Counter-take: There's also cultural improvement during layoffs, when you no longer have to interface with someone who doesn't want to do their job and/or is bad at it.
I've been through numerous rounds of layoffs, both of entire teams and of select individuals or roles, and it has never had a net positive effect on culture.
Large-scale layoffs very rarely (i.e. never) simply cut people that are "bad at [their jobs]."
It seems to depend on the company, but based on my observations the people who are first to go seem to correlate strongly with people, who management does not like. The remaining layoffs are a weird function of people, who know what they are doing and can't ingratiate themselves.
In my personal experience the first to go are the non management highest paid employees, the degree of competence doesn't matter. The really good ones go before the layoffs. The next layer of skilled employees leaves between the first and the second wave of layoffs. Eventually you get a company of drones with some management on top of them. Possibly a lot of management because sometimes they contract the same very people they laid out because they need the expertise but they want to transform capex to opex.
Totally disagree with both sentences. As I posted elsewhere, I've seen layoffs in a place I've worked as a way to finally get rid of subpar performers.
I've also seen cases (and this appears more relevant in ARM's case) where the company just hired way too fast. It wasn't that people who were laid off were necessarily bad, but there were just way too many people for the amount of work, and so in absence of clear purpose a lot of people would have tons of "make work" meetings that were really there just so they didn't feel totally useless.
I'm certainly not saying all layoffs are like this, but I do take issue with the idea that layoffs never have a net positive effect on culture.
No offense, but I think you are looking at "culture" through a pretty narrow lens (or just not talking about "culture" at all)...
Regardless of if you are "[hiring] way too fast" or "finally [getting] rid of subpar performers," layoffs are still, by definition, firing a bunch of people's coworkers. Simple work efficiency, which is what you'd theoretically be improving in both of your examples, has relatively little to do with company culture, so your examples aren't very compelling evidence.
The "bad" people will hold on as long as they can - partially because they won't have it as easy to find a new job, partially because they gamble on enough "high performers" leaving that they cannot be fired because otherwise everything would collapse.
Have you actually been at a company that has had massive layoffs?
I've been a few times and I recall losing lots of friends and valuable team members. Even management typically doesn't spread the ridiculous myth that they're laying off people "who doesn't want to do their job and/or is bad at it".
Layoffs are heart-breaking and I can't earnestly believe that someone who has been through them would have this "counter-take".
Worked at the largest stock market listed supermarket in the 90's which is one of the largest employers in the UK after the NHS. They banned all but essential recruitment and cut back on everything like payrises, capital replacements to maximise profits because they didnt know how the Socialist Labour Govt was going to be with taxation. As it happened the Govt introduced working tax credits so a wage top up for the lowest paid, paid for by higher earning workers and it meant these companies could keep wages suppressed so they could build up a war chest and expand overseas which ended disastrously in the US.
Theres more than one way to skin a cat as they say, so layoffs can be seen in a few different lights.
Edit. Just because a company is listed on the stock market, like govt's doesnt mean they are not fronts for criminal activity!
While I hear what you're saying, I doubt that's often the case. Either you have a company who either tolerated bad employees for a long time or just figured out they were bad at their job.
Neither points to a very healthy culture to start with.
