It may seem counterproductive, but some companies hire people with no intention of keeping them. Essentially, they use them as tools to balance their balance sheets, discarding them once they’ve achieved their goal. The goal, however, has nothing to do with work.
A notable example is Meta’s over-hiring during the pandemic, where the best engineers were hired not to work on the company's projects, but to keep them from working for their competitors. According to Stewart Butterfield, Slack’s former CEO, this over-hiring was done to help middle managers get promoted within Meta.
Ultimately, regardless of the value of a new hire, many of them were laid off when the middle managers moved up within the company.
Hiring Cannon Fodder for Future Layoffs
A Business Insider investigation found that Meta wasn't the only firm that hired employees even though it had no intention of having them do an actual job in the company. Amazon also engaged in hiring practices aimed at meeting internal turnover—which is called URA, or Unregretted Attrition—targets set by managers.
According to the outlet's sources, managers were under pressure to dismiss a certain percentage of employees annually to refresh teams and remove those who weren’t fully committed.
To protect existing teams, however, managers would hire new employees knowing they would be let go in the future. “We might hire people that we know we’re going to fire, just to protect the rest of the team,” one manager told Business Insider.
Amazon CEO Andy Jassy allegedly used the so-called “hire to fire” practice before leading the company, with an assumed 6% turnover rate for his team’s employees, according to the report. If his team didn’t meet this percentage in a given year, the shortfall was carried over to the following year.
The employees targeted for dismissal weren’t directly fired. Instead, they were placed in performance improvement programs and given unrealistic targets, making it difficult for them to avoid being let go.
During the multiple rounds of layoffs the company has announced since 2020, certain employees were consistently included, and managers made efforts to keep their teams intact. When questioned by Business Insider, Amazon denied any knowledge of this practice, despite the fact that some of its current executives were team managers during those years.
These employee turnover practices largely account for the high turnover rates in tech companies and the significant rounds of layoffs witnessed in recent years. Simultaneously, these same companies continued to recruit new employees.
Image | Wikimedia Commons [JD Lasica]