Wondering why are there layoffs in the tech industry?
There are several reasons why there are layoffs in the tech industry. One of the main reasons is economic downturns such as recessions, which can lead to companies facing financial struggles and needing to cut costs in order to remain profitable. Let’s try to
Navigating Layoffs in the Tech Industry: Identifying At-Risk and Safe Positions
In just the first 20 days of 2023, 133 tech companies have laid off a total of 48815 employees, with big companies like Google (Alphabet) laying off 12000 employees, Microsoft laying off 10000, Amazon laying off 8000, Salesforce laying off 8000, Meta laying off 11000, Twitter laying off 3700, Stripe laying off 1100, Snapchat laying off 1000, and Shopify laying off 1000.
This means that around 154843 employees have lost their jobs worldwide as a result of the layoffs.
As the layoffs continue, many employees are wondering about their own risk of being laid off. A former VP of HR at Microsoft offers some insight with Business Insider, into which types of employees are most at risk during layoffs. Though these insights were made a few months back in 2022, it resonates with the current scenario as well.
The Safest Employees
According to the former VP of HR at Microsoft, the employees that are the safest during layoffs are those who are the most profitable for the company. The closer your job is to the most profitable activities of the company, the lower your risk of layoff.
Most safe: Profit-making employees
For example, if you’re essential to building the most profitable product for your company, your layoff risk is low.
Most safe: HR or finance employees
Another group of employees that are considered safe during layoffs is those in HR or finance. These areas usually run quite lean in most companies, even when times are flush.
There is usually little excess to cut, and HR is essential in the layoff process, and finance is often relied on as the financial status gets more scrutiny.
The Most At-Risk Employees
On the other hand, employees that are considered at-risk during layoffs include those involved in event planning or benefits, new initiatives, and contract workers.
At Risk: Event planning or Benefits
Event planning or benefits employees are considered at high risk of being laid off as companies cut luxuries like generous benefits and employee perks when times get tight.
At Risk: New initiatives
Similarly, employees involved in new initiatives, such as exploring new lines of business or expanding into new territories, are at risk of being laid off unless the company is making a concerted effort to pivot entirely to these new areas.
At Risk: Contract workers
Lastly, contract employees are usually the first out when the tide turns as companies use temporary or contract workers to remain flexible in case of a downturn.
It’s important to note that determining the layoff risk in certain roles can be difficult and requires inside knowledge of the company’s retreat and recovery plans. However, regardless of the layoff risk, keeping your resume up-to-date is always good advice. It’s better to have it and not need it than need it and not have it.
The Impact of Remote Work and Automation on Layoffs in the Tech Industry
In addition to the guidelines provided by the former VP of HR, Microsoft, it’s also important to note that some industries within the tech sector may be more affected by layoffs than others.
For example, the shift towards remote work has led to a decline in demand for certain types of hardware, such as laptops and office equipment. As a result, employees in the manufacturing and production departments of tech companies may be at a higher risk of layoffs.
Furthermore, while automation and AI are being implemented by many companies in an effort to cut costs, it’s important to note that these technologies also create new job opportunities.
For example, the increased use of automation may lead to a need for workers with skills in areas such as data analysis and machine learning.
Also, it’s important to remember that layoffs are not always permanent. Companies may implement layoffs as a temporary measure to weather the economic downturn, with plans to rehire employees once the situation improves.
Wrapping Up
Lastly, it’s important to remember that the current situation is not just about numbers and statistics, it’s about people and their livelihoods. Layoffs can be a difficult and stressful time for employees and their families, and it’s important for companies to handle the process with empathy and compassion.
As a community, we should also help each other and support those who have been affected by the layoffs. Sharing job opportunities and providing support to those who are looking for work can be a valuable way to help.
