How the ax falls

Layoffs are never easy, but doing it the dot-com way is just plain dumb.

Published January 25, 2001 8:30PM (EST)

Vacuous venture capitalists, pompous marketing executives, egocentric programmers, lemminglike day traders -- one needn't look far when searching for dot-com downturn villains. From start to finish, the past few years of speculative new-economy bubble-headedness will no doubt go down in history as a gruesome case study in inept capitalist behavior.

Back in the day when IPOs for the likes of were sending stock prices to obscene heights, it was clear to plenty of cynical observers that hype had replaced substance in the Internet economy. But few people could have imagined just how ugly and stupid the end of all the fun and games would be.

Here at Salon, where we are both part of the dot-com mix and obliged to report on it, we have been reviewing an endless stream of story pitches from newly laid off dot-com employees lamenting their harsh new "emperor has no stock options" reality. Judged individually, these stories, most of which are drenched in a cloying cloud of ironic self-pity, don't tell us much more than how it feels to be a liberal arts major who got a groovy job just out of college and then lost it all of a sudden and gosh doesn't that really suck. But judged collectively, these "last days of my dot-com" stories start to add up -- as yet another datum of evidence proving that the entire dot-com explosion was just one massively botched-up amateur hour.

Never mind start-up entrepreneurs' well-known inability to control costs or produce products that people actually wanted -- these jokers couldn't even be trusted to get rid of their employees in a halfway civilized manner. We'll concede that laying off people is never easy; there is no painless or perfect way to get it done. But a survey of our recently unemployed friends and colleagues reveals a stunning variety of ham-handed exercises in corporate doofusness. In the spirit of sharing, we offer you a few choice nuggets.

Freezing at

"Here's how the layoffs began," recalled one former employee of "The human resources director sends a list of the people that are to be canned within the next few weeks to the CEO. All e-mails to the CEO first go through his personal assistant. The personal assistant's name happens to be on the list of layoffs (a small, yet crucial fact that the HR director happened to overlook). The assistant starts e-mailing the other people on the list, letting them know of their impending doom.

"The next morning, HR is forced to move quickly and do all the layoffs before they had planned to. My phone rings and I have a feeling I know what's coming. 'Due to market conditions, we're unfortunately having to lay some of our employees off. Please try to keep this to yourselves, as we're trying to control the flow of information.' Do they not realize how close we all sit to each other? Come on, everyone could probably hear her on the phone, laying me off. She's only a few cubicles away.

"I hang up my phone. My co-worker's phone, which sits merely inches from mine, begins to ring. She ignores it, knowing what's coming. One by one, all the phones in my area ring, letting us know (at least those of us who actually picked up the phone) that our project has been terminated, thereby rendering us expendable.

"Ah, the Internet. At least I have some good stories to tell."

All the news that's fit to print -- oops!

"We had the unique and possibly unprecedented experience of reading about our layoffs in the very publication that was laying us off, before management bothered to inform anybody," reports a staffer at the New York Times on the Web. "Sure, all the classic signs were there. Rumors, hearsay, admonitions delivered over e-mail: 'Supply orders are on hold till further notice or until our resources are exhausted,' read one particularly evocative message.

"Management quickly spun into damage control mode and called a meeting early the next week. Martin Nisenholtz, the CEO of New York Times Digital, reassured the newly anxious remaining employees that nobody had done anything wrong. The downsizing was purely a result of 'deteriorating market conditions.'

"He stood in the middle of our just-finished new office space. An enormous two-floored, Starbucks-inspired, 1997-era dot-com Arcadia, the space -- and the untold millions it took to create it -- was apparently not a mistake. (It's now maybe half full.) Also apparently not a mistake was the multimillion-dollar purchase of Abuzz, a 'knowledge-sharing' software company that has been an unmitigated failure on every level.

"Funny how layoffs work. The axed employees apparently amount to $6 million in saved payroll. Probably just enough to squander on yet another ill-fated 'visionary' Internet venture."

Tone-deaf at

Hire, hire, hire -- whoops, time to start firing. At layoffs came right on the heels of steady expansion. "They kept hiring people in editorial as late as November," says one former employee. "Plus, managers were really tough about allowing people to take vacation time over the Christmas holidays. Management said, 'Look, we can't have everyone going off -- we're really gonna need you.'"

But by the Tuesday after New Year's, execs were singing a different tune. Staffers received voice-mail messages instructing them to be at the office by 10 a.m. sharp, at which time they would receive an e-mail directing them to one of two rooms for a mandatory meeting.

"At that point," said our informant, "the jig was up." The next morning, he received an e-mail telling him to report to an inauspicious locale: the small conference room on the office's lower floor.

The news was delivered with a heavy dose of euphemistic jargon. "We were told: 'As you know, there's been a restructuring, and you have been affected by the restructuring.'" And just in case staffers hadn't quite gotten the gist, "they said, basically, 'You have 45 minutes to get out of the building.' They had boxes ready for us to pack our stuff up in."

Some staffers who were late getting back from vacation -- or just plain late -- arrived at the office to find that they couldn't get in; their key cards had been disabled. Once they got in, they discovered, along with the rest of the laid-off staffers, that their e-mail had been cut off.

The final insult came later, as the newly laid-off staffers congregated at a bar next door. The company's CFO and CEO joined the crowd and tried to commiserate with the workers they had just laid off.

"It was the most tone-deaf move I've ever experienced. At the very least, they should have left an open tab and walked out."

You won't find this entry at

The week before 75 employees were laid off at, rumors about impending cuts were so heated that two senior vice presidents accused each other's assistants of leaking information. They hadn't.

Corporate officers tried to take control: "They decided they needed to own the rumor mill," says one editor. In a Friday afternoon meeting, a senior vice president convened staffers to dispel the rumors. He informed them that there would be some layoffs, and that they'd know by the following Thursday just how many people would be cut and who would be let go.

After dropping this bombshell, the executive turned to more pressing matters: site traffic and overall page views. Some staffers found it hard to care. "If you don't know if you're going to be there next Thursday, you don't really give a shit," said the editor.

At 4:45 p.m. on Wednesday, the editor got an e-mail announcing a 5 p.m. meeting. "We all filed downstairs and the door to the conference room was locked. We're standing outside the meeting room -- it was like a cattle call."

When the door was unlocked, 27 people filed into the room -- all, it turned out, soon-to-be laid-off employees and their supervisors. But once the meeting got underway, it took the executive in charge 12 minutes of discussing the future of the company to get to the point.

"That made me furious. I thought, either he's an idiot or he's the most insensitive person. 'Oh, I can't wait to throw myself on the funeral pyre -- at least the brand will go on!'"

Eventually, he broke the news, sort of. "Some of you will be leaving this Friday, and some of you will be leaving on Dec. 1, and you'll know when you get your package from the director of HR, who will be up here momentarily." But the human resources person was nowhere to be seen.

The executive produced a list of everyone who had been axed and proceeded to read it, with feeling, pausing between each name for somber effect. "He goes through the names and tries to look up to where the people are, but he doesn't know who's who, and he mispronounces names. It becomes really weird. You just feel like a real asshole sitting there."

By the end of the meeting, staffers still didn't know which day was to be their last. "He reads off all the names, and then we sit around there for about another five or 10 minutes for the HR person, who never comes." So some of the axed went home to their families with no idea whether they'd be at work for two and a half weeks or two days, and without a clue as to what kind of severance they'd be receiving.

As for the editor we spoke with, she spent her last two and half weeks at work looking for a new gig, with the blessing of her former bosses: "All editorial production stopped then. [Management told us:] 'Use the resources here to look for a job. We're really sorry. Finish up whatever you can. We're not expecting you to be really productive.' That was really nice."

The San Francisco staffers of this doomed dot-com knew something was coming the week before, when they were summoned to a mandatory all-hands meeting. But the real tip-off that restructuring was imminent came when staffers arrived at the office and ran into a group of thugs -- security guards hired to make sure no one lost his marbles or tried to steal office supplies.

The meeting began at 10 a.m. and lasted about 45 minutes, during which time nearly the entire staff was let go. Ex-employees were given exactly half an hour to gather their belongings and files before the building was shut at 11:15. As employees left via the elevator, the security guards checked bags and interrogated staff members about headphones and laptops and other paraphernalia.

Business card confetti at the Industry Standard

There's nothing worse than finding out about your company's layoffs by reading about them in the news -- which is how staff at the Industry Standard discovered the ax was about to fall. After a Jan. 5 article in reported that the Industry Standard was about to tighten its belt, staffers went home for a weekend of speculation about whether their days at the company were numbered.

On Monday, when the news was finally handed down, tensions ran high. And so it seemed appropriate for staff in an information services office overlooking San Francisco's financial district to fling their business cards over the balcony, down 14 floors to the street below. The sky rained red-and-white business cards, said observers, and people below stopped to stare up at the confetti drifting down to the street.

"I found out who was being laid off when I went to lunch and found their business cards out on the street," said one staff member who was spared. "Until I saw the cards, I didn't know they'd been laid off."

Sorry about that, Bob!

What's worse than getting a pink slip? How about getting a pink slip that you weren't supposed to get? "Bob," after toiling several years at a large dot-com, knew that layoffs were imminent but never suspected that he would be one of the unlucky many. Nor, for that matter, did upper management.

On the day of the layoffs, Bob was dismissed by a midlevel manager he had never worked with directly. He collected his last paycheck, signed his dismissal papers and jumped in a cab to go home and fume. Only the next day did he get a phone call from the boss with whom he had worked closely in the past; it turned out that his sacking was the result of an administrative foul-up. The management was as surprised by Bob's dismissal as Bob was. Whoops.

After an effusive apology, Bob is now back at his job -- for the time being, at least.

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