The Deification Of Layoffs

Remember "Neutron Jack?" Or maybe the fascination with Elon and his "fork in the road?" This shouldn't be held up as "good" anything, even if you worship the market.

In many ways, Jack Welch of General Electric (GE) fame was considered the executive of the 1980s. In many other ways, he was terrible and probably set GE up for the fall they are currently in — he got them to about a $410B market cap, but they’re sub-$100B now and he made a lot of questionable calls around GE Capital and more. He was a very big “stakeholders” guy, although later, post-career, he seemed to understand that employees matter as well.

Thing is, he was also called “Neutron Jack” because he did massive layoffs all the time. Neutron bombs keep the building standing but kill everything inside, essentially. In many articles when he passed away, the “Neutron Jack’ thing was treated as virtuous and great, although there were a couple of Twitter threads where people were like “Welch fucked my family by laying off my grandfather,” etc. Let’s address this all briefly.

Layoffs are not a good thing

Most are taught to chase growth. Layoffs save you money — yay! — but are technically the opposite of growth. Plus:

• You lose institutional knowledge.

• You run your existing employees into the ground at the Temple of Busy.

• We keep saying business is about relationships and connections, and mass layoffs are pretty much the polar opposite of that concept.

• It’s basically a Band-Aid on a dam if that’s your primary “strategy” to hit numbers.

So why do we view them as a good thing?

Easy, and a few reasons: