Career Expert Shares The Awful Truth About Why Companies Lay People Off Right Before Christmas
The reason is truly worthy of Scrooge himself.
glenda / Shutterstock Christmas is supposed to be a time of joy and cheer. Unfortunately, some people may find themselves feeling much less merry due to dreaded holiday season layoffs.
While layoffs around Christmas may appear random, one career expert shared that they are anything but.
A career expert explained why companies really lay people off right before the holidays.
In a recent TikTok video, someone posed an interesting question: “Why are companies laying people off a week or two before Christmas?” Career expert Farah Sharghi had the answer.
According to Sharghi, “The CEOs are greedy and they want to get their own bonus payout.”
Sharghi elaborated further and said, “When CEOs lay people off, they cut off how much money they have to spend on salaries, and the severance payout that they give to these people, they’re going to use it as a tax write-off for that year. So, now that they’re not spending money, it looks like they’ve earned money, even though they haven’t earned any money, they just laid people off.”
In other words, laying people off makes it look like a company has made money. In reality, no new money was brought in. But, because it looks that way, CEOs can demonstrate profitability and pat themselves on the back.
“They can go, ‘Oh, look at all this money we made,’ when in fact, they just, you know, laid people off to make it look like they actually made more money than they did,” Sharghi said.
Furthermore, CEOs have more ways to make money than the average person, all of which benefit from laying people off.
“CEOs don’t get paid like us normies. Yes, they get a salary, but they also get a ridiculous cash bonus, and they get stock in the company,” Sharghi stated. “So, if the company performs well, then the stock price will go up.”
Basically, it all comes down to one thing. “The CEO lays people off [and] artificially inflates the value of the company,” Sharghi said. “Then when next year rolls around, they talk about how well the company did. So then, the CEO is then rewarded with a fat cash bonus, then the shares that they got, or the shares that they have go up in value, and then they’ll probably get even more shares.”
The truth is that CEOs laying people off during the holiday season likely has little to do with employee performance and everything to do with CEOs making more money for themselves.
Sharghi certainly has the expertise to back up what she’s saying.
With 128,000 followers on TikTok and over 15,000 followers on LinkedIn, Sharghi is considered one of the leading voices in her industry.
After a successful career working for companies like Google, Uber, and the New York Times, Sharghi now works as a career coach, helping others land their dream jobs through interview advice and salary negotiating tips. She has learned firsthand from the impressive positions she has held.
In this case, knowing that Sharghi knows her stuff may not be very comforting. It’s certainly not good news to hear that CEOs lay people off simply to increase the number on their own paychecks.
In a move truly worthy of Scrooge himself, CEOs are putting themselves first and fattening their own pockets while their employees struggle, and even suffer. But there is always hope.
The New Year is about fresh starts, and for many, that could mean a new job. Getting laid off means the cushion of unemployment and, according to experts, the increased potential for finding a new job.
Mary-Faith Martinez is a writer for YourTango who covers entertainment, news and, human interest topics.