As If the Job Market Wasn’t Bad Enough, Intuit Makes Things Exponentially Worse
GE was the all-American company. General Electric was founded by Thomas Edison in 1892, and there were few industries in which it didn’t touch. It was famous for the lightbulb, the electrical grid, aviation, hydroelectric power, and x-ray machines. It was synonymous with middle-class suburban prosperity—starting in the 1920s, its household appliances—dishwashers, toasters, refrigerators—were in homes across America. Hundreds of thousands of employees had life-long careers–a living wage, benefits, and stability. It even had a sponsored attraction at Disneyworld in Orlando, Florida.
In 1981, Jack Welch took over as CEO of GE. One of the first things Welch did was lay people off. In the first two years, he laid off 72,000 people and shut down a dozen factories. He instituted what he called the “Vitality Curve.” Every manager of every unit would rank their department and fire the bottom 10% every year. Before this, mass layoffs were rare and were only conducted if a company was in an abysmal financial position. Layoffs were a death knell for the company and a sign of poor leadership.
Today’s employees labor under the pervasive fear that their jobs could disappear anytime. Few things strike fear into the hearts of employees than a sudden meeting invitation from HR. Layoffs are no longer out of the ordinary; they are expected.
This week, software company Intuit laid off about 1800 people or 10% of their workforce. As if that was not bad enough, CEO Sasan Goodarzi publicly announced that about 1050 employees being let go were underperforming and not meeting expectations, effectively branding any former Intuit employee looking for a job now as a poor performer.
This is especially egregious because “performance” is highly subjective, regardless of whatever metrics are put around it. I’ve worked with thousands of clients during my career, and I can’t tell you how many horror stories I have heard about people being let go for “performance” issues. Based upon my observation within the universe of my clients, it seems that, more often or not, performance issues are manufactured to mask bogus, often illegal, reasons for termination. Your boss just doesn’t like you. Your boss sees you as a threat. You spoke out against something. You disagreed with a big decision (and it turned out that you were correct). You disclosed that you observed objectionable behavior by coworkers. All of these are underlying reasons for which my clients have been terminated. People are targeted with bad performance ratings all the time.
Make no mistake, if a company needs to shed 10% of its workforce, there is a serious management problem. In fact, if you read the message on Intuit’s blog, you can infer that poor strategic planning and forethought are the cause of this failure. Just because layoffs and reductions in force have become commonplace does not obviate the fact that what Intuit did is absolutely absurd, callous, and very bad for business. Hopefully, other companies will look at this as a case study of how NOT to conduct a layoff.
The business landscape has evolved significantly since the days when GE epitomized American prosperity and lifelong employment. Modern companies must navigate complex challenges, but the dignity and respect for employees should never be compromised. Intuit’s recent actions are a stark reminder that the methods by which organizations handle workforce reductions can have far-reaching consequences on their reputation and long-term success.