Lincoln Electric the land of no layoffs

Lincoln Electric the land of no layoffs

How Lincoln Electric Avoided Layoffs for Over 70 Years

Lincoln Electric

Layoffs have become an unfortunate reality for many employees in corporate America. However, one company has managed to defy this trend for over 70 years. Lincoln Electric, one of the world’s largest producers of welding equipment and supplies, has avoided layoffs despite economic ups and downs, including the turbulent periods of the early 1980s, the stock market crash of 2000-2001, and the Great Financial Crisis of 2008-2009.

According to Fortune magazine’s Geoff Colvin, Lincoln Electric CEO Christopher Mapes attributes this remarkable feat to the company’s unique management philosophy, which guides them through financial challenges.

At the core of Lincoln Electric’s approach is a program known internally as “the program.” This system is radical yet deceptively simple. Production employees at Lincoln Electric agree to let the company adjust their standard 40-hour workweek based on customer demand, increasing or decreasing hours within certain limits. Instead of being paid an hourly wage, employees are compensated based on piecework, incentivizing productivity and quality. Additionally, workers receive a year-end bonus reflecting their individual performance. In return, Lincoln Electric pledges not to lay off employees due to a lack of business.

This system has not only helped Lincoln Electric navigate economic downturns without resorting to layoffs but has also created a culture of accountability and productivity among its workforce. The program’s success has attracted the attention of other CEOs who are interested in implementing a similar approach within their organizations.

However, Mapes cautions that adopting the Lincoln Electric system solely for the purpose of increasing productivity may not be enough for long-term success. The program requires a foundational understanding of the company’s values and a commitment to maintaining a supportive and inclusive work environment.

In a world where soft skills are becoming increasingly important for success in the workplace, Lincoln Electric’s approach serves as a reminder that fostering a positive and collaborative company culture can lead to long-term success. While technical skills may be essential, interpersonal skills such as effective communication, teamwork, and social interactions are equally crucial.

According to leaders interviewed by Fast Company, Gen Z employees struggle more with workplace soft skills than hard skills. The ability to have meaningful conversations, make eye contact, introduce themselves, or eat at a table with multiple people are examples of the social behaviors that are becoming increasingly important in society.

In addition to the insights from Lincoln Electric’s management philosophy, here are some other important updates from the world of HR:

Around the Table

  • A former senior director in Salesforce’s diversity unit is suing the company for racial discrimination, claiming different promotion standards for non-white employees compared to their white counterparts (Insider).
  • Diversity, equity, and inclusion (DEI) positions in companies are facing uncertainty two years after the murder of George Floyd. Thousands of companies, including Disney and Netflix, have parted ways with diversity executives (Wall Street Journal).
  • Research shows that incorporating elements of nature in the workplace improves employee sentiment, boosts creativity, and enhances task performance (Harvard Business Review).
  • Despite record-high temperatures, OSHA-sanctioned standards for managing heat in the workplace might not be implemented anytime soon (CNN).


In other news, Fortune has gathered some interesting stories worth discussing:

  • Strategy consulting group Bain & Company predicts that by 2030, there will be 150 million more workers above the age of 55, attributed to fewer young individuals in the workforce, longer lifespans, high costs of living, and a desire to combat boredom (Chloe Berger).
  • Amazon has announced that some employees will be required to work at least three days a week in-person starting in May 2024. This policy change may require employees who relocated during the pandemic to move closer to the company’s Seattle office (Spencer Soper, Bloomberg).
  • The remote work boom has left many office buildings vacant, leading to the potential repurposing of these spaces into mid-block parks, according to Barry Sternlicht, the CEO of real estate investment firm Starwood Capital Group (Will Daniel).

Lincoln Electric’s long-standing commitment to its employees, coupled with their unique management system, serves as an inspiring example for other organizations seeking to navigate economic challenges while maintaining a dedicated and motivated workforce. By prioritizing both hard and soft skills, companies can create an environment that fosters success and resilience.