Saga of recession or layoffs
The concept of the struggle for existence concerns the competition or battle for resources needed to live. Since, Charles Darwin used the phrase in a broader sense and every next era has presented its compatible definition. Over the past couple of years, the world has witnessed and conquered the inevitable scenario of the pandemic. And now, the season of layoffs!
Headlines about layoffs and pink slips have already caught everyone's attention. Over the past few months, the unexpected announcement by a large number of U.S. multinational companies including tech giants Amazon, Meta, Intel, Twitter and financial behemoths like Citi and Morgan Stanley have stunned every employee. A growing list of top tech unicorns or with over $1 billion valuation each is laying-off employees in an attempt to conserve cash and focus on profitability amidst a funding winter this year.
During the pandemic, innovation of multiple services had created novel jobs and directed for more hiring. As per the prediction, the boom for digital services would be effectively long-lasting. However, with the present circumstances at play, one could not have been wrong enough. With many people predicting that this would be a permanent acceleration, the current slowdown and structural shift in consumer preference have come as a disappointing realisation.
“There are decades where nothing happens, and there are months when decades happen” these prophetic words by the Russian revolutionary and politician Vladimir Lenin are still rightly eloquent of the interesting times that we live in today.
What Has Driven the Massive Elimination of Jobs
The likelihood of a large-scale layoff might have a number of causes. Despite the fact that the year started out positively and that no layoffs were announced in January, the impact of geopolitical uncertainty on the world economy, in addition to the troubled markets, high inflation, and the worry of a deep global recession, has been evident. They have put a limit on the renewed euphoria felt throughout the startup world, both in India and outside. The year of "loud" layoffs, which are announced vehemently on all kinds of social media, has begun, and by all indications, the havoc could last into 2023.
Not all startup industries, though, experienced the same level of layoff carnage. Edtech is the worst offender in India, and consumer services and e-commerce businesses are next. Together, these three industries account for massive layoffs, which means that in 2022, nine out of ten Indian startup employees who were let go worked in one of these industries. In addition, these industries are well-known for overspending, and many firms in these fields were forced to lay off staff in order to save money when startup funding dried up.
More importantly, it will affect the "trust" factor and professional ethics when IT (and other) organisations across the board believe that cutting headcount is the only solution to reduce cash burn during any downturn.
A few conclusions will become clear if the timings of significant layoffs during 2022 are examined. The majority of layoffs initially occurred near the end of 2022, and experts predictiomn says that a new round of layoffs to begin in 2023. As an illustration, while Meta, Amazon, and Twitter announced layoffs in November 2022, Google and other digital titans may begin firing employees as early as January 2023.
What's Coming Up in 2023
Ironically, retaining a company's most valuable assets has evolved into a strategy for its survival. However, a significant part of the current state of affairs can be attributed to macroeconomic reasons. Companies have been observed willingly seeking to write off the investment in talent acquisition as gloomy economic clouds gather across the world.
Will such massive layoffs in the tech industry ultimately be helpful even though the best intellect is being fired? Unfortunately, things could get worse in the future. Although economic patterns change from boom to collapse, technology is only seen to be moving in one direction.
Therefore, the organisations who are most eager to say goodbye to their talent will find themselves playing catch-up when the economic slump is over and the business cycle mandala turns. There will be a tendency to spend millions of dollars on rehiring employees, which will ultimately cost revenue. According to history, the technology sector is prepared to undergo significant corrections and modifications.
Understanding how the loyalty of the workforce will change during this period is vital. These tech behemoths will face fierce new competition, which will be difficult. Disgruntled workers can be observed looking for solace in startups that are much more adaptable and tolerant than the industry's IT behemoths.
History demonstrates that Silicon Valley has saw a number of legendary businesses launch during periods of economic downturn. The best example of this, which debuted in 1998, is Google.
This came about as a result of bizarre job market conditions in the past, and history may repeat itself in the present dire position. The only difference between previous ends and the new beginning is the addition of a new volume to that legacy by the recent layoffs. If talent layoff realises its potential, the economy may soon witness the emergence of new businesses that will be beneficial to the sector.
Thus, even though the times are hard at the moment, the tech layoffs and the questionable strategy of the tech giants and companies might lead to a start of a new era.