According to Trueup.io data, which tracks tech layoffs, so far in 2023, there have been 534 layoffs at tech companies with 153,005 people impacted (2,732 people per day).
The start of 2023 has turned jittery for job seekers. There is a scarcity of new jobs as existing employees by tens of thousands are let go by many companies, especially by tech biggies, unicorns, and startups. So far in 2023, more than 2,700 people have lost their jobs on a daily basis. As of now, cumulatively, over 1.53 lakh people are impacted as per data. And those who have a job thankfully still under their kitty are facing either salary cuts or no hikes. Meanwhile, many are hired but are still struggling due to onboarding delays. The biggest spoilsport for this layoff winter could be macroeconomic risks and recession fears.
It's hard to find a job these days. The industry growth struggles with constraints from high inflation, geopolitical tension, rate hike cycle, multi-year low unemployment rate, the cold war between US and Russia and so much more. The major economies are feared to be at the edge of recession.
Tens of thousands of people have been laid off by tech giants such as Meta, Google, Amazon, and Microsoft in recent times. Meta last year shocked by carrying a massive 11,000 job cut, while Google trimmed its workforce by 6% to 12,000 layoffs, on the other hand, Microsoft let go of 10,000 employees. And to top all of them, e-commerce giant Amazon laid off massive 18,000 employees. Tesla's CEO Elon Musk who took charge of Twitter last year also fired a significant amount of people on the social media platform. Dell Technologies as well carried mass job cuts to the tune of 6,650 employees.
More layoffs are in the offing. Lately, the parent of Facebook is said to be looking for another 11,000 job cut, while telecom giant Ericsson announced a plan to trim 8,500 jobs. Consulting firm McKinsey too is on a similar boat and is planning to let go of 2,000 employees.
If that is not enough to send uneasiness among job seekers, then reports have said Amazon may trim the salary of employees by 50% in 2023. Whereas, Google now seems to be asking employees to share desks while working. On the other side, many employees are still awaiting their onboarding after months of being hired by various companies.
According to Trueup.io data, which tracks tech layoffs, so far in 2023, there have been 534 layoffs at tech companies with 153,005 people impacted (2,732 people per day).
The data showed that last year, there were 1,535 layoffs at tech companies with around 241,176 people impacted.
Layoff winter is expected to probably end in the second half of 2023. (trueup.io data)
This as-told-to essay is based on a conversation with Jeffrey Pfeffer, the Thomas D. Dee II Professor of Organizational Behavior at the Stanford Graduate School of Business. It has been edited for length and clarity.
The idea that human behavior is influenced by what others do is really old. If you're a pedestrian and you see a stop signal, but no cars are coming and somebody steps into the street, you'll probably do it too. It's almost automatic behavior.
We should expect this to also be true in business. A lot of companies were hiring during the pandemic, so everybody decided to hire. Now, companies are laying off, and everybody decided to follow each other and lay people off. A lot of this is just imitation.
Companies don't throw out their capital equipment the minute market turns down. Hiring and firing like this is expensive. First you pay severance, then you go back into the market and pay recruiters and head hunters. You may also pay bonuses to get people to come work for you.
And when the economy turns down, you do this all over again. These are all extra expenses that companies wouldn't incur if they had a long-term idea of how many people they needed instead of hiring and firing with every economic fluctuation. If you think about it, companies are essentially buying high and selling low with their employees, which doesn't make sense.
A lot of companies doing layoffs cite the economic downturn, but many of them aren't going to run out of money if they avoid layoffs. This is a choice.
When people no longer have jobs, their purchasing power and purchasing activity goes down. So these layoffs help create the very economic downturn that they're supposedly protecting against.
The companies also try to justify the layoffs by saying there's been a drop in demand, but you could argue that one of the reasons for that is that all this talk about layoffs has scared everybody. That means fewer companies want to advertise, for example, which affects companies like Meta and Google. So it becomes a self-fulfilling prophecy.
There was a time when companies cut employment only in times of severe economic stringency. But now they've become kind of routine, and there's very little consideration of the harm they cause.
Layoffs have a huge behavioral and physical negative effect on people. So while companies are trying to maintain their margins, they're exacting an enormous human tool
Layoffs are stressful, and stress leads t o a bunch of unhealthy behaviors. People's social identity and friends networks are often tied up with their jobs and where they work. Research has shown layoffs can cause a 15% to 20% increase in death rates for affected workers for the following 20 years, and they can drive the odds of suicide up by two times or more. We as a society will pay for the health consequences of these layoffs.
In many instances, layoffs don't increase stock prices or cut costs. Between things like the cost of severance and the loss of productivity, layoffs have pretty nasty and negative consequences for the company. It's not clear they actually increase profits.
The irony is that these same companies were talking a year ago about people as their most important asset, and now they're treating their employees pretty badly, laying them off via email or by abruptly cutting off their access to the company. These layoffs are a decision that reflects the company's values, and these companies have basically given their employees the middle finger.
No comments:
Post a Comment