Boeing and the Layoff Culture

When the recession began in 2008, nearly every organization in existence reeled from its effects. Within a few months, all anyone could talk about were the mass layoffs taking place around the country. As millions were let go, sending the unemployment rate skyrocketing, American companies developed a culture of fear. No matter what, you didn’t want to be the employee called into the boss’s office that day, because getting let go seemed like the worst thing that could happen.

But was it?

The media rallied around laid-off individuals and lamented their fate as unemployed or underemployed workers. Swept under the proverbial rug was what happened to the employees who weren’t laid-off by their companies. No one had anything to say on this matter except a few academic researchers who provided an eye-opening account of their 10 years studying the layoff culture at airplane manufacturing powerhouse Boeing.

From 1996 to 2006, the group of scientists went onsite at Boeing to study what happens when a company is inundated with layoffs. As they recount in their book, Turbulence: Boeing and the State of American Workers and Managers, the researchers found that laid-off employees were actually better off than the ones who stayed behind and struggled to stay relevant and visible, do the work of several employees and hold onto their jobs.

The scientists, who included Edward Greenberg, Leon Grunberg, Sarah Moore and Patricia Sikora, interviewed 3,500 Boeing employees at all levels as the company was in the process of merging with McDonnell Douglas and downsizing its workforce by 33 percent.

As Michelle Conlin reported in a 2009 Business Week article: “With each round of layoffs, the survivors hustled to reinvent themselves. They re-proved, re-auditioned and repositioned, only to watch yet another new manager—pushing the fad du jour—parade through the door.”

Boeing human resources specialist Frank Zemek described the survivors’ guilt, the intense stress of not knowing if and when the hatchet was going to fall, the numbness and disengagement, and the deep, pervasive grief of managers who had fired people.

The researchers discovered that overall, the employees who were laid-off from Boeing were happier than those who stayed. Employees who remained at the company were twice as depressed and more likely to suffer from insomnia, alcohol abuse and chronic health complaints.

This doesn’t totally surprise me. I grew up with a father who worked in large organizations my whole childhood, and he was always afraid he was going to be let go. His job stress sunk its teeth into our family and held on for years. On the other hand, my uncle, who was laid-off a few times during the same period, often expressed a feeling of relief that he had escaped a bad situation and could make a fresh start.

Three years after the recession began, the layoff culture has really taken its toll. A new survey by Right Management, the consulting arm of staffing group Manpower, found that 84 percent of employees are planning on searching for a new job in 2012. That compares to 60 percent of the respondents in a similar survey by Right Management conducted in 2009.

Apparently, despite the fact that the job market has still not improved that much, unhappy employees who feel trapped in a nonstop cycle of stress are willing to take the risk.

What has the layoff culture been like at your company?

This post was originally published on the AMEX Open Forum.

Comments

[Scot Herrick]

The one big difference this time around would be the level of long-term unemployed -- those over 47-weeks. If it isn't at an all-time high, it's pretty close. We haven't had, in our lifetimes, such a difficult time getting re-employed from a layoff. That would temper the happiness effect a bit.

That said, those who remain really are ignored from the science and this is a great look at the impacts. There is very little out there on what those who escaped the layoff can do to reduce the stress, much less thrive in that changed environment.

[Daniel Milstein]

Right on point Alexandra. I particularly agree with how fired employees were happier compared with how despondent those who weren't were. Through my years as an author I have learned that the uncertainty that the retained workers have felt and the fear of the unknown regarding their status in companies who are downsizing can be overwhelming. Another thing that may have contributed to their despondency is the mounting pressure to do well in order to avoid being fired.

[Alexandra Levit]

@Scot: Now would be a terrific time to do that research, before things really improve and the mass exodus begins.

@Daniel: Uncertainty is a killer. You've inspired me to write about this issue next!