Comment by stego-tech

This is one of the biggest consequences of layoffs in corporations. There's this misconception that everything can and is "objectively" quantified, and thus layoffs targeting otherwise well-performing individuals are being done because this will quantifiably save the institution money and resources. Then something inevitably happens where someone they previously let go could've saved the cost of their employment and then some in damages, but the company is often too blind to realize this.

Thing is, I've seen this time and time again. A lot of us have, I suspect, seen this story repeatedly in our own current or prior organizations. Someone who worked for the company for a decade, or who had intricate knowledge of prior M&As, technology stacks, codebases, customers, and/or processes who was thrown out as a line on a spreadsheet.

I do my best to buck the trend in my work by documenting everything (the "bus problem", as I call it) I can and sharing it with my colleagues, but the continuous churn of M&As and software deprecation means that documentation is often discarded with old systems rather than reviewed and preserved, thus further erasing any lingering institutional memory.

To be fair, this issue isn't likely to kill a company outright on its own. Sure, it could lead to a serious problem and cost gobs of money, but it rarely kills a company or project outright in the process. Still, it's preventable harm just by keeping some additional persons around for knowledge or managing an organizational library of content. It's ultimately such a minor cost in the grand scheme of things that shareholders won't really care. $1m a year for a corporate library and a handful of staff to support it is peanuts on a multi-billion dollar enterprise balance sheet, and will almost certainly improve outcomes across the organization as a whole.

Or to put it far more simply: institutional memory is the fat on an animal. Cutting fat down to the bone leaves the animal weaker and vulnerable as a result, as it has no emergency stores of energy (or in this case, knowledge) to pull from and thus must cannibalize itself in times of crisis.