Thursday, July 10, 2008

The hits just keep on coming

The Chicago Tribune announced Tuesday that they're going to cut better than 10% of their newsroom positions and reduce the paper size (already smaller than it used to be) by 13 to 14 percent. This is not the post to comment on the possible effects on news-gathering in Chicago, or on the general inadvisability of making a civic institution subject to the same leveraged buyouts that have damaged so many other companies.

What I found interesting was an interview done on our PBS station with, among others, Steve Johnson, the Internet critic for the Tribune. He expressed relief that the decisions had been made, and the paper could now move forward in re-inventing itself to cope with the onslaught of new media.

This is a very common reaction in the face of layoffs, that the cuts have been made and the path is clear to return to profitability and success. But I have worked in information technology for the past years, and have gone through a number of these sequences. I have been laid off twice, another time lost a job in an acquisition, and so have a good idea about the arc of these things. For some reason, Johnson is unaware.

The first time I was laid off, I worked for a large financial institution. My department was not the first affected, but, when they got around to us, there was a good-sized reduction. This was all pretty new to me at the time, so I, like a lot of others, figured, good, we'll miss the people who are gone, we'll have to work harder to pick up the slack, but at least it's over, we can move ahead and make plans and deal with actual issues.

The second set of layoffs put that notion to rest. Understand that there had never been a re-evaluation of the work, a prioritization, everyone was just expected to step up. Our reward was to be among the chosen who got to stay. But the second round was the killer, as it did a number of things. We realized that the first one had not been the "cut the fat" round that it had been purported to be. We understood that management really had very little clue as to the value of certain people versus others. And we knew that the ax could fall again any time some higher-up needed to make the numbers.

When they came for me in the third round it was almost a relief. Tough times for me and others; financial institutions were all engaged in this behavior at that time, and it took quite a while, a new degree, and a major focus shift to get a solid foothold in the workforce again.

The second time I was laid off it came in the sixth wave. Once again, the same pattern, though I was smarter this time - the first cut dropped 15-20%, the phrase having evolved from fat-cutting to "clearing the deadwood." A lot of people, including, embarrassingly, my manager, assumed that would be it, that the decks were cleared and we were ready to go.

Then came the second cut, and the third, and so forth. Each time it becomes harder to believe that it's just the low performers getting the shiv, especially when it's people you've worked with and know to be excellent. You see how politics enters into it, how those with higher salaries tend to be lost regardless of value. You notice the reluctance of upper management to get rid of first-level managers that they themselves promoted, no matter how blithering they may be (or how inappropriate it is to move them back to hands-on positions). You see how whole product lines are cut, which is fine, but no attempt is made to consolidate and find the best employees of the lot; apparently that would be too big a drain on management's time.

What was most sad, especially to those of us who were more seasoned, was the hope and relief that would come over most people after each round. They wanted to believe what management was saying, that the company had turned the corner and the cuts were over. And it never seemed to be true, because 2-3 months later, it would happen again, and again. This particular company ended up cutting 2/3 of its people and, even now, five years later, rumors of layoffs still rumble through every so often. Apparently there are "stealth layoffs" that continue to this today. (By the way, that same manager is still there, having been shuttled from management to development and back to management, continuing to show a remarkable lack of talent in either, still insisting that this is it, that the cuts are done, that his group won't be affected - fool.)

Another interesting phenomenon is the public-ness of these cuts. The first one is always ballyhooed, as the company is going to get back on the right side of the cost curve, enacting needed financial discipline. And the stock price usually responds favorably. A few months later, the second cut comes, a bit more quietly, and the stock price barely moves. Each subsequent slash is more of a secret, and at some point the announcement actually hurts the share price; apparently even the Wall Street analysts recognize that it's bad management that forces a company to go to the layoff well again and again.

But this is the dynamic workplace that so many people, mainly those in executive suites with golden parachutes or in ivory towers with tenure, tout as being a sign of strength. Destructive change inevitably leads to greater efficiency, making a better world for all. If some are left behind or damaged irreparably, well, that's the price we pay for that better world, and we'll just agree to ignore the hidden costs.

But, perhaps I'm wrong this time. Maybe Johnson will be right and the Tribune is going to make this round of cuts and develop a new-media strategy and find a profitable advertising model and pay back Sam Zell's debt and enter a wonderful new world of 24/7 media integration, blah, blah, blah.

I wouldn't count on it, though. This is already the fourth set of staff reductions in the past two-and-a-half years at the Tribune, most of which came before hard-driving businessman Zell took over, before the highly-leveraged purchase occurred. I would say the probability is far more than 50-50 that the cuts have just started, and that the Tribune will be far different in a couple of years from how it is today.

Whether it will still be worth reading remains to be seen.

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