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2022: The Year of cold-blooded layoffs

14 Nov,2022 07:07 PM, by: Pooja Dasgupta
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Once a dream industry for millions across the globe, the tech industry has recently become way too volatile for employees to place their bets in. The market gave a rude awakening to several tech giants and booming startups in both Indian and western markets - reduction in funding, revenues and overall profitability in the middle of a looming recession are all likely factors that have caused several employees to be stricken by massive layoffs. 

Layoffs in Indian startup ecosystem

For those keeping up with the news know that the world’s largest edtech company in India, Byjus’ has come under a brutal social media trial for letting go off nearly 5% of their 50000 workforce. The penning of an emotional mail to its soon-to-be-fired employees shortly followed by the news of Byjus’ signing up Footballer Lionel Messi has received a lot of hate in the professional networking site LinkedIn. In their defence, Byju's founder and chief executive Byju Raveendran emphasised that the Messi deal went through six months prior to the layoff announcement, and it wasn’t soon after they took the decision to let many of their employees go. 

While the decision to restructure their workforce is justified with their long-term sustainability measures, it still doesn’t sit right, especially when they also claim to have grown 70% in the last year, having scored 3x revenue in FY 2023 and after describing the past six months as the best six months for their company. From what it seems, ‘growth’ is no longer in correlation with the ‘revenue generation’ of a company, and there’s a lot of inflated figures being fed to the media and investors to keep companies afloat.

However, if you thought that it’s only the edtech giant in India that has handed pink slips to their employees, you have thought wrong. An Inc42 report reveals that more than 15000 employees have been laid off so far by 44 startups in the Indian startup ecosystem. The layoffs come to light after a declining funding trend recorded in the startup market. The impact among mid to senior level employees is more severe as not many opportunities in the market open up in bulk. To make matters worse, most people in mid to senior positions also have bigger financial responsibilities riding on their back (home loans, school / college education of children, etc).

Layoffs in the West

There’s a massive storm hovering over social media platforms with divided speculation over Elon Musk ascending the throne of Twitter. Shortly after Must sacked the C-suite employees of Twitter, the company laid off around 3800 employees across the globe in a rather ugly fashion. Many Twitter employees reportedly woke up to their access being revoked with no warning or time to complete their exit process. Apparently there were employees who were unfortunate enough to find themselves locked out of their work devices in the middle of business calls. 

Musk has defended his stance by pointing out massive losses to the tune of billions being incurred by the company with every passing day. Although Twitter continues to be in the news for a lot of other ‘blue’ reasons, the way they handled their layoffs will be the worst of all. 

However, Twitter isn’t the only giant in the process of downsizing their workforce. In more recent news, Meta has laid off 11000 employees across the globe, a solid 13% reduction in its workforce. Microsoft also bid goodbye to around 1000 employees in the third round of downsizing this year (implying they have been letting employees go in multiple phases). Adding on, two consecutive downsizing practices adopted by Netflix this year have also led to 500 employees being let go of their jobs. 

The year has been brutal and a real eye-opener on the sustainability outlook of some of the most sought-after tech giants in the world. Admitted these mass layoffs are a product of external market conditions fuelled by a looming recession. However, it also highlights bad hiring practices, unsustainable pay packages and short-sighted expansions adopted by tech giants when the market is in favour, with little to no financial preparation in the event of an economic meltdown. 

The sliver of a silver lining

The upside of these brutal firings coming to light is that many small to medium scaled companies are now able to recruit top talents who were let go from their respective companies and seize the moment as the ‘good guys’ offering jobs to the ones laid off. More importantly, it goes on to show that the job market is still looking up for the ones currently job hunting. 

The takeaway perhaps from the recent observation is that, companies need to be more mindful about their hiring capability, so that it doesn’t end up in the firing end by the time revenues don’t add up the the years to follow. On that note, keep hustling ‘steadily’. 

Disclaimer: The opinions expressed in this article are those of the author's. They do not purport to reflect the opinions or views of The Critical Script or its editor.

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