Magic numbers
On layoffs, five-star generals, and the implicit hazard in reducing headcount by saying goodbye to the most experienced workers
Between macroeconomic concerns and big dreams of powering everything through AI, it seems like all of the big employers are talking about layoffs and job elimination. It’s especially big in tech, where Microsoft is joining Meta/Facebook and many others in letting go of employees.
■ Meta/Facebook is taking the layoff approach: 10% of the staff is to be gone by the end of this month. Microsoft is trying a more voluntary approach, offering early retirement packages to anyone whose age plus years of employment equal at least 70.
■ Offering sweet deals to get seasoned employees off the payroll is the kind of idea that only makes sense if headcount is taken to be an objective unto itself rather than a metric or a symptom. And there’s no doubt that headcount matters as an expense -- labor is bound to be one of the top expenses anywhere.
■ But there’s also something intrinsically short-sighted about cutting ties with the most experienced employees. Some are undoubtedly deadweight, but many are the ones whose knowledge is the most sophisticated and whose intuition is the most refined. By the formula, a person who started working for the company at age 25, with a start date in 2001, would exceed the eligibility number today at age 50.
■ Shortly after a set of admirals and generals were elevated to five-star rank, President Harry Truman signed a law making that appointment permanent for the life of the officer. Age and experience aren’t liabilities unless we choose to make them that way.