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Can being laid off really make you better off?

Would it surprise you to learn that survivors can suffer just as much, if not more, than colleagues who get laid off?
/ Source: Business Week

As the Great Recession continues to devour jobs at an alarming rate, tales are legion about the millions of unemployed struggling to right their lives and recover their self-esteem. But what happens to those left behind?

Would it surprise you to learn that survivors can suffer just as much, if not more, than colleagues who get laid off? It certainly surprised a team of academic researchers who embedded themselves at Boeing from 1996 to 2006, a tumultuous decade during which the company laid off tens of thousands. The results of the study will appear next year in a Yale University Press book called "Turbulence: Boeing and the State of American Workers and Managers."

"How much better off the laid-off were was stunning and shocking to us," says Sarah Moore, a University of Puget Sound industrial psychology professor who is one of the book's four authors. "So much of the literature talks about how dreadful unemployment is."

By early 1996 the researchers were busy interviewing and testing 3,500 Boeing employees — from line workers to senior executives. The timing was propitious. Struggling to adapt to new technology and competition from Europe's Airbus, Boeing in 1997 merged with McDonnell Douglas. Over the next six years, Boeing's workforce of 234,850 shrunk 33 percent, to 157,441.

With each round of layoffs, the survivors hustled to reinvent themselves. They re-proved, re-auditioned, and repositioned, only to watch yet another new manager — pushing the fad du jour — parade through the door. Employees who had once seen themselves in every plane that flew overhead were now trading in gallows humor. As in, "Dead worker walking."

Human resources specialist Frank Zemek was the researchers' main contact. In an interview, he recalled "the survivor's guilt of the people who were left, who were waiting and not knowing if the hatchet was going to fall on them. They experienced the worst stress."

As more manufacturing was outsourced, workers said they no longer felt as if they were building planes. They were simply snapping them together. They obsessed about the loss of institutional knowledge. Managers who had fired people, meanwhile, confessed deep, pervasive grief — what researchers sometimes call "executioner's lament." Moore says they tended to become emotionally numb and disengaged.

In the greatest surprise of all, the researchers discovered that the people who had been laid off often were happier than those left behind. Many had new jobs, even if they didn't always pay as well. Over and over, Moore says, average depression scores were nearly twice as great for those who stayed with Boeing vs. those who left. The laid-off were less likely to binge drink, often slept better, and had fewer chronic health problems.

The researchers say that thanks to the unceasing uncertainty inside Boeing, those who left felt as though they had escaped a bad marriage. At the time one Boeing employee told researchers: "You feel better when someone takes their foot off your neck."

Today morale has improved at Boeing, Moore says. Yes, the company's new jet, the 787, is behind schedule. But the high-tech plane has helped revive Boeing's esprit de corp. Since W. James McNerney Jr. became CEO in 2005, engagement scores — which measure worker spirits — have steadily risen, the company says.

And what of the original 3,500 research subjects? Only 525 still work at Boeing. Moore reports that many never regained their equilibrium. When they see her, they say: "Yeah, I still work for Boeing ... this week."