Sam Altman’s OpenAI firing—and reinstatement—challenges a common misconception about performance metrics

It took less than five days for Sam Altman to be fired from, and then reinstated as, OpenAI’s CEO. While our heads are still spinning from the fiasco that ensued on Friday, one key lesson that’s emerged as the dust settles is that when it comes to talent, you may not know what you’re missing until it’s gone.

Negotiations over Altman’s return to OpenAI resumed on Tuesday, and the eventual decision to bring him back suggests the board had second thoughts about its controversial and opaque decision to can the CEO last week. 

But OpenAI isn’t the only tech company that’s attempted to walk back recent employee departures: Social media platform X (formerly Twitter), Salesforce, and Meta have all sought to rehire workers after laying them off over the past 18 months. The phenomenon challenges the common misconception that performance is a factor in choosing which workers to lay off.

“If companies can mistakenly fire or lay off really high-profile employees, then certainly, they’re not assessing performance when conducting mass layoffs,” Bonnie Dilber, a recruiting expert, wrote on LinkedIn earlier this week.

That’s particularly troubling when considering that hiring managers and recruiters are often biased against candidates who lost their jobs or were laid off. An Indeed study from 2021 found that 70% of individuals in hiring roles believe an unemployed candidate would be less productive, and 83% of employers agree that it’s easier to find a job if one already has a job.

Unfortunately for said hiring managers, it’s far more difficult today to find candidates unscathed by layoffs, given that more than 183,000 workers at U.S. Tech companies have been laid off so far this year, in addition to more than 93,000 tech workers in all of 2022.

“There have been so many layoffs, particularly in tech, in the last 18 months that you can’t hold that against somebody. You can’t assume it was performance-based because we know in so many of these cases it was not,” says Tom Wilson, a managing director at consulting firm Gallagher’s executive search practice. “Companies had to cut costs. They had to do it quickly, in their view, so they cut costs quickly. But that isn’t a reflection of somebody’s performance.”

Altman’s case exemplifies this at the highest level of the corporate structure and also speaks to the need for success metrics that are well-defined before performance evaluations.

“I think it’s just a reminder that people who have done exceptional things, who are exceptional talents, that other companies will fight for [them],” Dilber tells me. “I mean, clearly, Microsoft did not waste one second going and snapping up Sam Altman and Greg Brockman. The reality is those are still great talents, even if it didn’t work out in one specific context.”

Paige McGlauflin
[email protected]
@paidion

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Speaking of OpenAI, Emmett Shear, the organization’s former interim CEO, recently made bold predictions that AI will inevitably replace the CEO role, especially tasks related to communication, problem and opportunity detection, talent identification, and providing constructive feedback.

“Of course that means you can’t really truly ‘replace’ the CEO, but I think we will see management get widely automated, leading to flatter and more dynamic organizations,” Shear wrote on X.

Around the Table

A round-up of the most important HR headlines.

- Amazon is offering online classes in advanced AI skills in an attempt to equip two million workers with generative AI aptitude by 2025. The free classes are open to both beginners and experts in tech or near-tech fields. Wall Street Journal

- CEO Jack Dorsey told employees at San Francisco-based financial services company Block that he would substitute annual performance reviews for constant evaluations that allow managers to fire inadequate employees immediately. Business Insider

- A Citigroup managing director filed a lawsuit against the bank alleging it tolerates a workplace culture where women are ranked by physical appearance and denied career development opportunities. Bloomberg

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