The layoff playbook: How companies really choose who gets cut

A director's confession from both sides of the layoff table.

Last week, I heard again about another series of layoffs affecting the tech sector. This made me reflect on the last four years of my career, during which I’ve been the one drawing names on whiteboards, calculating severance packages, and yes… I've also walked out with my laptop bag after being "selected for workforce optimization."

But regardless of the side you are on, the process will always seem unfair and hard to digest.

From the leadership perspective, you have the weight and the burden of deciding whose career and life will be affected. It gets worse when you broaden the thinking to life, family, and their personal situations. And at many times, you will be just the messenger… no influence, no decision. Just the person with the task of joining a cold call, read a half backed script, and deal with all the shit.

Wearing the shoes of someone hearing the script is not easy as well. I dare to say it’s even worse. You feel angry. Frustration completely takes you. You doubt your journey. And smashing your computer at the wall or using sailor’s mouth do sound attactive.

The criteria and rationale behind it are never so clear. It’s the corporate Hunger Games. Yet, differently from the movie, the best player is not always the one who survive.

Today, we will discuss what really happens behind those closed doors, because the sanitized HR version you hear is complete bullshit.

Let’s dive in.

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Making people fit into a spreadsheet

Let’s tackle the elephant in the room: Layoffs start with a number, not performance data.

Picture this: The CFO enters a Zoom meeting and says, “Based on the yearly report and our ambitions, we need to cut costs in $1.5M in quarterly expenses.” Someone opens a calculator. Senior Software Engineer at $200K fully loaded? That’s one unit. Mid-level QA at $95K? That’s 0.5 units. And so on…

The math is cold and simple.

I literally saw a CTO using a spreadsheet to balance headcount like a budget reconciliation. “If we cut a SWE here, we can keep four juniors there.” “We don’t need two seniors in this project, it’s not very complex, and easy to hand over.” People became variables in the equation, where the only constant was a number.

My most vivid memory: a last-minute trip to the company’s HQ in a different country. The agenda was confidential. Not enough time for planning. I got the Slack message in the morning, and the flight tickets by noon. My flight was scheduled to depart in less than 24 hours.

I knew something was wrong.

At 9 a.m. sharp, the meeting room was full. Most Senior Directors and Directors of our cluster were present, except for one. My VP calmly entered the room with a block of coloured post-its and a mug of coffee. He was holding a bread in his mouth.

“Thank you for being here. And if you are here, it’s a good sign.” What a stupid joke. But it was enough to understand what was coming next.

He spent the next 20 minutes sharing a polished speech around the vision of “restructuring” our organization, while preparing some kind of template on the whiteboard. Three post-its set the tone, clearly creating three columns. One red. One yellow. One green. Each of us got a pile of blank post-its to write the names of our direct and skip reports. We pinned them in a bigger area on the whiteboard.

At some moment, it felt like an auction. Here is the name, here is the value. But instead of who offers more, the vibe was all around who costs more.

"Sarah's expensive, but she's the only one who knows the payment system," he muttered, highlighting her name in yellow; the "maybe" pile. The guy who'd been leading our intern mentorship program for the last three years went straight to the red column. His salary was too high, and "mentoring isn't a measurable impact."

He selected one Post-it with a name, consulted a spreadsheet with 15-ish columns for additional data, and moved it to one of those columns. No additional input. Nothing. One after one.

And from all the data we had in the spreadsheet, just a few were handful: employee name, gross salary, company cost, and team.

As we were informed about the names from the red pile, an additional spreadsheet was filled out with the numerical information. It had a donut and a bar graphic to track the costs quarter by quarter and a foresee of “saved” expenses. The document was shared on a big TV we had in the room. We could follow at first hand the update from red to green as we fed it with the amount saved from the selected people.

We just stopped when the graph was green and the spreadsheet was ready for the HR team.

The real selection criteria

But what was really interesting to observe was the fact that we have never discussed performance or employee history, or impact properly.

We ended up with a list containing key people for ongoing projects. Key decision makers for pending matters. Years and years of a successful track record. Great performers. Great managers. An amazing intellectual asset for the company and the product.

But it was pointless.

After chatting with many senior leaders and from my past experiences, these are usually the first-class criteria to select who gets cut:

• Salary optimization comes first, period. As higher your salary is, as more mathematically attractive to cut your’re compared to a lower salary, even if you are a top performer.

• Visa sponsorship is a silent killer. While companies love issuing visa sponsorship requirements, they bring additional costs to the company. It’s less bureaucratic to create a target for immigrant folks rather than dealing with the visa transfer and relocation paperwork.

• Project scope and success. If you are working on a project that got deprioritized or is facing constant delays, watch out! No matter how well executed it might look, this is a common red flag, and things might turn bad in the case of layoffs.

• Management comfort level is the hidden variable nobody likes to talk about. Yes, bias. Managers protect people they like, people who make their lives easier, people who don't challenge them. The squeaky wheel doesn't get the grease; it gets the axe.

And if somehow we ended up in a rabbit hole to make a decision, then performance would take place. But only then.

The performance review theater

Firing a great performer is tough, and it requires guts.

But guts are not always enough. Some countries demand a legitimate reason for the termination. Unions get on top of the matter, and things can become very ugly if companies ignore such bureaucracies.

And when we discuss terminating a great performer for the sake of the company rebalancing, it’s not that easy.

Some companies will push the boundaries of ethics. No right or wrong. They need to make the number work, no matter the cost or the action. What’s the best way to justify terminating someone? If you thought performance issues, you can give yourself a pat on the back.

I watched managers retroactively adjust performance ratings to match layoff decisions. The review process becomes a post-hoc rationalization exercise. Legal needs documentation, so documentation gets manufactured.

The most grotesque example I witnessed: an engineer who'd been rated "exceeds expectations" six months earlier suddenly had his review amended to "meets expectations" with new comments about "areas for growth." When he was cut, HR pointed to this "performance decline" as justification. The manager who did this looked me in the eye afterward and said, "We had to make it clean for legal."

I truly hope this was an isolated case and not something common. I’ve never heard about it outside of my circle or personal journey. Yet, I wouldn’t be surprised…

The corporate shit-show

Companies have turned layoffs into a choreographed performance.

The all-hands meeting with the CEO looking somber. The "difficult but necessary decision" language. The "we're not just cutting costs, we're positioning for the future" narrative. The multiple fancy ways to find a polite word to describe the process.

My preferred one is the deep appreciation and recognition for those who left. Not mentioning the “we will do our best to help them find their next challenge.”

It's all rehearsed.

I've been in the prep meetings where executives practice their delivery, wordsmith the messaging, and game out the Q&A responses. They're not processing difficult emotions. They're running a communications campaign.

No matter what, the explanation is always conveniently aligned with whoever survived the cut.

Nowadays, we can all “blame” AI. From ten people you ask the reason they heard as the cause for layoffs, I bet with you that at least six will mention words like “AI,” “investment,” “the market is changing.”

The aftermatch nobody talks about

The psychological damage goes beyond the people who got cut.

The survivors carry trauma, too. They know the criteria now. They see how arbitrary it was. They understand their own vulnerability.

Team dynamics implode. The remaining engineers who watched their mentor get cut while a junior stayed because of salary optimization? They're not motivated. People become paranoid.

Velocity is now calculated based on how many CV versions and applications you can send in one sprint.

Every standup became a reminder of who wasn't there. Every code review became a memory of the person who used to catch those edge cases. The team chat that used to buzz with technical discussions went silent. We all knew we could be next; it was just a matter of when the math would catch up to us.

Your mind races. Every Slack message becomes torture. Every meeting without an agenda makes your heart beat faster.

Layoff anxiety for those who survive is a real shit.

Final thought

Layoffs are not a failure of the system. They ARE the system.

Every colored post-it on that whiteboard, every retroactively adjusted performance review, every survivor who now updates their resume during lunch breaks… this is all working exactly as intended.

Companies have weaponized uncertainty.

They've turned job security into a luxury good that only the strategically positioned can afford.

The most insidious part isn't the cuts themselves. It's how they've normalized the anxiety. We've accepted that career progression means navigating around arbitrary mathematical exercises disguised as business strategy. We've internalized that being "expensive" is a professional liability, that asking hard questions makes you "difficult," that expertise can become a burden overnight.

But here's the twist: understanding the game doesn't mean you have to play by their rules.

Know your real value beyond the spreadsheet. Build relationships that transcend org charts. Document your impact in ways that survive budget cycles. And most importantly, never mistake your professional worth for your human worth, because the people making these decisions certainly have.

The layoff playbook will keep running. The question is whether you'll let it run you.

– Rapha