On getting fired

On Capital Mind, Deepak Shenoy has a great post out on the TCS layoffs. TL;DR: TCS could have handled it better, but getting fired is a part of corporate life. And 3 months’ severance is generous. He also adds that we should hedge – build your brand, build savings, build skills so that getting fired won’t hit you so hard.

An argument that is being bandied about in relation to the TCS layoffs that if you need job mobility, then job insecurity is a related price you have to pay. For example, check out these tweets from Raj:

So the basic argument here (which I completely agree with) is that you can’t have one-way optionality. A generation ago, there was almost no optionality. You couldn’t get sacked, and it was very difficult for you to leave. That was the way the world worked back then.

Soon, the economy expanded, and you started seeing mobility. You started seeing optionality – the job was a one-way option. You could choose when you wanted to leave, but given the high growth and general shortage of skilled talent back in the days, companies couldn’t sack you. That sweet spot existed for a short while.

In the last decade or so, though, this has started changing. Companies realised that keeping deadwood on the books is a lot more expensive than their financial cost-to-company. A “no firing” policy sends out the wrong incentives – people without motivation are more likely to stick around than the ambitious. And that can never be good for the company. So now companies want optionality both ways. And as the TCS episode illustrates, people are not liking that the optionality exists both ways now. It seems like they were used to the one-way optionality street that existed for a short while during the rapid expansion of the IT sector.

The problem with the above argument (encapsulated in Raj’s tweets, which I agree with), however, is that it assumes that employees have a choice. When you say that “if you want mobility, you get insecurity as part of the package”, the subliminal message is that it there exist jobs where you can choose to forego your mobility in order to save yourself from insecurity. Unfortunately not too many such jobs exist. And it is a matter of liquidity.

Yes, there still exist plenty of jobs where there is strong two-way commitment. However, they are nowhere as numerous as jobs where there exist two-way optionality. The simple matter is that the “market has moved”. Most people are comfortable with the “latest” arrangement, where you can leave easily but also get sacked easily. Given that most people are comfortable with this arrangement, companies are also comfortable with this and have moved to this arrangement. And that has led to a virtuous cycle and the number of companies and number of people who like this arrangement have hit a critical mass.

In other words, if you want an “optionless” job, that is like living in the world until yesterday. But it is not enough that you want to live in that world. The world as we know it is social, and for us to live a certain way, we need other people to agree to live the same way. In other words, we can’t live our chosen lifestyle in isolation without counterparties living that way too.  And when most employers have moved on from the optionless regime to the two-way optionality regime, even if you want to live in yesterday’s world, there aren’t too many companies that still live that way. So you don’t have a choice!

So you need to learn to adapt to live and thrive in the new regime. And it is not that this regime will last forever. I’m sure people will innovate and other regimes might supersede this regime. Some people are slow to react to change, but liquidity makes the world ruthless, and punishes you badly for not adapting. That is the hard truth that some of these people who are cribbing about getting fired from TCS need to digest.

Put Comment