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Tough medicine

October 19, 2008

I’m not sure a spoonful of sugar will help in these rough times in the economy, but it certainly could at least help you feel better for a short moment.  Catching up on news from this week I came across TechCrunch launching the f@%kedcompany for the new downturn: The TechCrunch Layoff Tracker.

To intro the page the have a great graph that espouses what I’ve been saying for a long time … if your company is having issues or entering tough times cut early, cut ONCE, and cut deep.  I’ve lived through not doing that in the last dotcom bubble burst in 2000-2001.  The company I worked for went through seemingly endless layoff rounds and morale was totally shot.  We were eventually purchased for about half the amount of cash we had on hand … bought with our own money.

Essentially, if you make a deep cut in workforce early in a downturn sure there’s a morale hit, but at the same time the core group of folks who are left know that management is serious about preserving the company – and their jobs.  If management decides to cut a few jobs here and there “so as not to make anyone worry” they’re actually doing the opposite – who knows when you could be next.

So in the last couple weeks we’ve heard of lots of layoffs from companies that are well funded (Zillow for one).  While a lot of folks are viewing this as a sign of the economy tanking (and I don’t disagree there), I think this is more of a sign of CEO’s making the right decisions for the good of the business and the majority of their employees.  Sure it sucks to be the 1 in 4 employees laid off from Zillow, but 3 in 4 now have a good fighting chance of riding through this recession in one piece.

If only my former employers heeded these lessons…

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