Layoffs are always a bad thing for employees. The former CEO of Slack now explains why he can understand such layoffs. Because many of these people would not even be needed.
Microsoft, Google, Amazon, and other large companies have been laying off many employees for weeks. Now, Stewart Butterfield, the former CEO of Slack, explained in an interview that there are good reasons to lay off certain individuals.
Because behind the hiring, which is now followed by layoffs, is primarily a calculation of certain employees.
New employees hire more people to gain more power
What does the ex-CEO say? Stewart Butterfield stated in the Bloomberg podcast Odd Lots that it is primarily about power (via spotify.com). Our Spanish colleagues at Genbeta.com report this.
When a person is hired in a company, they would first hire new people if the budget allows it. The reason is that “the more people depend on you, the more prestige you have and the more power you have in the organization.”
Because the more people depend on you, the stronger your position within the company. And this would also foster ambitions to want to rise faster. He says to Bloomberg:
If you are a manager, you want to become a senior manager. If you are a senior manager, you want to become a director. This is a very strong incentive. In my opinion, this is the root of all excesses.
This whole issue ultimately leads to having a lot of employees in a company who shouldn’t be there and, in the worst case, have nothing to do at all. And these are exactly the people who will be laid off first during layoffs.
Additionally, it also looks good on social media if you are responsible for other people. When searching for a new position, for example, a person who has many employees under their responsibility may be more valuable to a new company if they state that they led a team of 100 employees, explained Slack’s ex-boss.
What is another problem? Butterfield added that this problem mainly exists in companies where too much money is available: “Either because you have a monopoly on search engines or because venture capital funds give you a lot of money.”
Although he doesn’t name Microsoft and Google directly, it is clear who Butterfield is referring to.
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