuses to add staff? Of course. Companies seem to have perfected the art of buying high—hiring in the middle of booms—and selling low—doing layoffs when the economy seems to be shrinking. None of this makes sense.

To Pfeffer, the juxtaposition of strong balance sheets with massive layoffs creates downstream problems which will affect everyone in the end. When it is clear that investors and senior managers don't care about the people doing the work, those people will stop caring about doing the business.

Weakening ties between employers and employees create a dangerous environment wherein the long-term health and economic consequences of layoffs are ignored.

The very next message in my inbox was a blog post from management sage Tom Peters announcing his retirement from the field at the age of 80. What makes the arrival of his message interesting in light of Pfeffer's commentary above is that Peters' more than 45-year career with McKinsey and then at his own organization has been all about putting people first. Peters champions the human side of business in almost every presentation and slide deck.

We are sorry to see Tom leave the field, however inevitable given the advancement of years. His thousands of speeches and voluminous writing are testimonies to what he calls "radical humanism," a perspective that needs reanimating from time to time in business as Pfeffer's article makes clear.