A layoff fundamentally changed how I perceive work

The thing that bothers me most about layoffs due to “financial difficulties” is when you observe management wasting absurd amounts of money on something in one year, then announcing the following year that they have to make cuts to baseline, “low level” employees that don’t cost much at all.

This kind of managerial behavior seriously kills employee motivation, because it both communicates that 1) no one has job security and 2) that management is apparently incapable of managing money responsibly.

“Sorry, we spent $200k on consultants and conferences that accomplished nothing, so now we have to cut an employee making $40k” really erodes morale in ways that merely firing people doesn’t.

> Sorry, we spent $200k on consultants

A former employer decided to freeze pay for a few years and later later start laying off people. During the pay freeze a colleague suggested that we might save a significant amount of money by hiring staff, rather than paying the large number of consultants we had hired. I think the ration was something like getting rid of two consultants would free enough money to hire three developers.

Managements take was that we should keep the consultants, because they where much easier to fire, two weeks notice, compared to four. So it was "better" to have consultants. My colleague pointed out that the majority of our consultants had been with us for 5+ years at that point and any cancelling of their contracts was probably more than 4 weeks out anyway. The subject was then promptly changed.

In fairness to management large scale layoffs did start 18 months later.

There’s the whole capital expenditure vs operating expenses angle too, and depending on a company’s particular situation, one might look better on paper than the other. Without going into too much detail, contractors will be hired typically to contribute to capital expenditure and employees to the latter.

This distinction is even more relevant for earnings. So companies will optimize this for taxation and accounting to win shareholder brownie points.

Can you explain more how paying double for a contractor for tax reasons saves the company money? Or is this all some nonsense setup by the company to shuffle the numbers to look superficially better for a specific metric?

>Can you explain more how paying double for a contractor for tax reasons saves the company money?

This may vary due to region. For example in the U.S where you can fire people quickly the contractor benefit is less apparent, but in EU where after a short period you may have to spend a long time to fire someone it may be beneficial to hire a contractor rather than going through a lengthy hiring process only to find out you want to fire them.

Contractors in such an environment often are a reasonable investment for a project that has a particular dedicated timeline. Like we expect 1 year for project to finish. We hire for 1 year, and opportunity to extend for 3 months 2 times in case it goes bad.

Otherwise you have to hire for project and then do these layoffs everybody here is complaining about.

Furthermore in EU if you are paying 10000 for an employee, you probably have extra fees on top of that so you are paying 14000 (estimation) then for contractor you are not paying 28000, but 20000. The pricing is not great, but there are lots of factors that can make it seem more attractive than it might appear on its face.

Finally, Contractors tend not to do any of this quiet quitting or whatever, probably because for them it is more a business and they are also earning significantly more that makes it an interesting business to be in and to maintain.