It's no secret that GE is in big trouble. The company was forced to cut its formerly-reliable dividends in half and its newly appointed CEO, John Flannery, has fired half the board. GE stock has plummeted 44%, making it the Dow's worst performing stock. GE has now announced it is cutting 12,000 jobs, mostly in the company's power division, which will lose about 18% of its workforce.
I've personally experienced layoffs at two huge, once-successful companies and as a business journalist have observed dozens more. I've also studied the success statistics of companies that undergo layoffs. It's not a pretty picture.
With that in mind, there are three things every GE employee--or anyone inside a company that downsizes--should do today:
1. Wake up and smell the (stale) coffee.
Layoffs are like putting an company on an operating table. For the patient to survive and recover, the doctors (i.e. top management) should cut deep and cut once. Then let the patient recover.
But that almost never happens, especially inside big firms. Instead, they make a small cut and when that doesn't work, another small cut. This "death by a thousand cuts" continues until the company dies (think Circuit City) or becomes a zombie (think AOL).
GE obviously has huge systemic problems combined with massive cultural hubris. There will almost certainly be more layoffs. Maybe GE will survive in the long run, it won't be pretty and it definitely won't be fun working there.
Thus, whatever plans you had for a future working at GE, you'd best re-evaluate them... and quickly. The new CEO and your bosses will try their damnedest to reassure you that GE will soon return to its former greatness. Not a good bet. Trust me.
2. Activate as many of your outside contacts as possible.
Getting laid off from a big company like GE creates a huge career challenge for three reasons:
- Your hard-won political understanding of how your company does business, and your mastery of your firm's technical jargon are now useless, unless you plan on getting a job selling to your soon-to-be-former employer. (Not a bad idea, BTW.)
- Your business network is loaded heavily with co-workers, many of whom are (or will be) in the same boat as you. You'll probably be competing with them for the same jobs. As contacts, they're mostly useless except if you like commiseration.
- You're now carrying the stigma of a loser company. "I worked for GE" might have impressed people in the past but eventually (i.e. sooner than you think), you'll be admitting, rather than bragging, that you once there.
Considering the above, your highest priority is now activating and cultivating your business relationships that aren't directly connected to your current employer. I explain how to do this (without coming off as self-serving) in How to Reactivate a Business Contact in 7 Easy Steps.
3. Take the package, if offered.
When big companies do layoffs, they always ask for volunteers, who in return for leaving of their own free will receive a "golden parachute" usually consisting of extra compensation. If you're offered such a parachute, take it.
The second round of layoffs have "silver parachutes" that aren't as generous and as the death by a thousand cuts continues, the parachutes proceed through the precious metals, ending "lead"--which means you basically get bupkis.
A real-life story might help to illustrate this point.
When I worked for a Fortune 500 company (notice that I'm not admitting which company to avoid the taint), I worked with a guy who was totally useless. He attached himself to projects, went to meeting, but did nothing. Personable, but useless.
Note: this paragraph is optional; you can skip it if you like. The only time I remember this guy saying or doing something memorable was when he showed a slide scanned from a biology textbook showing different types of rat poop, to aid in the identification of species in the wild. His message was simple: "to be successful in this company you must be able to tell the difference between a huge pile of rat poop and a small pile of rat poop." Except he didn't say "poop."
Anyway..., in the first round of layoffs, this useless guy got offered an extremely-generous golden parachute: one and a half times his current yearly salary! And he was highly paid, si that was a lot of money.
Unfortunately, "useless guy" passed because 1) he knew if he got another job he'd have to do some real work, and 2) he foolishly believed that the first round of layoffs would be the last. In the end, he hung in there until he was fired outright... with two week's severance.
Hey, don't be that bozo. If you're offered it, take the money. Then run don't walk to start your own business. You'll probably never get a better chance to permanently cut the corporate umbilical.
With that in mind, Scott Adams (of Dilbert fame) once told me that he'd never met anybody who got laid off who didn't think, a year and half later, that it wasn't the best thing that had ever happened to them.
That was certainly true in my case. Like the bozo, I passed on the golden parachute and I ended up taking what I guess you be considered a "copper parachute"--two week's salary for every year of service and six weeks of accrued vacation time.
While I was soon making more money (and was far happier) than when I worked in cubicle hell, I wish I'd taken the far-more-generous parachute when it was originally offered. I could have used the extra cash.