Attrition

Someone leaving a company and a company getting smaller are two different events. For a long time there was no reason to separate them. When one person left, the default was to hire a replacement, so a resignation changed who sat in a seat but never how many seats there were.

Money gets tight and a third option appears: leave the seat empty. From that point on, a resignation stops being a swap and becomes a reduction. The trouble was that the only word for a reduction was layoff — the company cutting people for business reasons, on its own initiative and its own timetable.

So leadership meetings kept going sideways. Grace would say the company needed to be at 40 people within six months, and everyone in the room immediately pictured a list of names. The actual plan was to let nobody go and simply stop refilling seats, but there was no single word for that, so it took three sentences every time.

Attrition fills that gap. Of the two ways a company loses people, it names only the side where the person made the decision.

Attrition takes two things happening together: a person leaves voluntarily, and the company decides not to refill the seat. Either one alone leaves the total unchanged.

In order, that's three steps.

1. Someone resigns on their own. People the company lets go do not count here — that belongs to a different word and a different process. This distinction is the starting point, and every number downstream depends on it.
2. The company decides whether to refill. Headcount — the number of positions an organization is approved to hold — stays where it is, hiring opens a search, and the total comes back to where it started.
3. If the decision is not to refill, the seat comes off the org chart and the company is one person smaller.

It works like closing the tap while leaving the drain open. Nothing is being pulled out faster than before; the inflow just stopped, and the level drops slowly but reliably, and it keeps dropping for as long as the tap stays shut.

The pace is not something the company sets. It belongs to the drain — to how fast people choose to leave. If eight people a year resign from a 45-person Pagedeck, six months buys about four seats. A target of twenty fewer people would take two and a half years to reach this way.

Which means the first thing to check, once this is the chosen route, is not the target number but how many people actually left in recent years. A company averaging four departures a year that plans to shed ten in six months has a plan that is already wrong on the day it starts.

The word turns up in three places.

1. As the alternative when the company needs to be smaller but wants to avoid a layoff. Cutting people for business reasons means required notice periods, a defined process, and a shaken group of survivors. Closing hiring and waiting sidesteps all of it.
2. In cash planning. Runway — how many months the cash lasts at the current spend — stretches as staff costs come down, and at an early-stage company payroll is more than half of what goes out the door. The effect arrives late, though. Someone leaving this month shows up in payroll starting next month.
3. In reading the health of the organization. Put the number next to retention, the work of getting people to stay, and next to what exit interviews turned up, and check whether the stated reasons cluster.

The first two are intentional attrition and the third is unintentional attrition. The reading runs in opposite directions, even though the word and the number are the same. When a company is shrinking on purpose, being slower than planned is the problem; when it is shrinking without a plan, the shrinking itself is the problem. Look only at the number and a quarter with hiring frozen looks identical to a quarter where people are walking out.

"We're pausing new hires this quarter and hitting our headcount target through attrition."

Nobody gets let go; the target gets met by leaving the seats of departing people empty and waiting.

"Attrition alone won't get us there in six months."

People are resigning more slowly than the reduction target requires, so a layoff has to go back on the table.

"Most of last year's decrease was attrition."

The company got smaller because people chose to leave, not because anyone was cut. It's the qualifier that gets attached when explaining the state of the company to an investor or a candidate.

At Pagedeck, Grace raises this at the quarterly leadership meeting. With less cash runway left than the plan assumed, she commits to going from 45 people to 40 within six months, and adds that nobody will be let go — departing seats simply stay open.

Four months in, two people have left. Three seats to go, two months left, and in the meantime the payments work Theo was carrying has nobody to take it, so Mia has had to redo the schedule before anything else. When Grace books the next meeting, the agenda is not the headcount but the target itself.

The most common reading is that this is the free option. No decision to let anyone go means no added payout, no announcement, no process, so it looks like it costs nothing. What actually drops out is the extra piece of severance; the rest of the cost stays. Every departure takes several days of offboarding — handing over work, pulling back access, closing accounts — and the work itself doesn't disappear, it gets split among the people still there. Leave that load in place and the people carrying it start leaving too, so a plan to lose five ends with eight gone, which is further than anyone meant to go.

The other mistake is assuming the company gets to choose who goes. Setting a target makes it feel steerable, but the person deciding to leave isn't the company. The ones who move first are usually the ones with somewhere to go, which is another way of saying the ones other companies want. Left alone, the count lands on 40 exactly as planned while the shape of those 40 is not the shape anyone wanted. Three people going from one team and none from another is a normal outcome, not a freak one.