define many. What percentage? Think of company employees as software that has been installed, where the company is the OS. Package management has made it dramatically cleaner to install and remove software, but there isn't any such thing for companies and employees.
Over time, companies accumulate cruft... employees who underperform. Same thing with governments and their programs (not software).
One of the ways to clean house is to dump a massive chunk and rehire the people on an as needed basis, likely with higher pay. The company has still managed to get rid of the dead weight, and the employees who are genuinely needed get more money. Similar to doing a clean OS reinstall.
That's the theory anyway. Very disruptive but it can be successful.
In Australia we have a delightful government spin on this process.
It's decided that the civil service needs to be reduced by some factor. With heavy heart, it is decided to do this the humane way: voluntary redundancies are offered to those who want to take them, with a generous severance.
If you've been doing well, great deal! You will get a good reference, and can easily find a new job.
If you've been twiddling your thumbs...uh...no thanks, I'll stay put.
I really appreciate when a solution is so almost-right that it is very, very wrong.
I always thought those voluntary retirement schemes were weird! Another interesting feature of the schemes is that they need to be individually approved by the taxation office,[1], probably because payments under them are tax-free,[2] while 'normal' redundancy payments are often taxed at about 30%.[2]
It's hard to see how it is in the public interest to promote these schemes with tax incentives. It would be interesting to see an official rationale for them.
I experienced this at a network ad agency office I worked for in 2010. Financial crisis of 2008, massive cuts, layoffs, etc. Everybody who was a go getter with qualifications took off, leaving the bottom barrel people at their posts. Since the agency had some guaranteed work from network wide contracts, it never closed up shop, but by the time I was hired on, it was the blind leading the blind.
I only have anecdata from being there in the aftermath, and have no idea what the real numbers are.
But the layoffs weren't merit based from what I understand, and they usually never are for legal reasons. You just lop off whole teams of people. And you are right: they cut too far, and have to rehire some of those people back...but I'm not sure if they would hire the right people back. You know, the ones that could get a job somewhere else just pack up and leave pretty quickly, what was left were the good people who didn't want to leave South Florida, and once they did the move to Austin, they lost all of those people anyways.
That's the theory, but there's the argument to be made that in practice, those smart enough not to put up with that bullshit and also talented enough to get hired elsewhere go do just that.
Over time, companies accumulate cruft... employees who underperform. Same thing with governments and their programs (not software).
One of the ways to clean house is to dump a massive chunk and rehire the people on an as needed basis, likely with higher pay. The company has still managed to get rid of the dead weight, and the employees who are genuinely needed get more money. Similar to doing a clean OS reinstall.
That's the theory anyway. Very disruptive but it can be successful.