The media’s obsession with layoff tallies is starting to remind me of the body count reports from the Vietnam War. But I just read an article “Half -a-Million Job Cuts: Is There a Strategy Behind the Layoffs” on Knowledge@Wharton that reminded me that there is another angle to these layoffs. As it points out:
…for many of the companies which have announced or will soon announce layoffs, the current economic crisis is not necessarily the cause of their problems; it is simply what has exposed them. As intuitive as that argument may be, experts say that managers within the companies as well as analysts, investors and policymakers outside the business face the risk of putting too much, or even all, of the blame on the current economic crisis, rather than looking at deeper causes.
To put a slightly different twist on this, there’s a bunch of technology providers with fragile business models, creaking old products, or questionable commercial viability (I’m looking at you Web 2.0 startups) that have been convincing themselves of their genius over the last 5 or 6 years when it was actually an over-heated economy that was disguising those flaws.
So here’s my advice to all you CEOs of technology companies laying off staff or are planning to soon.
STOP BLAMING THE ECONOMY!
Because when you do you’re just fueling the fear that is only going to make the economic situation worse.
Instead, step up to the podium, clear your throat, wipe the bead of perspiration from your forehead and pronounce that you screwed things up. Tell everyone that you were blinded by an economy distorted by easy money, inflated asset values and unsustainable corporate profitability. And, as a result, you failed to consider how viable your products, supply and demand chains, and pricing models were under normal economic conditions.Then, in addition to the layoffs, tell everyone exactly what you’re going to do to get things back on track.
This won’t stop the haemorrhage of jobs. But at least you’ll be setting the right tone about what’s really going on.
