Over the past month, we have seen more and more tech companies announce considerable layoffs against a backdrop of economic uncertainty, highlights Lewis Maleh.
Meta recently announced they would be letting go of 13 percent of their workforce, which is around 11,000 employees. At Twitter, Elon Musk’s takeover has seen the staff shrink by around half and at Stripe layoffs are around 14 percent of their workforce. Similar stories are emerging at Amazon, Netflix and Lyft too.
There are several causes for this. As clients reduce their expenditure on digital advertising and rising inflation slows consumer purchasing, the tech sector has been dealing with shaky economic conditions and declining revenue. In fact, some tech CEOs have been very open about ‘over-hiring’ when times were good.
With the number of job losses unfortunately increasing, what does this tell us about what work and recruitment might look like in 2023 and beyond?
Will tech recruitment slow long term?
The tech industry is looking a little bit like investment banking. Over-hiring in the good times, attracting people with high salaries, bonuses, and share options. However, when difficult times inevitably come, these organisations are cutting deep. All that said, it should come as no surprise to people as the potential risks and rewards are there for everyone to see. Hiring will slow in the short term, but probably not for long.
Is this the end of remote working?
Twitter have also recently announced the reversal of their remote working policy with the majority of staff told they need to be in the office upwards of 40 hours a week. This could indicate a sharp break from the surge in remote and hybrid working we have seen in the post-covid working world, but does this mean others could follow suit?
There is certainly a possibility that companies will increase mandatory office hours, however, this change could have a big impact on team morale if it is introduced without employee consultation. Many employees will enjoy the flexibility that accompanies hybrid working to promote a better work-life balance. Similarly, any changes introduced to working patterns should be accompanied by the context as to why this might improve productivity, growth and/or collaboration.
Ultimately, whatever the structure of the workplace, it should be grounded in trust between employees and leaders and a focus on outputs over time.
The importance of honesty and transparency
There is no doubt that job losses are difficult for everyone involved. No CEO wants to make layoffs knowing the difficulties it can cause those exiting the company. During this difficult time, sharing as much context as is available can help to make transitions as smooth as possible.
For example, Stripe publicly shared their CEO Patrick Collison’s email to employees that detailed the broader economic context in which the company was operating, how departures would be handled (including remuneration and any healthcare and immigration support) and they were open about the errors in judgement they feel were made by Stripe’s leadership team.
Of course, there is no ‘perfect’ way to handle job losses. It is not always possible to share as much information as this publicly. But when employees might find out key information about severance packages through the media or there is room for rumours to circulate about who might be affected, the whole process becomes much more distressing for everyone involved. Transparency is key.
Don’t neglect your employer brand
Culture is often the number one thing people are looking for when they look to join a company. Now more than ever, employees are proactively looking to join organisations where they feel personally valued and part of something much greater.
However, public mismanagement of any layoffs is likely to cause long-term, and sometimes irreversible, damage to employer brands. With the world as connected as it is, people will quickly know about it. These companies will look to hire again in the not too distant future and having a bad reputation affects your ability to attract people, especially in a competitive market where culture makes all the difference.
Company culture needs to stretch to employee exits too. Those leaving the company should be treated respectfully; could you recommend them to an appropriate recruiter or point them in the direction of organisations hiring? Those are the kinds of exits people will remember. Former employees will continue to speak highly of you if you are as proactive as possible.
Remember, candidates are people, companies are people, clients are people, suppliers are people, and people remember how you made them feel!
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Lewis Maleh is is an Executive Recruitment Expert and is the Founder and CEO of Bentley Lewis, an award winning global boutique executive search firm.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
