What Most Of Us Still Get Wrong About Layoffs

If you are a JOBSEEKER, hone your skills now to be ready for Q1 2023 hiring season. If you are an EMPLOYER, don’t be greedy to use market sentiment and exploit human resources (unless financially unstable). If you are a seasoned STAFFER, stay put — you know the trend always goes down to come up again YOY.

8 min readDec 23, 2022

This 2022 quarter, it’s almost impossible to ignore layoff news on your phone newsfeed or talking to colleagues, friends and family members. Some express horror, some sympathise, some empathise and some multiply and spread the word (without necessarily verifying the facts because it is quicker/easier to click that SHARE button than spending time verifying the facts/conclusions with data analysis. I am also to be blamed for not getting this every time right).

In this article, our goal is to shed light with a perspective of HOPE and positive sentiment (as opposed to everything doom) , because layoffs have been happening since decades and YET in that present moment, media and advertising content make “mountain of a mole” (this is true about every sensational and viral news since the dawn of social media though, isn’t it) to influence sentiment, sway markets and exploit the weak.

We strive to achieve a balance between succinctness and accurate data analysis in this article (presenting too much data is overwhelming to our readers but at the same time understanding a complex topic towards a unanimous conclusion requires deep data analysis)

Note: All of the data we use in this article is from Symmetrics.fyi platform (except the layoffs data)

TL;DR Massive HIRING always happens Q1 of every year

Layoffs Analysis

While it is easy to type “Layoffs 2022” in Google and regurgitate all of the zillion articles here, we prefer NOT to do that (because you can do that too, in which case you don’t need this article). We would like to take a data-driven approach and use a portal (layoffs.fyi) that publishes layoff news with decent numbers and data — updated frequently since COVID (2020 and later). The data is NOT exhaustive, but it does reinforce the current “doomed” sentiment mentioned above.

QOQ (Quarter on Quarter) Analysis

The layoffs in 2022 (yellow) are the highest per quarter except the 2020 Q2 quarter which is an outlier

MOM (Month on Month) Analysis

The YELLOW bars are clearly standing out and infer the same that the layoffs in 2022 are the highest so far.

Few More

Industry analysis shows that transport, consumer, retailer, finance industries lead in laying off employees.

💡 Questions for Thought

Isn’t COVID period an outlier for almost everything we did in the past century or so ? For e.g. what was the trend before covid and shouldn’t we compare and contrast data over a bigger time window (maybe 2015–2022 )?
Layoffs.fyi does not necessarily cover the entire industry, but does it contain statistically significant data to capture the trend ? Ans: In our analysis, we found layoffs.fyi is decent to capture trend in high skilled jobs categories
Layoffs.fyi captures only layoffs, not hires (hires minus layoffs captures growth and is a much more honest metric at aggregates)
Aggregate sentiment does not necessarily apply to me every time (for e.g. world has to run, people need food medicines and services need to be up for sustenance and that means a certain minimum human workforce always needs to work in their jobs for the ~8b people-machine to run continuously)

Random Question

IF someone asked you “Could you move the earth” ? Your answer should NOT be “No I cannot”. It should be something in the lines of what Archimedes said as below

Give me a firm place to stand and a lever and I can move the Earth!

The point being “Without more context and a frame of reference, try not to conclude, infer, assume or opine”

The same applies to layoffs sentiment. Without knowing HIRING numbers (in relation to layoff numbers), arriving at conclusions and subsequently getting demotivated would be similar to getting carried away like a feather in the wind. You do not want to be that right ! At least we assume so. For e.g. if hiring increased by 1000% percent and layoffs were 50%, the net effect is still positive (Can you guess where this story is going NOW 😀)

Hiring Analysis

We use Symmetrics.fyi for data, as it is the only portal online that publishes data, which is employer-submitted and government certified. Any other labor metrics portal on internet has user submitted data that is fake at worst, and statistically insignificant (for inference) at best.

QUARTERLY YEARLY ANALYSIS

Each BIG block represents the total hires in that year from 2015 to 2022
Each inner block represents the quarterly hires in that year
Generally speaking pre-COVID — Q1 to Q4 is a downward trend (i.e. Q1 hires the most and slowing down through Q4 — the size of the block goes down). This is generally true in most corporate/enterprise settings where budgets get slashed and cost-cutting increases as year progresses (while the CFO and finance teams exert pressure on rest of the org departments to justify the deficit between expected and actuals on the books while simultaneously figuring which line items need to be capitalised vs. expensed).
It is also true in most corporate settings, that big plans are made towards the end of the year (all the debt that is left behind in current year and new project next year) and those growth plan executions drive conversations to allocate more money from investors
However COVID years are outliers. There was intense competition to hire more labor (also talent) and hence companies never stopped hiring, in fact tried to get ahead of each other. So as opposed to the generally expected hiring trend going down Q1-Q4, it stayed up all during the year and never stopped. Another reason is that tech stocks got overvalued during this time (from a stock market influence driver)

The purple oval highlighted are the COVID years where hiring shot up in Q4
Otherwise hiring trend goes down Quarter-over-Quarter pre-COVID

Pivot Table (actual numbers)

The overall number of jobs (purple line) trends up from 2015 to 2022 and that is a normal trend (though the marginal increase in COVID jobs is abnormally high)
Green line is pre-COVID quarterly numbers while red line is COVID where there is no clear trend (conforms to the previous inferences)

In all the above charts, trending left to right gives a negative sentiment as if jobs are losing, and that feeling is reinforced towards end-of-year

Wait ! I am not done

Did you notice that EVERY year, jobs hiring starts at a HIGH in Q1?

The GREEN curve shows that though hiring ebbs end-of-the-year, tide rises AGAIN early next year

Hey just wait !

Your analysis above is way too high(ly) aggregated at all jobs , all industries etc. I generally get to work at a few companies in my entire life, and I want to know the trend at the companies that drive the markets.

A great thought that occured to us as we were doing this analysis. So we set out drilling the analysis deeper at the employer/company level to see how the trends look like

QUARTERLY EMPLOYER ANALYSIS

Much like the above QUARTERLY YEARLY ANALYSIS, this shows the top 10 employers and their hiring numbers split by Q1 to Q4 from 2015–2022
Microsoft, Google, Amazon are product companies while Infosys, TCS, Accenture, E & Y etc. are service/consulting companies — hence there is representation of both product & service companies
The top 10 companies above are a good sampling of the the overall trend (much like how S&P 500 is for stock market index. Improvements are always there, but by and large at a level that is statistically representative)
The downward trend of hiring from Q1-Q4 holds true even when we drill down at the employer/company level — which means that our prior inferences align so far

Lets go a step further drilling down into SERVICE and PRODUCT companies separately

SERVICE COMPANIES

Infosys, TCS, Accenture, Deloitte — All the service companies have more or less same trend i.e. pre-COVID hiring trends down from Q1-Q4 , EXCEPT in COVID years, the trend upped in Q4
All of them HIRE massively during Q1 of every year

PRODUCT COMPANIES

Google, Amazon, Microsoft — All the product companies have more or less same trend i.e. pre-COVID hiring trends down from Q1-Q4 , EXCEPT in COVID years, the trend upped in Q4
All of them HIRE massively during Q1 of every year

Conclusion

That is the HOPE (hiring happens Q1 every year regardless) we mentioned at the beginning of this article — A data-driven approach of looking at reality. Next year 2023 will also be the same trend (may not be as high as that of last 2 years, but nevertheless will be definitely higher like any other normal years. So PREPARE and don’t give yourself away to the negative sentiment)

For more data on every company, job, job title, state, city etc — Register on Symmetrics (https://symmetrics.fyi)

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