If Layoffs Are Like the 90s…

Welcome to The Shift, a weekly newsletter where I provide thought-provoking ideas to help you think differently about your career and money.

Last Week + This Week = It’s All Connected

Last week I discussed why skills matter more than a job title. Read here if you missed it. This week I get into the rise of manager-doers and what layoffs mean for them in a 90s style economy.

Blurred Lines

So many of us do it all at work.

We are in charge of executing strategy and managing people, all while achieving our quotas and performance goals.

I call us the “manager-doers.”

It didn’t always used to be this way.

Mangers used to manage. Doers used to do.

Then business evolved. Lines got blurred.

Now, we’re at a tipping point – both manager-doers and employers.

MBAs Out, Manager-Doers In

During the industrial revolution, straightforward hierarchical structures were used to grow and scale manufacturing businesses.  

There were leaders, managers, and workers. Job duties were clear. Lines weren’t crossed.

The pathway to management was also clear: an MBA was your ticket.

It all worked pretty well (with union support) until we shifted to a service economy.

The rise of technology in the 60s increased the need for highly skilled white-collar work. Responsibilities initially stayed siloed, but eventually demand for these workers outpaced supply.

Companies had no choice but to promote from within. MBA applications declined¹. Doors opened for many.

Doers were becoming managers. Then organizations got leaner and learned to do more with less post-financial crisis.

Not all that rose to the top possessed management skills or received necessary training to acquire those skills².

Managers were “doing” more. Partly because the job required it. Partly because that’s what they knew.  

Technology continued to advance, and the pandemic accelerated things. New jobs, industries, tools and competition have arrived. Labor shortages are once again commonplace.

Which brings me back to the 90s…

90s Remix - Layoff Style

Even with labor shortages, the 90s were one of the best decades for economic growth. 

• The expansion was the longest on record at the time.

• Unemployment was the lowest since the 70s.

• Technology and the internet improved productivity.

• People were buying services over goods.

• Experiences were all the rage.

Yet not everyone in the mid-90s was popping champagne.

A general sense of job insecurity was elevated given the rise of corporate restructurings to prepare for shifts in technology.

That led to increased layoffs for highly skilled, highly paid workers over the age of 35. In contrast, there were significantly less layoffs of employees with tenure of less than 15 years³.

Compare that to today:

• 75% of Americans are concerned about job losses⁴.

• Record CEO departures in 2023⁵.

• Manager-doers as current layoff targets⁶.

•  3.7% unemployment (near pre-pandemic lows)⁷.

• An AI revolution is underway.

Where Do We Go From Here - Shuffling Seats

The recovery for laid off workers will require a shift in thinking. 🙂 

Nearly everyone under the age of 55 that lost their jobs in the mid-90s returned to the workforce by 1998⁸ .

Though more than half switched industries⁸ . Hiring in the service industry was rocking and rolling. Construction and transportation hiring also picked up.

As for compensation, 55% of those aged 35-54 were able to make the same or more than prior to layoff⁸ .

There was a higher proportion of the group with part-time jobs or self-employed. Temporary work for the highly skilled was plentiful as companies adjusted to the new world.

And we already know holding more than one job was all the rage.

It was a bit of a transition for many, but because of the technological developments, the job market was hot in the 90s. People had options.

Bottom Line

Work is changing.

It’s unsettling, but just remember:

You may not be in control of what happens around you.

But, you are in control of how you respond.

Let’s make The Shift!

Lindsey

P.S. I’d love it if you’d share this with 1 other person who you think would be interested by the topic. Thanks a million! 🙏

P.P.S. If you want a breakdown of the industries that hired the most in the 90s, respond to this email with the word HIRING.

Sources:

1. New York Times.

2. West Monroe.

3. Federal Reserve Bank of San Francisco.

4. Morning Consult.

5. Challenger, Gray and Christmas.

6. Bloomberg.

7. Bureau of Labor Statistics, as of January 2024.

8. Bureau of Labor Statistics, Monthly Labor review, July 1999.