Article #73 : The Great Layoff

Two years ago, it was The Great Resignation and unfortunately, now it is The Great Layoff. Companies which once promised work-life balance are giving out pink slips. Jobs which once advertise cutting-edge workspaces are laying off workers like there's no tomorrow. What happened to these Tech Giants? Is the Tech bubble in the process of bursting out? Is your job safe? Well, let’s find out in our article today.  

Today let’s look at what's happening around us. People are being fired left, right and Center. 

Every year millions of graduates dream of a high-paid job in the rainbow world of tech. Has that dream turned into ashes? Are these the same companies that rush to your college campus for placements? For two decades now most of these companies have defined aspiration and ambition. Professionals want these logos on their CVS. It does not matter if you are an engineer, a human resource professional or a consultant, they want to work for the Metas and the Amazons of the world. Working for Google means you have arrived but today the same Google is firing its employees. The companies that were once the top hirers and the biggest pay masters have lost the bandwidth to retain employees. The same employer who onboarded you promising a shining future, the same employer who asked you for 100% efforts and you gave that who sent you on workshops so that he could extract the most from your skills who knew how to exploit you fully has now suddenly shut the door on your face leaving you broke and heartbroken. Your access card does not work anymore, you have been logged out of your official email without any explanation, without an apology. You are left with just an automated email and why is that? Because when the going gets tough these tech companies pack up and get going at the very first sign of economic strain. These tech companies have decided to put profit over people. Young expecting mothers have been laid off where is the corporate social responsibility? 

If we go into the figures, in the last six months more than half a million employees have been sacked around the world with over 50000 jobs lost in one week in January alone.  

On January 4, the Salesforce announced that it is cutting 10% of its workforce, impacting more than 7,000 employees. 

On January 5, Amazon announced eliminating more than 18,000 roles and on March 20, it again announced that 9000 people are set to lose their jobs. 

On January 18, Microsoft announced that 10,000 employees will be impacted as part of the layoffs. 

On January 20, Swiggy announced plans to lay off 380 jobs and shut down its meat marketplace. 

On January 23, Spotify announced that 600 employees will be impacted as part of the layoffs. 

On February 6, Dell announced that 6,650 people, or 5% of the worldwide workforce will be impacted as part of the layoffs. 

On February 7, Zoom announced the cut of 15% of its staff, or 1,300 people. 

On February 9, Yahoo announced 20% of its staff, impacting 1,600 employees in its AdTech business. 

On February 26, Twitter laid off more than 200 employees. Since Elon Musk took over Twitter in October last year, the company’s headcount has fallen by more than 70%. 

On March 14, Meta CEO Mark Zuckerberg confirmed rumors that the company will be cutting 10,000 people from its workforce and around 5,000 open roles that it had yet to fill. 

On March 23, Accenture announced that it plans to cut 19,000 jobs, or 2.5% of its workforce. 

On March 31, Netflix confirms a “handful of layoffs,” which includes two longtime executives. 

On February 9, Infosys reportedly fired 600 trainees after they failed to clear the Freshers Assessment, FA test at the IT company. 

On March 19, Wipro laid off around 120 employees to 'realign business needs’. The company, in February, had announced that it will be slashing freshers' job offers by 50 percent owing to current market conditions. 

On the contrary, TCS will not lay off its employees, but will also look to recruit impacted workers, according to Chief Human Resources Officer of TCS Milind Lakkad.   

The reasoning behind these workforce reductions follows a common script, citing the macroeconomic environment and a need to find discipline on a path to profitability. 

For instance, Amazon says it has laid off thousands after a hiring spree in the pandemic and we all know about Amazon's Blockbuster profits during lockdowns, so it was natural for the company to hire to meet demand but what's happening now has been long coming. 

Fast food chain McDonald's is restructuring the company which is corporate lingo for laying off people and they're hiding behind closed doors. Literally McDonald's closed its U.S offices while it prepares to tell employees about their fate. Employees are working from home waiting to know if they have been fired. 

Most of the companies are citing the same reasons that they're not shielded from a slowing economy instead; they are prioritizing growths they are restructuring.  

For nearly a decade Silicon Valley has enjoyed a bull run big offices bigger paychecks a relaxed work atmosphere there was something almost cool about working for a Tech Giant but now this dream has crashed and it's a stark reminder that the economies boom. 

Let's go back to the lockdown days, the tech sector became a rare success story in all the Doom and Gloom. Tech companies drove businesses from door-to-door delivery work, from home apps to video conferencing, big Tech was having its big moment. IPO activity and Venture Capital returned sold to levels not seen before. Good earnings and Rapid hiring were making headlines in the sector. 

But now, the Investments are down. The tech IPO Market has slumped to its lowest level since the crash of 2008. Stocks have plunged. Apple and Amazon each lost more than 830 billion $ market cap in 2022. Fears of recession are everywhere. Mass layoffs are now a routine affair. 

But let me ask you a question. Is there something intrinsically flawed in how these companies have operated? Why do I say that? Most of these famous Founders have prioritized value creation over profitability be it Meta or Twitter they have enjoyed a successful run by selling aspiration an intangible idea, they have prioritized notional wealth over Real Worlds which is why in recent years there's been a big halo around Tech startups. These companies have excelled at rapidly growing revenues without delivering enough profit but that's not sustainable especially when the going gets tough. Most of these companies have gone from stakeholder management to stockholder management. What do I mean by that? A shareholder is someone who owns stock in your company while a stakeholder is impacted by a project in your company. So, while an investor or stockholder may only be concerned about finances, you the employee or stakeholder may want much more than that. 

Why is this problematic? Because you see it is usually the stockholder who has the upper hand. Take the case of any Tech Giant or founder, they create an illusory value around their business model and products. So, when the going is good, the stocks jump. The stockholder takes home big money, the stakeholder not so much and that is exactly how these Founders have become billionaires and when the economy slows down, their net worth may take a hit, but it is you, the employee who suffers. You are sent home with a severance package as a consolation.  There you have it. The tech bubble seems to be bursting, companies are under pressure to cut the bloat, they're paying the price for Rapid hiring, the appetite for big spending on big Tech is going down. Investors see the high wages and cushy perks as unsustainable. These Tech Giants need to face a new reality, they're being forced out of a period of growth at all costs. I'm not saying it's time to write off Silicon Valley but as we head into 2023 it's high time that Tech Giants change how they operate. Look around you, mission-oriented startups are not so Mission oriented when facing investor pressure. Hiring freezes, layoffs, management apologies, they're all reminding us that jobs are breakable contracts not sacrosanct vows. 

Dear tech companies don't show the papers on what you have done for an XYZ NGO or how many children you've sent to school. Tell us what you have done to ensure that your own employees don't face the cruel brunt of this economic downturn that they have had no control over. By the way some of these employees have risked their lives to come to work for you when the pandemic was at its peak and why is that just so that your company could continue churning cash. These employees have picked up work calls while on sick leave and family holidays. why? So that your CEOs could meet their targets and earn the extra billions and now after just a quarter of two of slow growth you decide to sack these employees? How does that even work?  

 I'll tell you what, why not sack the top honchos with incredible salaries? After all they are the ones making decisions calling the shots. Aren't they? It is they who cannot protect the companies from the risks inherent in any business cycle. It is they who have failed to recession-proof the company. It is they who did not have a plan to keep the ship sailing during an economic storm. Why punish those who only took orders? 

The damage goes much Beyond this. Industry layoffs have been seen in Communications, Financial, Health Care and even real estate sectors. This is happening at an odd time for the economy. The labor market is doing well, unemployment has stayed low, there is uncertainty over recession but companies over hired during the pandemic and now unfortunately, people are paying for it. 

What’s your say on this? Let me know in the comments below.