Why are there Layoffs?


Layoff, Termination

I love to hate the management so do most of the Engineers I guess. A reason is that they are the champions of “Political Correctness” and very rarely sound human.

Some words are very common in the Indian IT industry these days like – “Restructuring” “Operational Costs” “Resizing” “Consolidating” “Mergers” “performance” “ratings” “profit” “debt” and much more. What do they tell you? Where do all of these words point to?

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Behold, one of most forbidden words presented to you by the “Top Management” to you – Layoffs.


While the word is most of the time already leaked somehow and many employees already guess it right.

Well for me the Layoffs are results of “Top Level Management” or shall we say “Mismanagement” incompetence to perform financially for the company.

Company Financial Results

Over the quarter end, we see Executives and Vice Presidents running all over the company offices to give presentations about company performances. Very lucrative figures of Quarter on Quarter, Year on Year increase in sales, production and much more such data. Most of these are by Vice Presidents traveling all over the world.

performance layoff

Well in most companies IT departments have already spent thousands of dollars to setup state of the art video conferencing units connecting all the offices with dedicated bandwidth.  If you count the supporting equipment required, I guess it would run into millions over the years.

There are offices of the companies all over the country. Some offices are hosting just 20 employees. Do you think operational costs are sustainable for long period of time?

Sometimes there exists such an office is because some top executive lives in the city and that office cannot be consolidated because he doesn’t want it.

Yet you have these executives flying all over the world to give “presentations”.  Somehow I feel executives fly over to other countries on business trips plus foreign vacations. And this has become a norm in most companies.

I mean if you needed a physical presence of executives then why you spent this whole IT infra funds for video conferencing, projectors and then securing these traffic with setting up VPN, DLP, IPs, IDS, Firewalls and what not. Mind you these are all expensive cyber security technologies.

Then there are “Events”. All these events are organized in these expensive 7-star hotels. Completely unnecessary especially in the Indian context.

An Incident

There was one VP level IT executive in a top company was about to leave in few months. His employees convinced him to approve Dell ultra-books for all employees in the organization. So, for an organization with 50,000 employees worldwide, it raises a huge cost in finance books.


Then there was an Engineering VP who decided to close one of the offices in the country and lay off all employees and shift a few among them to another country and moved all the projects there.

The result, all those shifted projects became unsustainable in a few months as the customer support started reporting frequent outages and then due to non-performance some more employees were fired from the other office.

So for short term Quarter on Quarter or Year on Year balance sheet again they completely messed up some live and running projects.

The office where the project was shifted, the program manager had to resign due to non-performance. What were they thinking? Just by retaining few employees from an old project and moving them to train some folks over the new office, they could sustain the live projects.

For the record, they retained the top “performers” and let go of useless chaps.

But they forgot a project is a team work. Even a very ordinary member of a team is of importance.

“Top Management” forgets that if there is a member in a team however rated by “points” and “Quarterly Goals”, there is a reason for it. After all, he was selected for employment by you “high performing” team during the interviews which generally consist of many levels. Layoff or Termination is not a solution to balance sheet mess-up.

Not a sum of points

So it should be asked how come such a person, selected by clearing these tough interviews where they see IQ, technical knowledge, behavior, political correctness, ethical background, academics performance and more, became a non-performer based on some points. This completely stumps me.


A person cannot be judged by points; they are not a mathematics formula.

Well, the selection process is top notch as claimed by most companies. So you selected an employee by having him interviewed by a panel and let his work a few years. And when the investors are asking for Quarterly or Yearly performance to have a value for their money, the same employee is evaluated over points for performances.

Did someone evaluate the interview panel for being capable of hiring that person? If the employee is wrong, so are the people who hired him and this will include HR manager, reporting manager, program manager, hiring process managers and even the policy makers for failing the employee.


I strongly believe you can use points to calculate who performed better among the employees, but certainly, cannot decide who performed the worst. It would be like using the same measurement equipment to calculate air and water.

We just simply assume the highest numbers denote better performance and lowest numbers denote worst. This is called being lazy with assessments.

This is all about profit and debt. Mismanagement of company financials is leading to layoffs and I have no doubt about that. So layoffs are not going to bailout the companies from this mess unless they identify the root cause and seek to repair it.

Layoffs can clean up your costs in the financial records for an immediate Quarterly or yearly results but nothing more than that.


More to be added later…

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