Transcript
Speaker: Hey, stop. If you think that layoffs start with low performers, let me ask you this. Where did the number come from? Here's the thing. In most companies, the number comes first and the names come second.
Speaker: Let me be honest with you. I have sat through those management meetings. I've seen how the list gets made. I helped make the list.
Speaker: Believe me, it's it's a messy business. and And here's where it's important. if If you think this was just about your last review, you're gonna miss how to protect yourself.
Speaker: So stay with me, I'm gonna walk you through the exact chain of finance, then ah HR, then the boardroom. I'm gonna show you all the different offer types, what happens when you say no, and how to protect yourself starting this very week.
Speaker: So who decided your role was too expensive before you ever heard a rumor? Let us pull that one apart. Remember, you did everything right. You you showed up, you worked hard, you you paid your dues. And then one Tuesday, they thanked you for your service.
Speaker: That hurts. Here's the reframe though that you need to hear. This is rarely about your worth. It's about a cold, hard spreadsheet.
Speaker: Let us begin where it always starts. Not with you, with finance. Every reduction I ever saw started the same way. A short-term gap, missed sales in the quarter, year-end target risk, investor pressure over margin, a correction after hiring too fast, or or creeping bloat during good times.
Speaker: First, you see the small freezes. Travel freezes, hiring freezes, no more coffee, subscriptions are canceled, no more contractors are being renewed. And then finance comes along and says,
Speaker: Ah, it's not enough. Labor is the largest cost that a company can control quickly. You can't sell buildings quickly. You can't replace big systems quickly, but you can cut headcount relatively quickly. So finance sets a target. Cut cut this many heads or cut this percent of payroll. Save this many dollars before the end of the quarter.
Speaker: Here's the thing. That target has nothing to do with your last review. It's about the P and L, the profit and loss, the dollars and cents, the red numbers. The decision about the number was made before anyone talked about any names.
Speaker: Once finance sets the number, HR gets activated. ah HR is not just a messenger here. ah HR is actually the architect. HR takes the finance target and they build a proposal out of it, where to cut, which function, which layer, which location, which product line.
Speaker: ah HR defines what the lawyers call the decisional unit. That's the the group that they're gonna select from. Think of it like identifying and drawing a circle around a particular area. Everyone inside that circle is gonna be compared and ranked. Everyone outside of that circle is safe for now.
Speaker: For example, all senior engineers in one location or or all middle managers in one division. Then h r drafts the how. Will we start with voluntary offers or or go straight to involuntary cuts?
Speaker: What is the timeline? What are the communications? What's the legal review? HR also prepares the packets and the scripts. Scripts, so that every manager says the same approved words on the same day at the same time.
Speaker: Let me ask you this, did your manager really choose or or did your manager receive a script? and a list What do you think? Drop it in the comments below. Now, let's go to the boardroom where the names actually get attached to the list.
Speaker: This is where I can speak from from personal experience, but I'm not going to give any company names here. Just what I saw going through this process four different times.
Speaker: So top management, they meet with with HR to review the proposal and to finalize the numbers. The the spreadsheet, it's it's on the screen, right? Salary bans from high to low, tenure and benefit costs are flagged, locations, remote status in the columns, skills, current or legacy.
Speaker: You get sorted. In my experience, the the early retirement discussion typically started at age 55. That was the cutoff we talked about for the offer group.
Speaker: So that that was at least one circle that that that we could draw on the on the table, as I mentioned. Voluntary first. So if not enough people would take it we would make it involuntary next. And different managers, they they try to push the cuts out of their areas, real territorial but ah battles. Don't cut my people, cut them cut them from that other department. My my department is more more important.
Speaker: It can get really ugly when people try to protect their silos. But then listen to the language. You're never gonna hear about age in the room unless they set that floor for a retirement program. What you're going to hear instead is cost, agility. You hear flattening, you hear restructuring, you hear future skills and and digital needs.
Speaker: My company even used a special euphemism, competence shift. sounded neutral, it sounded techy. It was framed as future skills for tech-related roles.
Speaker: but But here's what it did in practice. It shifted out older workers, especially in tech-heavy positions. So if your work kept the old systems running for decades, you were considered maintenance or legacy.
Speaker: If new hires worked on cloud or AI projects, they were called transformation. Same company, same effort, different label. And here's an irony alert.
Speaker: We stop training experienced people. We call them legacy. And then we say, we need a competence shift. Competence shift, it sounds clean on a slide, almost innocuous, but...
Speaker: Ask who it really shifts out. And let me be honest with you. What is said out loud in the, in the boardroom is, is numbers and skills. What's not said out loud is who built the system and kept it running for decades.
Speaker: Before we go on, let me take a ah quick moment here for some self advertisement. Please hit the subscribe button below so you don't miss an episode. And also please visit ageismsurvivalguide.com for more information. for resources and an overview of our offered services.
Speaker: Now, let's get into the process that companies really use. So how do they rank people inside of that circle? let Let me show you five different methods that companies use the most.
Speaker: So just to note though, I just have to say, this is not from my former companies. This is kind of a a standard toolbox that's used across companies and industries. Method one is position elimination. They cut the entire role, not just one person on paper, and then they they rank everyone in those affected roles. And if your entire role is gone, no amount of tenure is gonna save you.
Speaker: Method two is a skills matrix and future skills mapping. Who fits the new tech stack versus who gets labeled as legacy. If your work is called maintenance while the new work is called transformation, you're probably at risk.
Speaker: Method three is ah a cost and salary band sort. I've got something on my screen here. High salary, long tenure, higher benefit cost. That combination gets flagged fast. Again, it's not personal. It's math and a spreadsheet and who floats to the top of the cost column.
Speaker: Method four is a performance and stack ranking inside of the decisional unit. They they compare you only to the others in that small circle. Sometimes they add tenure rules like last in, first out, but but in the US performance inside the group matters more. And believe me, managers try to pick their favorites to stay, especially when the cuts span across departments.
Speaker: Method five is use of critical role exclusions and location filters. Who is protected only because they know the system? Which site closes, who's remote and easier to cut on paper?
Speaker: One company I know, they they disappeared quite a few people during COVID since everyone was working from home. They hoped nobody would notice. After the ranking, there's a legal check. They test for disproportionate impact on protected groups. So if the list hits one group too hard, they revise the criteria. They don't just swap names around.
Speaker: and And that's why research shows that reorganization was the top reason or method for reductions. A recent Society of Human Resources Managers, or SHRM, Pulse from March 2025 found that reorganization at 50% was the top reason for reductions, with strategy change at 37% and poor performance at 36%. Translation, structure first, people second.
Speaker: Now let us decode the the packets that they hand out. There are two main voluntary types. Type A is a voluntary separation program with broader eligibility, usually a lump sum tied to tenure, extended benefits for a few months, and and some outplacement help. With these, you must exit within a defined time window.
Speaker: And importantly, you sign a release of claims. Type B is a voluntary early retirement plan. This one is for age and service eligible employees. In my personal experience, usually this was targeted at 55 or older.
Speaker: It may add pension credit, a health bridge to Medicare, and and retirement timing benefits. and And here's what what you must know about the process. for For group programs covering people over 40, federal rules generally require written disclosures. You need to see who's eligible, the time limits, job titles, plus ages in the affected decisional unit.
Speaker: You generally get at least 45 days to consider and seven days to revoke after you sign. This is by law. You need to know that many plans are written as severance plans, not as retirement plans. Labels matter, and this is a really important point. I want you to do two things as a result.
Speaker: know If you get one, read the plan, the document itself, not just the summary. and And talk to an employment lawyer in your state before you sign any waiver. Don't sign what they call a gift that that needs somehow a signature within 45 days without getting external advice. Don't don't do it.
Speaker: So what happens if you say no? if If not enough people volunteer, companies often move to the involuntary cuts. Those those terms are typically less favorable and and you lose control on the timing.
Speaker: Employers, they they they warn that a future reduction could have lower benefits, but but they shouldn't pressure people one by one or promise that you're going to be targeted for saying no. Now a quick note on performance improvement plans or or PIPs or PIPs since I've been asked.
Speaker: A PIP is ah a possible kind consequence after you decide to stay. Some people who decline, they they face tighter scrutiny and write-ups. It's one path, not the only path, though, that companies might take to try to push you out.
Speaker: If you stay, make sure to document from day one, save your reviews, save proof of results, track the timeline of changes around you. And what about those left behind after the cuts?
Speaker: Survivors, they get they get heavier workloads. Institutional knowledge has has walked out the door. Their friends have walked out the door. Trust drops, guilt rises, quiet job searching starts, and and more voluntary exits likely follow.
Speaker: Studies call this survivor syndrome. Less loyalty, more stress, more mistakes because fewer hands are doing more work. Our time to rise is not about working harder for a system that priced us out. It's about building you up and preparing you.
Speaker: Remember, the list started with a number. Not with your name, not with your worth. You're not outdated. You are identified and and and priced out by a spreadsheet and a euphemism.
Speaker: I want you to do one thing this week. Pull at least two of or three of your annual review reviews from past years. Then write down your your decisional unit as best as you understand it. The team, the titles, who was offered what, if if you know.
Speaker: Save three or more proof emails that you solved real problems and were thanked or congratulated for them. and And tell me in the comments, which euphemism did you hear?
Speaker: Was it restructuring, agility, competence shift, something else? And don't forget to subscribe to the channel below before the music starts.
Speaker: As i always say, youth runs fast, but age knows the terrain. I'll see you in the next one.
