Not necessarily. Layoffs do have a long-term impact on morale and productivity.

Layoffs only positively impact the business in the long run if the cuts are essential to the company's survival (otherwise, they would go bankrupt). Spotify likely had enough cash to weather the storm.

In can see the drop in moral in my team. We are busier than ever, as the work hasn't dried up, but there are no decent pay rises on the horizon. As soon as the economy recovers, most of my team will find job elsewhere.

Exactly. When moral is low and the money is not good, the good ones will jump ship first. The company would need try really hard to retain the talents

Repeated layoffs are murder on morale. Anyone who has done 2 rounds in as many years has lost all. Oral authority to evangelize their business culture. One round maybe. Two rounds you fucked up. Three is a circus.

I agree that interest rates have essentially driven most of the layoffs recently. Debt that used to cost 10c on the dollar to service has started to cost 2 dollars. If your expenses don't give, then your profits will. And potentially your liquidity.

But it's kool-aid drinking to assume a company that is over aggressive at hiring in a bull market and fires in a bear market will create more wealth. Wealth for whom is the better question to ask — certainly not the thousands of laid off employees.

>Wealth for whom is the better question to ask — certainly not the thousands of laid off employees

I think that depends on the pay structure. If a large part of your compensation is in stock then you'll still benefit from the additional wealth creation. Assuming a decent severance package it's certainly possible you come out ahead compared to the more conservative company, even being laid off.

> If a large part of your compensation is in stock then you'll still benefit from the additional wealth creation.

Oh yes, the beautiful golden handcuffs will give those laid off workers wealth. Except... the handcuffs come off and are kept by the employer. Otherwise they wouldn't have been handcuffs

> The second company will (if well run otherwise) likely be more successful over time and create more wealth than the first.

Perhaps, but it's the first company that I'd rather work for.

Just to put a number, what percentage of salary hit would you be willing to take to work in the first company? For simplification, if we take Europe as the first kind and US as the second the difference in salary could be 2-3x after accounting for cost of living.

That's a legitimately difficult question to answer, because there are so many factors that are involved when I determine what my minimum requirement is for a particular position.

But if I look at my last position and consider everything identical except that one case has laying employees off as an intentional part of the business plan, and the other case where that's not true, I would have wanted to make at least twice as much as compensation for the layoff risk.

But... working at a place where I feel insecure would have other knock-on effects. Primarily, being much less invested in the company, and so less willing to make sacrifices or take risks, regardless of pay rate. And that means that I'd be likely to be unhappy in the position. So it's all very complicated.

As a caveat, though, I am not particularly motivated by money, as long as my minimum requirements are met. I tend to be motivated more by the work and work environment itself.

I have learned that there are quite a lot of things that can't be made better through increased compensation.