Why top firms fire good workers

Scope of the Research vs. HN’s Interpretation

• Several commenters stress the paper is about elite professional service firms (Big Four, top consultancies, elite law), not generic “top firms” or tech companies.
• The model depends on selling specific employees’ time to clients and visible, attributable individual performance.
• Many in the thread still react as if it’s about tech layoffs, stack ranking, or general corporate behavior, leading to calls that the title is misleading.

Up-or-Out, Margins, and Reputation Dynamics

• Summarized model: early on, firms know more about workers’ abilities than clients do; over time, worker performance becomes visible to the market, eroding that information advantage.
• As compensation rises but billable rates cap out, high performers become less profitable for the firm but more valuable on the open market; firms push them “out” or underpay them.
• Some describe this as rational margin optimization; others as a thin justification for churn and exploitation.

Politics, Management Failure, and Perverse Incentives

• Many argue “why good workers get fired” is mostly politics and bad management:
  • Managers protect themselves in layoffs (e.g., firing the best to avoid being replaced).
  • Self-promotion and “managing up” beat actual performance; reorgs and headcount targets drive exits.
  • Managers often lack domain knowledge, can’t distinguish high performers from slackers, and default to mediocrity.
• Some say in large firms nobody is really watching performance; rewards flow via relationships, not output.

Consulting Firms and Sales-Driven Careers

• In consulting, strong performers either:
  • Move into sales/relationship roles (path to partner is “sell hours”), or
  • Move client-side into senior roles that later buy from their old firm.
• Others cite alternate systems (e.g., variants of “Cravath”) where only the very best are kept as partners and the rest are gently pushed to clients, preserving long-term deal flow.

Ethics, Capitalism, and Unions Debate

• Some see the described system as psychopathic “corpo-speak” that reframes ruthless turnover as an “efficient mechanism.”
• Others emphasize that capitalism optimizes profit margin, not absolute work quality; “good and cheap” beats “great and expensive.”
• A quoted passage about firms threatening remaining employees with reputational harm to force below-market wages sparks an extensive union debate:
  • Pro-union side: this is exactly the power imbalance unions exist to counter.
  • Anti-union side: unions add bureaucracy, can be corrupt, limit flexibility, and might reduce high-end tech pay; examples from multiple countries are cited on both sides.

Country- and Culture-Specific Anecdotes

• Indian commenters describe nepotism, regional loyalty, and “credit-stealing” managers, claiming good people are often sidelined or PIPed once they become threatening.
• Others counter with descriptions of formal PIP and ombudsman processes intended to protect against abuse.
• One view from German industry: long-term employment is valued, but unions may prioritize less-skilled workers’ interests over engineers’, sometimes even supporting outsourcing of engineering.

Skepticism of the Article Itself

• Some say the piece reads like a justification for stack ranking and churn, or like an AI-generated HR brief for a board.
• Others acknowledge it as an interesting, if somewhat obvious, formalization of dynamics they’ve seen in professional services.