Over 120,000 employees were dismissed from their job in 2022 from large technology corporations like Google, Amazon, Meta (Facebook), Microsoft, Netflix and major startups. In 2023, it is estimated another 190,000 employees will lose their job due to this trend of mass layoff.
This is a positive time
Some of the major layoffs in the first 3 weeks of January 2023:
- Amazon: 18,000
- Google: 12,000
- Meta: 11,000
- Microsoft: 10,000
- Salesforce: 8000
- Twitter: 4400
Sub-topics in this article:
- Real reason behind this 2022-2023 mass layoff
- What employees say?
- What to do next? How to reinvent your career?
Real reason behind this 2022-2023 mass layoff
Jeffrey Pfeffer who is a Professor at Stanford Graduate School of Business explains that this is a copycat trend so many more tech companies are expected to layoff employees in 2023.
Academic study has shown that layoff do not help cut company cost. This is because it increases unemployement insurance rates and reduces the productivity and morale of remaining employees by several folds.
Companies are definitely not running out of money. Let us take the example of Google:
12,000 employees x $500K/employee = $6 billion Google saves a year by layoffs = $1.5 billion/quarter
Yet Google made $14 billion profit last quarter
A direct positive impact is on stocks which benefits day-traders, investors and shareholders:
- Google's stock rose by 5.7% after lay-off of 8% of workforce
- Wayfair's stock rose by 20% after lay-off of 10% of their workforce
- Similar rise in Stock price for each company
To predict a company will lay off:
- Did it beat quarterly revenue estimates by stock analysts?
- Did it beat quarterly earnings expectations?
- Is its Price/Earnings (P/E) ratio high vs competitors?
The main issue is when a large company do mass lay-off, shareholders of other large companies question and force themself to do mass lay-off. This has a cascading impact. There can be other reasons for mass layoffs but this reason will the real one for 2022-2023 mass layoff.
What employees say?
David Elworthy, a Staff Software Engineer at Google expressed his thoughts on how the company has evolved since his 19 years of service (since 2004).
Kathy Brennan, Senior Researcher at Google explains that these mass layoffs appeal investors and shareholders but does not help much towards cost cutting for a large corporate like Google. She mentions that people on their path to success lose touch of humanity and does not consider statistics on Google's strong free cash flow, low dept and upcoming projects. They do not cut cost on non-human ways like releasing an unused building but choose to layoff employees.
As a motivation, she was a part of the mass layoff in 2008 and she used the opportunity to reinvent her career. Her post on the current situation (she has not been sacked):
Performing exceptionally well in your job do not ensure that you will not be laid-off:
What to do next? How to reinvent your career?
Any employee who lost his or her job should do the following immediately:
- Make a post on LinkedIn and Twitter mentioning the post you held and you have been a part of the mass-layoff. This can help you land the next opportunity.
See this post by Kyle Ranally as a sample:
or a short one like this by Kayla Stringfellow:
- As most of you must be stressed and based on research, self-harm becomes a common problem after this. You must take at least 2 weeks off or holiday. You may just stay at home, enjoy your favorite shows, talk to loved ones on general topics and do a hobby.
- After 2 weeks, check your dms and emails if you have any offer. Try reaching out to HRs of smaller or unaffected companies. Do not take stress.
- Manage your savings effectively. Remember these tough times can last for a long time (maybe years for some) so you should be prepared financially.
- Remember you will not get a competitive job offer. It will have lower pay or lower post. Take your own decision and take the best job offer. Many people skip these and regret later.
- If nothing works out for the first 3 months, continue your effort.
- Try to invent your career. Check other job opportunities (will be at a lower pay) or try to setup an online business.
Most important: Talk to others and keep your mental health good. If you are mentally healthy, you will bounce back.
Ritendra Datta, Director Of Engineering at Facebook has three suggestions for those impacted by these mass-layoffs:
- People who are not laid-off should avoid posting publically on the topic as it diverts attention from those who have been laid-off actually. One should privately message the affected one and provide help directly. The posts from the affected one help potential HR to spot candidates to hire.
- Founders and CEOs should explain what they will do to improve the situation and not pass general posts like "I take full responsibility."
- Affected employees should maintain mental health and take time off doing some hobby instead of intense job hunting. The tough times can last for a long time so be mentally prepared.
Apple CEO Tim Cook took a huge pay cut of $35M and will lower his salary by 40% further to prevent Apple from the need of tech layoffs. As of January end 2023, Apple has been the only tech company that has not laid off its employees in mass scale.
This being said, mass layoffs are a tough time and many people stay jobless for years. This is a time that test you as a human. Keep your mental peace and do what you love.