How to diagnose your job security

Vitamins get laid off; aspirins keep their jobs. Get closer to revenue or your core product to make yourself indispensable.

👋 Hi, it’s Greg and Taylor. Welcome to our newsletter on how to make high-stakes professional and personal decisions in your 30s.

660,000 tech workers were laid off in the last three years – and 21% of them were in software engineering.

At face value, this is weird. Engineers are supposed to be immune to layoffs. 

But if you look at layoff message boards, the affected roles weren’t core engineers. They were UX/UI researchers, dev-ops, data science, tech writers, and QA. AKA, people who work in the same department as product and engineering, but are further away from the product roadmap. 

These roles are “vitamins.” And when layoffs happen, they’re usually the first impacted.

Vitamin vs. aspirin is a common way for investors to talk about companies. Aspirins are must-have solutions that solve an acute pain for the business – vitamins are nice-to-haves. Venture capitalists want to invest in aspirin companies, because they don’t get cut when customer budgets do.

Jobs are the same way. Your job is either an “aspirin” or a “vitamin” to your business. And it all depends on how close you are to the money — generating revenue for a core product or service. You need to know which one you are.

– Greg

Why high performers get laid off

When companies are faced with layoffs, they usually start with under-performers. But after that, it gets tougher. 

Most high performers see their jobs cut for one of two reasons: 

1. Their function, department, or role isn’t close enough to revenue. They work in HR, video production, technical writing, etc. – roles that are cost centers rather than revenue drivers. It’s harder to draw a straight line from their role to how the business makes money.

2. They work in a usually-protected role (e.g., sales, engineering), but their product or initiative isn’t driving revenue. They’re an account manager on a customer who’s churning, or a PM on a product that’s getting shut down.

When we did layoffs at Section, we looked at both types of roles. For example, we cut deeply on our creative team. We had a world class animation team, but it was difficult to tie animation to revenue generation. The department was a cost center. We also cut some enterprise sales positions – roles that could drive revenue, but weren’t because of poor customer fit with enterprise.

So: How far are you from revenue? 

In a post-ZIRP world, CFOs are running companies, and CFOs care (almost exclusively) about operating margins. 

Let’s be clear, “vitamin” jobs are incredibly important. Great companies run on more than just revenue generation. But when budget cuts are on the table, the CFO asks, “What can we live without?” The company can’t survive without revenue. It can survive with over-extended  project management and no new employee training (we know this - we sell upskilling to companies!).

To assess whether you’re in a vitamin or aspirin job, you need to track how close you are to revenue. You should do this in two dimensions.

1.  Assess how close your specific role or function (product, operations, marketing, sales) is to generating revenue. Think about how your company makes money. If you’re like most companies, you probably attract B2B or B2C leads, convert them to customers, then renew or retain them. Money-making functions are directly responsible for these metrics (leads, conversion, retention, renewal). 

You should do the same within your function – not all marketing or product roles are the same. For example, in marketing, growth and acquisition roles are closest to the revenue (companies cannot survive without leads). Lifecycle marketing and product marketing are slightly further away – companies can survive without these roles, but sales and retention will likely clearly suffer. Content, brand, and PR are furthest away from revenue. 

That’s not to say these jobs aren’t important – they are. But, it’s harder to demonstrate that without PR, sales will directly decrease. Which makes the role more vulnerable.

Here’s a rough guide to where different jobs typically fall on the continuum.

2. Assess how critical the products, initiatives, or markets you work on are to the company’s revenue. You want to work on products, initiatives, or markets that are mission critical – in other words, they’re a large driver of business and/or they’re growing. It would be hard for the company to survive without them.

To assess this, ask these questions about your product, business line, or market. 

• What % of revenue does this drive for the company? 

• How quickly is the revenue for this product/market/business growing?

• Is it profitable? 

• How quickly can we demonstrate results (i.e., are we poised to contribute revenue this year, or is the project a moonshot that could take 2-3 years to pay out)? 

Again, that doesn’t mean there’s no place for moonshots (every CEO has their pet projects) or experimental initiatives. But when faced with budget cuts, jobs that support these initiatives are vulnerable.

After you ask these two questions, plot yourself on this matrix.

Uh oh, I’m a vitamin – what do I do?

First, don’t panic. 

Some jobs are just vitamin jobs – in fact, some of the best jobs are (think strategic planning, creative services, and customer insights). You shouldn’t upend your career because you’re in one. However, there are three things you can do.

1. Try to move up on the grid. If you’re in a department that’s close to revenue, you want to be even closer – e.g., moving from a comms role on the marketing team to a lead generation role. If you’re in a department that doesn’t clearly result in revenue, you want to support products, business lines, or markets that do.

2. Be the best performer in your department. Rockstars are the last to get laid off. If you’re in HR, be the best damn person in HR. When they need to cut the team to two people, you’ll be one of the two. And if your entire department gets laid off, you’ll be the first that leaders want to support and recommend for new roles (inside or outside the company).

3. Look for companies that value your type of vitamin. Consulting firms value strategists, CPG firms value brand managers, data platforms value customer insights. Look for companies that have productized your job – while it’s a vitamin inside some companies, it’s aspirin inside these organizations.

Our advice

Remember: being a vitamin doesn’t mean your role isn’t important or doesn’t have an impact. It just means it’s harder for you to draw a straight line from your role to making money, and unfortunately, businesses care most about making money. 

You can’t account for every scenario – at Section, we cut most of an extremely talented, 30-person creative design team. The state of the business demanded it, and there was little they could have done to prevent that.

But you don’t want to be blindsided. It’s easy to think the business can’t live without your role. But if you don’t contribute revenue and they need to expand margins by cutting costs, they’ll do it anyway … even though it sucks to have shitty HR, customer service, UX/UI, brand management, etc. 

And if you do get laid off, remember – it’ll be okay. Take a breath, shake it off, and re-position yourself for the future. Use the grid above to target your job search, and find a role, line of business, or company where you can be an aspirin. 

To the next 10 years,
Greg & Taylor