How One Company Navigated a Boom and Bust With No Mass Layoffs

One thing never swung up or down at Hologic: the size of its full-time workforce.  

Drawing a hard line on hiring that rankled some workers, Hologic has kept head count steady, at just under 7,000 employees, during a volatile stretch.  

It is a management philosophy that stands out amid a steady drumbeat of job cuts. Companies from Microsoft and Amazon to UPS and Citigroup have conducted large-scale layoffs over the past year. Many firms, particularly in tech, say they overhired when business was booming and that some of the jobs they are cutting won’t come back. 

Even before Covid, “we collectively had a philosophy that mass layoffs are a failure of leadership,” said Karleen Oberton, Hologic’s chief financial officer. 

That philosophy was fine-tuned during the pandemic as sales rose and then fell dramatically. Along with Covid tests, Hologic sells mammography machines, screening tests for sexually transmitted infections and cervical cancer, and other technologies focused on women’s health.  

At Marlborough, Mass.-based Hologic, managers are told to question the need for every new hire, redeploy positions to keep compensation budgets from growing, and find savings to offset staff additions.

When employees leave, positions aren’t necessarily backfilled. Instead, managers ask whether another part of the business needs the position more than the department losing it. And the company puts a tight focus on performance management, said Chief Executive Stephen MacMillan. 

“The simple question we ask everyone is, ‘OK, you want to add someone, what’s the least productive person on your team doing, and what if you instead replace the least productive person with this new person?’ Then it becomes headcount-neutral.”

Companies often use layoffs to compensate for a reluctance to let go of workers who aren’t hitting the mark, said Peter Cappelli, a management professor at the University of Pennsylvania’s Wharton School of Business. 

“Because they’re lazy about performance management, they see layoffs as a way to get rid of poor performers,” he said. 

The flip side of such extreme hiring discipline is it runs the risk of burning out existing staff. Some former employees have commented on the workplace review site Glassdoor that the company is understaffed and workers are spread thin. 

“There will always be people that feel they’re being asked to do more,” MacMillan said. “That raises two questions: Are they the best person for the job? Or do they have too much work? It can sound harsh but often your best performers keep stepping up and are willing to take on more.”

Hologic managed burnout risk during Covid in part by turning to a tried-and-true method for adding staff while preserving flexibility: It called in temporary workers at its San Diego plant for manufacturing, packing and receiving roles to help make and ship more than 1.5 million tests a week at the peak. When demand dropped, Hologic was able to let go of those contractors without laying off permanent workers.

Big bonuses played a part, too. Production staff typically receive year-end bonuses in the low four figures. But in December 2020, the 550-odd workers at its San Diego plant, where Covid tests were made, received bonuses that were 10 to 15 times higher than usual. MacMillan’s bonus that year was $3.3 million. Executives pulled some money out of the management bonus pool to cover part of the increase, MacMillan said.

For nonmanufacturing roles, Hologic was able to make do with current staff, partly by redeploying people from sales, marketing and other teams whose departments were seeing a drop in business as women put off procedures such as mammograms and annual gynecological exams, Oberton said.

The company also looked for savings and efficiency in its operations to hold hiring steady, such as cutting down on emergency calls by using data analysis to predict when its customers would need maintenance calls for their Hologic equipment.

Avoiding large-scale layoffs has multiple benefits, many of them difficult to quantify, Cappelli said. “When you have layoffs, everything stops,” he said, as workers spend their time hunting for work and worrying about their job security.

The workforce does grow and shrink year to year, but that’s largely a result of acquisitions and sales of business units. And the company is adding people where it feels it needs to invest, MacMillan said. 

For example, with generative AI, “we go in small with a couple of experts and then trust them to help build it out,” he said. “We’re hiring people all the time both as replacements and into newer or expanding areas. I just think we’re doing it with a far more rigorous lens to it.”

Meanwhile, Hologic is sitting on a pile of cash and equivalents that totaled $1.9 billion at the end of December 2023, with plans to use some of that money for acquisitions and to continue an aggressive path of share buybacks.

Write to Lauren Weber at Lauren.Weber@wsj.com