Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.
Fairchild Semiconductor in its declining days was a frightening place to be.
“It seemed like every other Friday somewhere in Fairchild there were layoffs,” recounts John East, CEO of Actel whose first job was at Fairchild, “everyone would go straight to the cafeteria Friday mornings. No one even bothered going to their desk. Everybody was scared to death. Everybody needed their job and knew that there was a very good chance that they would lose it in the next 15 minutes. Lots of gallows humor. Lots of camaraderie. Everybody loved everybody else. There are no atheists in foxholes.”
1. The Paging System Lay-off.
“There was a paging system in the building,” recalls East, “around 9am the paging system would crank up. ‘Bob Martin 2867′. Everybody knew what that meant. Bob Martin (who was a real person and a really delightful guy knew what it meant too. Bob would stand up and start shaking hands. After he said goodbye to everyone, he’d walk over to the phone and call 2867. 2867 was, of course, the HR department (Called “personnel” in those days). ‘Bob, this is Bill, can you drop by to see me?’ That would be the last that anyone would ever see or hear of Bob Martin.”
2. The Locked Door Layoff
“This one never made much sense to me,” says East, “but Hoefler (Don Hoefler ex-Fairchild publisher of the industry newsletter which coined the term Silicon Valley) swore it happened.
There was great fear in those days that company secrets would be stolen by people leaving the company (The Basic Data Handbook was the result of a lot of work that Fairchild rightly didn’t want to fall into the hands of the startups who were trying to eat Fairchild’s lunch).”
“According to Hoefler, if you were going to lay off someone in possession of a lot of key knowledge, then the way to do it was to have the facilities department change the lock on the victim’s door at night. Then, when the victim arrived in the morning and found his key wouldn’t open the door, he’d go see his boss who would then lay him off. That way he had no pre-warning and couldn’t sneak the key information out before the axe fell.”
3. The Retroactive Layoff
“This happened if you were unlucky enough to be selected for downsizing when you were out on vacation,” remembers East, “when the victim returned he was informed that he had been laid off and that there was good news and bad news:
‘The good news is we gave you two weeks of severance pay. ‘The bad news is you were laid off two weeks ago’.”
After Les Hogan was replaced as CEO by Wilf Corrigan, an even more bizarre method of sacking people was introduced.
“Each operation had a regular P&L review with Wilf Corrigan, Wilf’s top financial guy, and a few people from the operation being reviewed,” recalls East, “I can’t remember if it was monthly or quarterly. In my case, I worked in Digital Integrated Circuits (DIC) which was run by a guy named John Sussenburger.”
“Wilf had put in a rule that at each review a different young, upcoming employee should come to get some seasoning. My turn in the barrel came. I was scared to death of all top level executives at Fairchild but particularly of Wilf Corrigan.”
“I went to the conference room at least 20 minutes before the start time. There was a large potted plant at the back of the conference room. I figured out that one of the chairs in the back was partially hidden from view by that potted plant. Naturally I took that chair. Then I waited.”
“After a while the real attendees came filing in and the meeting began. Wilf Corrigan is astute! There is no tricking Wilf with the numbers. They would put up very complex foils absolutely full of numbers and Wilf would immediately zero in on the number that made a difference.”
“He was very direct, but very polite. No screaming, shouting or table pounding even though DIC was losing money. Wilf very calmly went about getting an understanding of what was going on.”
“When all the data had been presented, John asked Wilf if he had any questions.”
“I thought, ‘Wow. This isn’t so bad. We’re losing money, but Wilf understands. Nobody got beaten up or fired. What was I worried about?’”
“Wilf said, ‘Yes. A couple of questions:
‘How much money did you say you were losing?’
‘Oh. We’re losing about a million dollars, Wilf.’
‘What does you average employee make?’
‘Gee I don’t know exactly, but I’ll guess about $20,000.’
‘Hmmm. That comes to 50 people, doesn’t it?”
‘Well, you could look at it that way, Wilf.’
‘I do look at it that way, John.’
‘OK. I don’t have any more questions, but John, I’m planning to do you a favour.’
‘What’s that, Wilf?’
‘Tonight I’m going by the hardware store on my way home. I’m going to buy one of those clicker/counters….. you know the little mechanical things with a button. Each time you hit the button with your thumb it ups the count by one.’
‘Great, Wilf, sounds good. …………….. what are you going to do with that?’
‘I’m going to go into your building Monday morning. I’m going to stand in the main hall. Each time someone walks by me I’m going to ask him if he works for John Sussenburger.’
‘And if he says Yes, I’m going to say “You’re fired” and click the button. When it gets to 50, you’ll be profitable. John, you’re really going to enjoy running a profitable business!’
“As a young manager,” says East, “what did I learn that stuck with me?”
“Stay out of the hall on Monday!”