What happens when workers are treated as expendable variables rather than valued contributors to the company’s success.
Today various roles in product development face heightened uncertainty. Even if you’re someone who performs well in your role, there’s no guarantee of continued employment. This leaves many professionals vulnerable to layoffs, and it reflects a systemic issue where workers are seen as expendable variables rather than valued contributors.
The focus on the best interests of shareholders overlook the human element, leading to employees questioning their worth and commitment. It’s crucial to redefine successful product teams and foster a culture of mutual respect and accountability. Prioritizing employee well-being is not just socially responsible, but also essential for long-term success.
The cost of executive responsibility
Over the past four years (2020–23), Meta invested around $50 billion in the metaverse,¹ a pet project of the company’s CEO,² hiring a large amount of people in the process.³ As it became clear ROI didn’t meet expectations and a much larger investment would be required for a much longer time, the company laid off tens of thousands and pivoted towards AI, jumping on the bandwagon with unconvincing results while making questionable claims about making it accessible.⁴
Similar stories have played out in tech: executives and board members draft business plans, teams are staffed accordingly through hiring and re-teaming, and if such plans do not succeed,⁵ companies minimize operational losses, often by laying off workers, in order to satisfy investors while new plans are being made. This has led to a cascading effect among major companies in the sector.
According to Stanford business professor Jeffrey Pfeffer, layoffs have become a socially contagious behavior for companies. When one downsizes, board members of its competitors wonder why they are not following suit.
If it appears as if an entire sector is experiencing a downward shift, Pfeffer argues, it takes the focus off of any single individual company — which provides cover for layoffs that are undertaken to make up for bad decisions that led to investments or strategies not paying off.⁶
It has come to be expected as part of the game, although the long-term consequences are much bigger than the short-term benefits. I have written before on the negative long-term impacts, to which I add Jack Kelly’s argument in favor of companies being socially conscious: if cost-cutting measures are warranted, C-suite and high earners should be considered first for lay-offs in order to reduce the number of people affected. This is first and foremost a pragmatic consideration, beyond the issue of responsibility for past decisions taken. Says Kelly:
Not only do the senior-level professionals earn lush salaries, they are also highly compensated with stock options. Their separation from the payroll would save a fortune compared to the average worker.⁷
This is particularly meaningful now, as executive pay rose disproportionately compared to other workers over the past 30 years.⁸ The Economic Policy Institute notes CEO-to-worker compensation ratio reached 344-to-1 in 2022 — for reference, the prevalent ratio in 1965 was 21-to-1. They further note
[c]umulatively, however, from 1978–2022, top CEO compensation shot up 1,209.2% compared with a 15.3% increase in a typical worker’s compensation.⁹
Denim overalls, not vicuna suits
Broadly speaking, companies’ internal structure give priority to shareholder opinions, and executive pay is connected to performance. That means executive performance is measured by ROI for shareholders.
In this context, workers are a variable: a requirement to get the job done, but once the job is done they become a maintenance cost. As such, worker retention is only a requirement if the costs of layoffs plus new talent acquisition and training are higher than the costs for talent retention over the period under consideration.
This resonates with Meltem Naz Kaso Coskun, who thinks positions in research and development (R&D) structure to play either a support or core role. To her, people in support roles should think of themselves as temporary, like the farm pickers of a century ago.
If we draw parallels between Spotify’s approach to hiring and laying off and seasonal work dynamics, we see this: The rapid growth that required a multitude of roles, including UX Researchers, mirrors the influx of labor during peak seasons in agriculture. However, as the need for massive innovation subsides, a leaner, more adaptable team remains — a concept reminiscent of seasonal employment.¹¹
Claypool argues that in order to better survive in this environment — in order to increase your chances of being selected for an interview and move further in the hiring process, retaining employment, and progressing in your career — you must be able to quantify one’s impact, to put an ROI value on your resume.
In other words, being able to say how much you pick per hour.
Coskun asks us to consider our position in our jobs and question if we really are indispensable — and if so, by how much. Are we serving a wave of innovation, or are we just a part of teams that sustain and refine products?
And yet, given the waves of mass layoffs that affect both support and core roles, one could argue every position is at risk when engineers with decades of in-house experience are laid off by email.
Perhaps that’s why we see two different behaviors emerging:
- The company is successful in its plans but lays off workers anyway.¹²
- The company hires workers to remove them from the market, not to accomplish business goals.¹³
In both cases, there’s a common theme of workers’ careers being impacted by things that have absolutely nothing to do with their performance at work, or their company’s financial health and market performance.
So if employees are not part of the fashionable in-crowd, and their pay hasn’t grown at a proportional rate, and job stability is unreliable, and good performance doesn’t ensure retention, then what should employees expect to get in return for their commitment to the company’s goals? And why should they care about what the company wants to achieve?
The role of a team
By comparing technology roles like UX Research to seasonal work rather than consultancy, there is a lack of a safety net for seasonal workers. Unlike consultants, who maintain a client focus, tech employees may feel like they’re part of the team, until layoffs occur. This reality introduces uncertainty, fear, and low self-esteem.
Besides highlighting the need for worker protection, Coskun’s arguments raise two questions: What is a business-crucial role? and Why being part of the team matters? It’s impossible to define what a business-crucial role is without clarifying what the business is trying to achieve.
Take Google search as an example. These days “[it] is part encyclopedia and part predictive engine, guessing what you might be typing or thinking, serving information based on what others before you typed.”¹⁴ That kind of functionality requires programmers more than UX designers. But the monetization drive to prioritize other Google products above the actual results users seek may require marketing professionals more than programmers – and may even put them off from wanting to work on it.
As for being part of the team, group integration is the first step towards building great product. Research shows¹⁵ how team bonding at companies have an impact in product quality. It enables productivity, better problem solving, smarter risk-taking, increases creativity and innovation potential. For employees, they feel happier, it lowers their risk for burnout, and they can access more personal and professional growth opportunities.
Marty Cagan constantly reminds us:
Good teams have a compelling product vision that they pursue with a missionary-like passion. Bad teams are mercenaries.¹⁶
When you don’t feel like your participation is valued by the team and/or the company, you provide less input and become disengaged with the product. When teams feel the company is not committed to them, their engagement decreases and they become people who just take orders. Employees who feel they’re replaceable have reason to become mercenaries.
When companies themselves become mercenaries, why should employees be any different? If it’s a dog eat dog world for companies with a much larger pocket than an individual contributor, it’s even more so for the employees themselves.
Being part of the team, of the organization, of the company — it means we help each other keep our bearings. We tell hard truths when necessary, as we put in the extra effort and commitment to make sure the product is as good as we can make it.
It’s about creating a future filled with success, and the only way companies and people are going to get there — is together.
