October 13, 2015

Layoffs and Loyalty in a Liquid Valley

Layoffs Are Painful. Even if the X Doesn’t Land on You
(Image: Dreamstime)

In seventeen years of work in Silicon Valley, I’ve only left a job by choice once — in 2011, when I made the jump from being a partner at my own consulting group to join Google. The other three times, my employer informed me my time was up, and at that my services were no longer needed, loyalty be damned.

In two cases, the startup I worked for ran out of funding, and once, the new VP wanted to change things up, bringing in somebody they previously worked with instead of going with the team they inherited. When it comes to a debate between the company succeeding versus your being comfortable, the CEO will never pick you.

Layoffs Suck.

Layoffs initiate feelings of numbness and outrage, fear and self-doubt. People cry at almost every layoff, even if their jobs were spared. Others yell or curse under their breath as they are escorted out of the building, having already handed in their security badges and seeing their work files, along with hundreds or thousands of email threads, no longer relevant, slip from their view.

I’ve seen companies hire armed guards to patrol the building, in case of retaliation, and once arrived at work the morning after a reduction in force to find a brick had been hurled through the HR VP’s office window, making the premises a crime scene.

Layoffs suck. Getting laid off sucks. Seeing coworkers lose their jobs sucks. Laying people off.. sucks. When a company cuts staff, they are admitting something has failed and needs to change. They’re not growing fast enough. Too many people were hired to do not enough things. Something isn’t working. Today, Twitter laid off 336 people. That’s a lot. Not the 30,000 reported layoffs at HP, but a significant number, one that wasn’t supposed to happen at one of the tech industry’s most discussed companies.

In recent months, gallons of digital ink have been spilled on the frothy technology market we see today. Talk of unicorns and skyrocketing Bay Area housing prices focuses a microscope on the top one percent of success, while many on the outside look in wonder why they haven’t joined the vaunted three comma club. Effort and skill aren’t enough. You need luck too.

I’ve been lucky enough (so to speak) to be present at a number of layoff rounds in my near two decades in the Valley. Let’s talk about it. It’s human.

May 1999

After eight months as an E-commerce analyst at a low-revenue startup during the dotcom heyday, my boss rolled up to my desk in his chair, and in halting English, crowned by his Russian accent, told me the lead investor was done with his little experiment, and we, in two weeks, would no longer have jobs.

His crowning quote: “You and Ferris (my colleague) are laid off. I am fired.”
More: Real Valley Stories: You Stay, Your Boss Has to Go

January 2001

Somehow I escaped that layoff with my desk intact. I took a different role with the sister company in the same building. While that was unusual, and I put in nearly two solid years at the company, it too fell on hard times.

Our $1 million in seed funding (at a $10 million valuation) was running dry. By the end of 2000, we were asked to work without salary, waiting for a follow-on round that never came.

A few weeks into the new year, my boss, the VP of Marketing, called me into a meeting to say he was laid off. In fact, all of sales, business development, and marketing, myself included, were done. Only the engineers would stay behind to clean up the mess.

I lingered around the full workday, wasting time on the Internet, until a friend flew into the San Francisco Airport, as we were set to go to MacWorld Expo the next day. He helped me lug my PowerMac G4 and monitor to my car, and I was done. The next day we saw Steve Jobs introduce iTunes.

November 2001

After a brief three weeks out of work, which seemed like an eternity, I landed at a fast-talking hardware storage startup with $30+ million in the bank, en route to a 72 million Series C round that May, which valued us above $300 million. But our gaudy goals, combined with product slips, ruthless competition and a shocked economy after 9/11 meant we just weren’t meeting expectations.

With rumors buzzing in the hallways for weeks, we cut 15–20% of staff on a Friday after Halloween, said goodbye to our crying coworkers, and were battered by a huge reality check. Our charismatic CEO swore up and down in a mandatory all hands meeting that afternoon in the company breakroom that we would never have to experience this again. He was wrong.

April 2002

Five months later, we had another all hands meeting. But our CEO was missing. In his place, the chairman of the board, who informed us that he, not kidding, was the new CEO and that our previous CEO was visiting family, in Italy.

There was no mob hit, but the following week, we browsed the Active Directory from our Windows machines at the office, and quietly sat shocked as we saw red minus signs on dozens more of our coworkers, whose accounts were immediately made inactive.

I looked up to see two of my best friends in the hard working Inside Sales team grab boxes at their desk, and punched the cubicle wall.

That afternoon, our Marketing Communications Manager, on his honeymoon, called me at my desk to ask about the rumors. I couldn’t tell him that by the time he got back to the office, he’d be without a job. The next Monday, he packed up and joined the ranks of the unemployed.

June 2005

Having somehow lived through the post 9/11 recession, raising money when we needed it, and delivering a product that just enough customers liked for us to keep the VC checks flowing in, we were on our third CEO, fifth head of marketing, and fourth sales lead. Or something like that. Our stock options had been reverse split twice, first at a 550–1 exchange, and later, 40–1. They were worthless. So there was a lot of grumbling.

Amidst the grumbling, some things were working. The product was starting to find a niche. A few verticals swore by it. And we were able to raise a series AA - a recapitalization that essentially rebooted our financial valuation, and trashed the cap table, wiping out previous investors.

One of the requirements to the raise? Another reduction in force. But this time, instead of sacking the underperforming or most-recently hired, the company excised the bad apples who talked badly about leadership and expected failure.

When their pink slips came, they were happy to get them, and the company was happy to see them go. My old boss, and the IT manager, who closed his own account, literally had tee times set up at the golf course that afternoon, and groused about how long the layoff was taking, so they could make their appointment.

February 2009

As I pored over the tech newswires, I saw news that our chief competitor,NetApp, had missed earnings, and cut hundreds of jobs. Our newest marketing VP, the sixth to hold the role, had joined us from the NAS storage giant, so during our sales meeting, I tapped her on the shoulder and gave her the news. Her eyebrows shot up. She got up from her laptop, grabbed her phone and went to the hallway to start making calls.

One of those calls was to an ex-colleague of hers who had been impacted. The new marketing VP’s vision? Bring her old friend in as someone she knew, and give me the gift I’d watched play out in front of me many times — the layoff.

By April, I too got pink slipped and was on my own. My running clock of eight and a half years of loyalty got reset to zero.

You can lament the frequent job changers,
but the company doesn’t have loyalty to you.

In business, and particularly in the insular, navel gazing, Silicon Valley, it’s easy go Pollyanna and only talk about good news. The billionaires. The parties. The VC funds and App Store rankings. On the flip side, it can be easy to demonize the bad actors or complain about traffic, and the ripples of corporate decisions. But the truth is always in the fuzzy middle.

Loyalty is wonderful when you find a passion and team you can believe in. But it can all be discarded in an instant, through a fight with a manager, or a merger or acquisition that sees you as redundant. A stock market crash. A change in heart. A bad quarter.

Layoffs happen. They can make you question everything you worked for. All the thousands of hours you put in caring about the little things that got you to where you are. All the conversations and debates that made the product you own.

You have to reexamine what’s important and decide on a new trajectory. And it’s okay to take time to both feel and to heal. Being emotional is part of what makes us human, even in a data-driven world being taken over by robots. So yes, it hurts, and you are going to be angry. Furious even. But being laid off in 2015, in an active tech job world is a much different event than in the tighter, pessimistic environments of 2001 and 2008.

Twitter’s job losses today won’t be the last we’ll hear from current and past unicorns. Those who ride the highest, like Icarus, can be burned by the sun.

Disclosures: I work at Google, which is an occasional partner to Twitter, and assumed competitor in some ways. I have friends at Twitter. And any examples I use here related to my previous work experience are intended to be accurate, even if I missed a date or anecdote.