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Combined result of four criteria
1. Performance (absolute, and relative to peers)
2. Future demand/business outlook (for this skill, role, department, unit ...)
3. Ease of lay-off / cost of lay-off (incl social responsibility considerations, incl considerations of who will remain to pick up critical work)
4. Degree of networking / friends in the firm
Ideally it’s only 1-3 in that order, but depending on the firm, you may find #4 also factors in, and you may find a different order
Also based off which area they work in (eg you work in a sagging sector, you may go despite decent performance)
Rising Star
A very political process often based on strategy, org/team structure etc
Often different division heads will have HC reduction targets, and will usually look to argue their case for lower targets for their divisions (depends on org)
That process also happens at a lower sub team level.
Firms will also sometimes cut functions/teams which they feel are not core or high returning in their business (e.g. Samsara, Uber. Applies similarly to consulting unfortunately as well)
Other than on an individual basis during performance reviews, how do firms select who to lay-off?
depends on the partners i guess.
Please keep in mind that there is a difference between performance-based exits and layoffs. Performance-based exits happen annually based on reviews and results of performance evaluations. Layoffs occur when there is a significant restructuring, downturn in the business, etc. Layoffs tend to impact a much broader population and often the decisions on who will be exited don’t depend on performance but things like level in the organization, functional skill set, etc.
Chief
No. No. No. Yes. No. Yes. Line them up and choose.