For you guys wondering how it is even possible to fire 30k people at once:
In every organization of that size there is cruft. Mind-bogglingly large cruft. Working with those behemots will teach you that you could fire entire departments and no one would notice. There is so many people simply tasked with completely non-customer relevant things like reviewing HR review forms, etc. - they get their pay, produce no tangible value.
Now mind you, every company needs people to keep the whole structure going. HR, IT are never profitable, of course. But at some point during the growth phase of a company these start to metastasize - they are cancer, feeding themselves, leeching of the company that hosts them. And not just money, but also power. Suddenly managers of those areas have a say in company direction. Block innovation because of 'processes'. Have never seen a customer, never produced anything in their life, have no shred of idea of the core business of their company.
And just like cancer treatment, past a certain stage you need to cut deep and wide.
Prahalad and Hamel laid a bit of groundwork for more effective org-cancer treatment with their core competency definition.
You know your cuts were deep enough when a few months in you notice pain. People not being able to service customers effectively. And you'd be surprised just when this really happens at places like HP. 9% is laughable. If you have lots of layers in an organization, every employee laid off has a ripple effect. Need less HR, accounting, IT, etc to service less employees. Even less layers of management as you can combine teams.
Looking at certain country hubs of HP here in Europe I'd wager you could easily cut 50% of the current workforce without any negative impact on customer relations.
> You know your cuts were deep enough when a few months in you notice pain.
There is always a layer or two of cruft in any large organisation, and I'd throw numbers like 10% out of thin air so 9% seems pretty reasonable. But cutting yourself until you bleed doesn't seem a healthy behavior.
Added to that, in an organization where power games are all the rage and completely unneeded divisions have gained a say on important matters, the 9/10% you are cutting might not be the ones you really wanted to get rid of.
P.S: At the exception of cutting an entire location or activity, It feels to me like you won't see much companies successfuly cut 10% of their workforce and turn the ship around. Not that it's a bad move, but it feels like you'll hit the bottom anyway when you come to this point (now once you touch the bottom you might actually be able to come up again, who knows).
> But cutting yourself until you bleed doesn't seem a healthy behavior.
(To take the analogy probably too far) Due to any number of legal/psychological/morale/etc issues, sometimes you need to draw a little blood just to make sure that you got it all. If you hit an artery, well, you're screwed, but if you have a couple of good people stuck in a terrible department, you can nuke the whole department and re-hire the good ones back (often as contractors, then as FTE). This seems silly but compared to the costs of selectively choosing 30k people and it's probably far cheaper.
That's a good point. I was thinking about how hard it can be to get rid of corrosive elements that are entrenched in your organization (by definition you can't count on them to filter the wheat from the shaft). Cutting a bulk of your employees and try to get back the good elements afterwards is an interesting solution.
the problem is you simply cannot assess from the outside which areas really are needed - at least not in reasonable time. intra-company services that are reflected in the books (fake money being charged for services) muddles the picture considerably as everyone claims profits - but all it does is shifting monopoly money around.
and again, internal pain to measure is useless. the company money machine is not self sustaining, it needs money from outside, from customers. once you have pain servicing them, you have cut enough and can start make positive adjustments.
if HR is complaining after cuts - congrats, you have identified broken internal processes. make do with the people you have. resources shape processes, not the other way round. Not enough people to run the multi-layered holiday approval process? Have the direct manager approve, no one else. Voila, just saved millions in internal cost. HP services employees track their expenses in several systems, in parallel. Manual entry. The organizational retardation of such a place is amazing.
In every organization of that size there is cruft. Mind-bogglingly large cruft. Working with those behemots will teach you that you could fire entire departments and no one would notice. There is so many people simply tasked with completely non-customer relevant things like reviewing HR review forms, etc. - they get their pay, produce no tangible value.
Now mind you, every company needs people to keep the whole structure going. HR, IT are never profitable, of course. But at some point during the growth phase of a company these start to metastasize - they are cancer, feeding themselves, leeching of the company that hosts them. And not just money, but also power. Suddenly managers of those areas have a say in company direction. Block innovation because of 'processes'. Have never seen a customer, never produced anything in their life, have no shred of idea of the core business of their company.
And just like cancer treatment, past a certain stage you need to cut deep and wide.
Prahalad and Hamel laid a bit of groundwork for more effective org-cancer treatment with their core competency definition.
You know your cuts were deep enough when a few months in you notice pain. People not being able to service customers effectively. And you'd be surprised just when this really happens at places like HP. 9% is laughable. If you have lots of layers in an organization, every employee laid off has a ripple effect. Need less HR, accounting, IT, etc to service less employees. Even less layers of management as you can combine teams.
Looking at certain country hubs of HP here in Europe I'd wager you could easily cut 50% of the current workforce without any negative impact on customer relations.