Dot-coms of the New Economy are looking to the Old Economy to learn the fine art of the layoff. So far it is not going well.
Many dot-coms that scooped people off the streets when they were desperate for bodies naively believed they could just reverse the process. But dumping a body from a speeding BMW in front of a remote Starbucks violates all sorts of labor laws, not to mention the unfortunate impact on the morale of the remaining workers. Amazing, isn't it, how quickly after the economy slowed "associates" became "employees."
Some dot-coms laid off workers by doing what comes naturally — sending warm, personal companywide e-mails. Of course, if the company took the precaution of killing the workers' computer logons they had no way of finding out they were toast, necessitating a not-so-warm personal confrontation.
Layoffs are likely to spread, if only because the ones that have been announced — Cisco, Lucent, Motorola — have received so much attention. It's the most enduring school of management — monkey see, monkey do. (Remember all the money that was going to be made by something, anything to do with the Internet? Anybody?) No manager, even of a healthy, growing division, wants to explain to his CEO why he's not laying off people "when Juergen over at DaimlerChrysler is."
Some Old Economy firms announce layoffs to make Wall Street happy and then quietly never go through with them since studies show that the cost of hiring and training new workers when the upturn comes more than wipes out the savings from letting the old ones go. The managers are happy; the workers grateful; and Wall Street doesn't remember.
Dot-coms can't even boast about layoffs because Wall Street, rather than seeing it as lean, mean management obsessing on quarterly results, sees it as blood in the water and starts dumping the stock. One dot-com walled off and painted over part of its office to hide all the vacant cubicles, rather like the XFL and C-list bowl games covering the upper deck to hide the lack of fans.
Once, in the days of an even older economy, the Smokestack Economy, layoffs were a cyclical phenomenon, like floods. Demand in the steel, auto or rubber industries would slacken; workers would be laid off. The workers would go home, work on the house, plant a garden, fix the car. After a while, a government economist would notice increased sales of paint, tools, seed and spark plugs and pronounce that as evidence the economy was picking up. Anticipating demand, the industries would recall their workers. The men were glad to get back to work and their wives were glad to get them out of the house.
That happy 1950s state of affairs ended with the 1980s when the then-New Economy, what we now call the Old Economy, came along. Workers who were laid off probably weren't ever going back to their old jobs. So there grew up a vocabulary of euphemisms to deal with layoffs. Workers were not sacked, canned, given the old heave ho; they were "outplaced." For example, you were "outplaced because of outsourcing," a gentler way of saying, "You're fired because we've given your job to the Taiwanese."
The dot-coms haven't developed that vocabulary: "You know how sometimes on your PC you have to delete extra files? Well, you've been deleted."
Sometimes an Old Economy company will gives its workers a heads-up that layoffs are coming, but that's tough for dot-coms whose assets are people and ideas. If a dot-com hints that trouble is coming, the good employees will start job hunting and the bad ones will start copying the files and carting office supplies home.
Dot-coms relentlessly pursued that mysterious entity known as the Next Big Thing. Who knew it would be their own demise?