Generational expectations of layoffs

Investment Analysis Clubs Macro Economic Trends and Risks
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The severe recession of 1980 - 1983 (caused by the Federal Reserve raising the fed funds rate to almost 20% to reduce inflation) was a wake-up call for me. My company laid off several people in my district. These were experienced people (age > 40) while I was a relative newbie with only a couple of years with the company (age 29).

I realized then that there was no such thing as security in industrial jobs. The magazine, U.S. News and World Report, coined a phrase, “DUMPIES,” an acronym for Desperate Unprepared Middle-Aged Professionals as hundreds of supposedly “secure” white-collar employees from IBM and AT&T were shown the door. They were blind-sided – mortgages, kids in college, etc.

This knowledge felt like a cold knife in my heart. I dedicated myself to preparing for a potential layoff in middle age, an earlier age than retirement. Sure enough, I was laid off, twice, during my career. I would have gone back to work after the second layoff (2001, dot-com crash, age 48) but DH pointed out that we really didn’t need the money.

Every generation learns the same lesson the hard way.

Tech Layoffs Shock Young Workers. The Older People? Not So Much.

The industry’s recent job cuts have been an awakening for a generation of workers who have never experienced a cyclical crash.

By Tripp Mickle, The New York Times, Jan. 20, 2023

…
Millennials and Generation Z, born between 1981 and 2012, started tech careers during a decade-long expansion when jobs multiplied as fast as iPhone sales. The companies they joined were conquering the world and defying economic rules. And when they went to work at outfits that offered bus rides to the office and amenities like free food and laundry, they weren’t just taking on a new job, they were taking on a lifestyle. Few of them had experienced widespread layoffs.

Baby boomers and members of Generation X, born between 1946 and 1980, on the other hand, lived through the biggest contraction the industry has ever seen. The dot-com crash of the early 2000s eliminated more than one million jobs, emptying Silicon Valley’s Highway 101 of commuters as many companies folded overnight. …

Tech’s generational divide is representative of a broader phenomenon. The year someone is born has a big influence on views about work and money. Early personal experiences strongly determine a person’s appetite for financial risk… people who came of age in the 1970s when the stock market stagnated were reluctant to invest in the early 1980s when it roared. That trend reversed in the 1990s…[end quote]

Blue-collar jobs were always insecure. Production jobs were routinely shed during cyclical recessions. White-collar workers also need to be aware of the possibility of layoffs.

The tens of thousands of tech workers currently being laid off are probably not enough to have a Macroeconomic impact. But they may have an impact on companies that target their specific niche.

Wendy

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I started at Texas Instruments, in Dallas, in mid-1989. The Wall fell soon after and defense sectors all of a sudden was in trouble. TI laid off all of Defense Systems Group, if memory serves. That was a very early wake-up call for me. I realized there was zero consideration for the good versus the bad employees. “Everyone must go!” And at that point any thoughts of company loyalty I had were completely removed from my thinking. I was only 23.

I learned to keep an ear out to how things are going on beyond my immediate circle. At least twice now it has allowed me to find new employment before a big lay-off happened, meaning I competed with far fewer people for the next job. (leaving AMD, and leaving Oracle, are those examples). A third example was leaving TI, where I was sure the project would fail. It did fail, in spectacular fashion 6 months later, but they re-assigned everyone internally w/o a layoff.

Your only job security are your skills, your knowledge, and your network.

I am not going to miss the boom/bust cycles of tech once I retire. Not one bit.

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The pump seal company deemed salaried people more important. After I left, they instituted pay cuts: 10% for hourly workers, and 5% of salaried people. When asked about the difference in treatment, the President of the company said they wanted to retain the salaried people, implying the hourly people, like skilled machinists, were expendable.

My experience was the opposite, especially at WPI. WPI had a RIF every year I was with them. Generally, the people RIFed were middle management, while the people who did the actual work were retained. From late 2001, to when the “JC” sold the customer accounts and tossed everyone on the street, in early 06, I didn’t even have a boss, that I knew of. One year, a guy came over from the main office, for my “annual review”, but that was the only contact I had with him over the course of several years. The two times I was actually laid off were when OD entirely closed the department I worked in, and when WPI went toes up.

Steve

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The layoffs have not been that bad yet. I do not think they will get that bad.

There is a bit of shock among people I know in tech because a couple of them only got their jobs two years ago and because of over planning.

But no younger person believes they wont get laid off.

In the 1970s leading into the early 80s we all had no concept as a society what layoffs meant to careers.

Younger people now just expect to migrate. This economy has a great job market. In 1980 if you got laid off you were looking at a really bad jobs market.

Also younger folks can really canvas the job market with resumes very easily. Just a few clicks of a button. In to an interview and if people are nice, the responsibilities match up, pay is reasonable and you are working within two weeks.

1980 or even 1990 there was no two week turn around for a job. Unless you were in the process of switching employers anyways.

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Interesting thread. Thanks @WendyBG

I had a vastly different experience with my one and only layoff. Early in my career, 1987 and newly married, I worked for a pioneer database company at the time by the name of Cullinet. I was a pre-sales technical resource who would produce working demos for strategic customers using Cullinet software to meet the needs of each customer’s test case.

At the time, I was a part of the team helping this strategic client to develop their very first application using the new software. We were in the middle of the development of the pilot application that solved the inconsistency around address master data maintenance - a strategic challenge or them at the time. The application was eventually slated to go into production after a successful pilot and we were there to make sure that it happened.

I had been hearing rumors that the company was going to focus less on these consulting services, but had no thought that I would be affected. One day I was asked to report to the head office for a meeting with HR and I remember telling my wife that morning - “There’s no way I’m going to get laid off, I make 1/3 of the rate that they bill my services out at”.

Well, the strategic direction was made to reduce services, and I was in a services role, and one of the newest team members. So I was actually the first person called into the slaughter house office that morning.

I was presented with my termination status and associated benefits that I would receive as part of a separation package. Along with that, the director of services presented me with a contract to continue to fulfill the services to the end customer as a sub-contractor to Cullinet.

I thought about it a moment and asked how long I had to think about it. I don’t recall what they were expecting, but I know that I asked a few more questions, realized the potential to have my own software consulting business, and asked “Where do I sign?”.

That job lead to another contract, which lead to more contracts. That lead to the incorporation of the business, building a team and subsequent growth providing software, and the hardware and systems integration services that defined the meat of my career.

Layoffs can lead to opportunities - and I hope that this time is no different.

'38Packard

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