Up in The Air or How to Get Rid of People in a Twisted Manner

The idiom "up in the air" signifies a high level of uncertainty; it is unpredictable and can change at any moment. It is also the title of a great 2009 movie based on a 2001 novel, starring George Clooney, Vera Farmiga, and Anna Kendrick. The film, a dramedy—as it would be called today—was critically acclaimed and nominated for six Academy Awards and six Golden Globe Awards, including Best Picture, but it earned only one Golden Globe and no Oscars. The novel, and later the movie, predicted today's widespread, colder, and more impersonal firings—sometimes remote—in both the private and public sectors.

I thought of the movie in connection with the massive downsizing currently happening in the Romanian public sector—Senate, Chamber of Deputies, and Government—which will likely extend to local authorities. At the same time, restructuring efforts are underway in several industries, including our beloved IT sector. I would like to take some time to discuss the similarities and differences between the two sectors in terms of the restructuring process.

After almost 30 years as a corporate professional, I can confidently say that I understand how this process works in a large corporation. As for the public sector, I follow the news, read comments, and stay updated through social media.

The main similarity lies in how the people who are made redundant are selected. Everything begins with a restructuring budget, which is then translated into a specific number of job cuts. The approach is generalized and overly simplistic.

Someone high up in the corporate chain of command identifies an issue: support functions exceed market benchmarks, salespeople are too expensive, a new geographical setup or organizational structure is needed, a business line's profit remains behind competitors, or the workforce's age and seniority make labor costs uncompetitive. Alternatively, the reasoning might be even more generic—such as pressure from Wall Street due to unsatisfactory financial results and projections.

More often than not, these “discoveries” are influenced by management consulting firms, which are hired to identify inefficiencies and recommend solutions—basically doing the job that top executives should be able to handle themselves, but they do not.

Most of the time, money is simply thrown away using these strategists, and top management fails to see the bigger picture. They often refuse to acknowledge it, to recognize the cause, as it is frequently linked to a mistake they made or a wrong turn they took. It is also common for an influential leader from the management consulting firm to sit on the board of the company being consulted. One hand washes the other, keeping top management happy.

Rarely are top management members—those on the board or the executive team—fired as a group; that would be too expensive. Instead, they usually find a scapegoat, someone who "retires" (or better yet, is retired), and a farewell party is thrown, with no hard feelings.

This situation closely mirrors what we see these days in the public sector, where top politicians in high authority positions “discovered” overnight a massive budget deficit. They immediately reacted by deciding that a large number of people must be made redundant.

Regarding the restructuring decision, I have always wondered why my organization had to lay off several people when my results were excellent. When they were. Nobody could explain to me why a business line, an industry sector, a delivery unit, or a product division that had delivered great results in the last 12–18 months needed to face the same personnel cuts as those with poor results and missed KPIs. As one of my bosses once told me, "Everybody needs to suffer, so no one can claim subjectivity in the process." Well, the entire process is highly subjective.

Once the downsizing decision is made, a very secretive call is scheduled by top management with a few local and global leaders, and, of course, HR. They are given clear guidelines, though nothing is put in writing. Many times, emails end up on social media, creating an undesired impact on the company's image.

Image is essential, especially for the giants of the IT industry. So, they take all the necessary measures to avoid scaring the fish or disturbing the waters. After the percentage of cuts is shared with the local leaders, the fun part begins—creating the lists of people to be fired.

Let us assume, for the sake of discussion, that I am told to cut 30% of the support functions that work for me. I have been working with these people for many years; we have had our ups and downs, but we have always prevailed together. They are like a second family to me. And now, I have to fire one third of them? Without clear performance, skills, and experience criteria, free will reigns. A strong flavor of subjectivity taints every decision.

Do not get me wrong, corporations have performance measures, some of them very sophisticated, including market trends, state-of-the-art skills in need etc. But when it comes to layoffs, they are simply forgotten; only numbers matter. Or, people’s performance indicators are used before the restructuring process, when managers are pushed to increase the percentage of low performers, so people leave the organization organically, afraid of what is about to come.

In corporations, just as in the public sector, I assume the first impulse when one must lay off people is to find a way to manipulate the numbers. For example, if someone is about to go on maternity leave, you can put her on the list, as she will not show up in the system during her absence. No harm is done because you are not technically firing her. Or, you might try to move, or better yet, hide, support functions under billable roles. Billable roles to customers are often exempt from restructuring actions, as the company risks losing revenue.

Another option is to let go of subcontractors and replace them with your employees. While not an easy task, it is sometimes possible. Moving people to other business units that are not under the same pressure is another option. One must be very creative when it comes to saving the jobs of colleagues, especially those with whom one has collaborated for many years. The idea is that the execution of restructuring is done at the ground level, and managers on the front lines can help a bit if they are clever.

But, as a corporate employee, you should never assume that your managers will cover for you, it would be a huge mistake. I have seen good friendships end during a shake-up; personal job security is paramount. From my own experience the managers who would not lift a finger for you are mostly from across the pond. Europeans are more empathic. It is a cultural thing.

Just like in the corporate world, lists are made in the public sector as well. And just like in corporations, these lists are subjective and do not reflect performance, skills, or workload. Even worse, the level of personal interest is much higher for people working for the state. They all have relatives, friends, friends of friends, and people referred by important politicians, creating an entire web of connections. Like an octopus. The lack of performance measurement is severe. The entire process is flawed and highly subjective.

The difference is that large corporations, including the ones I worked for, had a restructuring budget as part of the annual financial plan. These budgets are clearly stated and very visible every year. I remember restructuring budgets of over 500 million almost every year—sometimes much bigger. So, nothing new under the sun. Only the targets are different. In the public sector, a situation like the one we are facing today happens once in a lifetime.

The volume of employees in the Romanian public sector has been growing for as long as I can remember. Or at least, in some years, the number remained stable, with hiring only for replacements. Paradoxically, Romania's population has been declining for many years in a row. In conclusion, private companies are better managed. For them, firing people is business as usual.

For the Romanian IT industry, the current layoffs paradigm is completely new. In our industry, people have always had many opportunities; they were, one could argue, spoiled. Even if someone was fired, a new offer would come up right away. Practitioners were always asking for higher salaries, interesting jobs and projects, and new technologies. In just a few quarters, demand decreased by 25%, a huge percentage for the wonder child of the Romanian economy.

The candidates I am looking currently for in the market are often reluctant to become freelancers. Job security is more important when one needs to cover daily expenses, pay for their children's school, the house they bought, the car, insurance, and so on. Job offers have become difficult to fulfill due to the complexity of the roles, which require knowledge of several technologies, quality assurance, project management and client facing capabilities. Often, the seniority and years of experience required make it extremely difficult to find potential candidates.

The good news is that our IT professionals with a decent level of seniority are smart and will adapt to the new situation, but it takes time. I already see this in the people I collaborate with. However, I am not as optimistic about the current IT juniors or the next waves of IT practitioners. We need to generate more demand for them, bring in more projects, build new products, and open new markets and opportunities. From inside and outside Romania.

As I mentioned at the beginning of my post, this entire restructuring process is based on an overly simplistic average calculation. That is why employees at the top of the food chain—the ones who run the show—escape the process. They create rules that allow them to avoid being selected for downsizing. And this happens in both the private and public sectors. We only need to check the list of people made redundant in Parliament to see that I am right—just small fish.

I will give a loud "Bravo" when the number of Romanian parliamentarians is reduced to 300, as the referendum requested. Until then, it is just a cosmetic move to silence the critics. Or I will give a loud "Bravo" when I see several board members of a large IT company on the restructuring list.

Until then, we are left up in the air!

P.S. One of the memorable lines in the movie is the question: "How much does your life weigh?" It is food for thought for all of us. For those curious, in the movie's monologue, the answer is that what truly matters should not weigh more than what can fit in a backpack.