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Rumors of layoffs seem to always overhang the pharmaceutical business -- it seems like, at some companies, there's a slow painful drip of impending cuts. Worse, the pace of cuts seem to be accelerating from once every couple of years to once every few months. These cuts seem to take place in a few awful steps:
- Cuts are rumored to take place at some near-future date; often, this date gets delayed.
- Productive higher-level thinking often grinds to a halt as the 'true' date gets closer and everyone waits until the ax has fallen.
- The ax falls: shock, dismay and horror. Survivors' guilt reigns amongst the survivors. The laid-off leave and their absence is felt profoundly.
- Employees say, "Wow, they're now cutting bone, not fat. They can't possibly cut anymore."
- After being asked and asked and asked, management says, "We don't plan to make any cuts again for a long, long time..."
- Cuts are rumored to take place...
Here's the Chemjobber plan for creating some level of morale in the meantime. It will never get implemented, but what's the harm?:
- Management decides that they're going to revisit cuts at some future date, 2 or 3 or (dare I suggest) 4 years in the future.
- Day 1: Management lays waste to their R&D departments, cutting all the people they think they're going to cut in the next 4 years.
- Day 2: Management announces to their workers: "We've cut all the people we're going to cut until October 1, 20XX. Congratulations, you're the new team. You have (whatever) years until we make another decision on layoffs. Breathe easy until then."
- After 2 months of survivor's guilt and freaking out, everyone settles down and gets to work, ignoring that future date until it's soon enough to worry.
This, of course, is a plan that completely ignores the reality that business expectations (shareholders, etc.) in our modern times seem to hold. It will never happen. But I think it would create some space for being able to engender some level of trust and calm among the employees.*
*I suspect that this plan would have all sorts of weird effects on hiring, etc. The pharma world would start to look a lot more like professional sports in its hiring patterns, which I'm not quite sure is a good thing.
I don't think business could ever adopt this model because it tends to run short term rather than long term. Next quarter's results and next year's results. This is what I see as the disconnect between research and business. Pharmaceutical companies do understand the importance of long-term research but because of the quarterly requirements can't support it properly, I think.
ReplyDeleteCutting during bad times is expected, but how about during the good times?
ReplyDeleteI was cut near the end of a year when my division was having record sales AND record profits. Why the cuts? Because the CEO wanted an extra 10% at the bottom line the following year and the economic outlook for the coming year was not that great, so there were 15% layoffs. During good times, really really good times. Doesn't that do wonder for morale?
I've been involved in three layoffs (two when I was laid off and one when I wasn't.) Surprisingly, one was handled pretty much like CJ's ideal. They didn't handle the "telling people" very well, but they gave the laid off people a week to get their things in order, and then told everyone else, "this was painful but necessary. We don't intend to make any other changes for at least a year". And they didn't. Morale and productivity stayed high. Perhaps not surprisingly, this company no longer exists - it was swallowed up in the pharma mergers.
ReplyDeleteThe other two layoffs were not so great. One was abrupt - we were called in, told we were all laid off, and had to leave immediately. No access to computers or cubicles - a security guard packed up what appeared to be "personal" and brought it out to us. I saw it coming and started taking things home, but some people lost information they'd stored on their work computers (scientific papers, etc.) as well as items in their desks. The third layoff was the worst. It was spread out over three months. No one knew who would be laid off - everyone had to "reapply" for their jobs and for three months everyone was in limbo. Morale and productivity dropped to zero. Good people who would probably have kept their jobs started leaving in droves. Even after the layoffs, I heard that morale was horrible, and layoffs continued in waves for the next year. (I think a lot of people here will recognize this company.) I really wonder if any research is still being done at this company - I occasionally run into someone who left after I did and they said the only thing keeping it going was fear and desperation - I can't imagine anyone being creative in that atmosphere. I truly don't understand how anyone (even an MBA) could think that was the best way to handle the situation.
@Kay.
ReplyDeleteThose are awful stories. My father was in the middle of a layoff of style of your #3. He's a financial analyst and has been at the same company for nearly 40 years. In the end, I don't know if he was glad that they kept him or not.
Management ... ugh.