Layoff is hard but reading the Netflix book, No Rules Rules, Reed Hastings says that they found that they were able to increase the talent density with layoff. It was great realization for them. So do the CEOs layoff to increase talent density even if they do not have any immediate financial problem?
Ya it does... but it also increases attrition due to fear and affects reputation. Ultimately drains the talent.
You could speculate all you want. Mr Hastings observed and the dats supports his strategy.
If fear is your motivation, be ready to pay top dollars
As an individual what do we do to adapt to this kind of reality?
Jack Welch had the same philosophy. I think the problem is you develop a culture of Fear. There are really two main ways to motivate people: 1. Passion 2. Fear People run from fear but they run toward passion. The tradeoff is that fear is more draining and causes a higher incidence of burnout. Passionate people not only work harder, they derive energy from their job. So in an ideal world, you want to have *both* talented and passionate people with just enough guidance to keep them organized. Most companies do not try to optimize for this because it is hard, so those who want to increase productivity run fear campaigns, and take churn as a cost of doing business.
Great example with Jack Welch. He would chop off healthy orgs, manufacturing plants, or even companies just to hit the earnings estimates for the quarter. His playbook is adapted by many.
And look at GE today! A great success story.