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@ThePyroPython@lemmy.world

Post #2832031

2026-05-16 15:00 UTC

Slashing 10% of your workforce annually is something Jack Welch thought of when he was CEO of General Electric; essentially it shifts that 10% of staff overhead cost straight to profits per year. The justification they give for the figure is that it’s the lowest performing 10% according to internal key performance indicator (KPI) metrics. What this effectively does is two fold: Anyone who’s focusing on delivering stuff the company needs long term isn’t always or sometimes never will produce nice neat KPIs that can be measured along with the rest of the company. This means these people are under constant pressure and can often get swept up in the firings. It makes KPIs, a measuring tool, the target which as any statistician will tell you that when you make the measurement a target it ceases to be a good measuring tool. Because everyone is automatically incentivised to deliver KPIs NOT the actual company deliverables that generate the added value and therefore the profit. This means after 5 to 10 years of this cycle all that’s left of the company’s institutional knowledge is how to deliver for KPIs and the sycophants who best adapt to this reality. You get a hollowing out of the company. If this AI fuelled trend keeps up then companies like Cisco and Meta will eventually implode at some point.

Replies (9)

  • @kent_eh@lemmy.ca 2026-05-17 15:53

    This means after 5 to 10 years of this cycle all that’s left of the company’s institutional knowledge is how to deliver for KPIs and the sycophants who best adapt to this reality. You get a hollowing out of the company. That happened (and continues to happen) to my former employer. After years of layoffs and outsourcing, the company doesn’t have anyone on staff anymore who knows how half of the systems work. Theae days, if something is more than 5 years old, the operations and maintenance staff (entirely outsourced contractors now) have to pray the documentation is correct (or even obtainable) if they have a hope of fixing it if anything breaks.

    Open ##2832030

  • @Brummbaer@pawb.social 2026-05-16 15:57

    I think we are already seeing that with Microsoft. Another 2-3 rounds of AI and they forget how to build windows.

    Open ##3052839

  • @floofloof@lemmy.ca 2026-05-16 16:38

    It also fosters a culture of non-cooperation with colleagues (because they are now your competition), where workers and teams try to sabotage each other, or at least not help, and throw each other under the bus. So there's mutual mistrust too. And no one wants to take a risk and innovate, leading to further stagnation.

    Open ##3052840

  • @Zagorath@quokk.au 2026-05-16 17:01

    > The justification they give for the figure is that it’s the lowest performing 10% according to internal key performance indicator (KPI) metrics The thing is, that's *not what layoffs are supposed to be*. That's effectively firing someone for cause. Maybe in America the difference doesn't matter, but in the civilised world, at least in theory, it does. But in reality they can somehow get away with this and call it "layoffs". If a company does layoffs, they should not be allowed to hire *any* staff in the same or similar roles for 12 months.

    Open ##3052841

  • @pelya@lemmy.world 2026-05-16 16:30

    With Meta it very much looks like overhiring. What are those 8000 workers even doing, designing CSS for each individual ad on Facebook?

    Open ##3052842

  • @Blooper@lemmy.world 2026-05-16 15:53

    God willing

    Open ##3052843

  • @Razak@lemmy.ca 2026-05-17 18:14

    Yup. Not all value is easily and directly measurable. Trying to overmanage and only value measurable factors is incredibly counterproductive. But hey, that makes the stock price go up. So who cares about anything else.

    Open ##3052844

  • @assertnull@programming.dev 2026-05-18 02:33

    > makes KPIs, a measuring tool, the target which as any statistician will tell you that when you make the measurement a target it ceases to be a good measuring tool This came up recently elsewhere and is known as “[Goodhart’s Law](https://en.wikipedia.org/wiki/Goodhart%27s_law)”

    Open ##3052845

  • @errer@lemmy.world 2026-05-16 17:01

    I actually think a few % a year is healthy (1% feels right to me). I work at a company where we never lay anyone off and it’s led to a bunch of deadweight in the company that make work harder for everyone else. You gotta have some mechanism to let low performers go. 10% is way too high though

    Open ##3052846