Are the Tech Layoffs Really Techs’ Fault?
A closer study of what leads to layoffs today.
A few days ago, on the 20th of January 2023, as most of you may have heard already, Google laid off 12,000 staff.
According to The Information, most who were affected were high performers and payers.
Other tech companies are also doing the same thing: Mass-layoffs.
I’ve read comment sections from social media posts that what these companies did was mainly bad and unfair (I paraphrased it), CEOs get to keep USD$100k+ and then lay off their employees.
But……is it really their fault?
The pandemic hire boom, and the demand for more staff.
Remember those work trends of “the Great Resignation” in 2020, and “Quiet Quitting” in 2022?
Some of us were resisting the hard labor with little gains during the hard times of the pandemic.
Okay, you might be wondering, “how is this related to the layoffs that these billionaire companies did to their own employees?”
Or…
“Are they doing their revenge on us for fighting for our rights?”
Well, I think not really.
Let’s start chronologically. Here’s my theory to this conclusion.
The Pandemic, Layoffs, and the Great Resignation
When the pandemic happened, we were all forced to stay at home and businesses closed.
So as we all experienced, we all did EVERYTHING at home.
But the businesses that need people outside their homes such as cinemas or restaurants, suffered a lot. As the result, many of these businesses struggled financially and some were even permanently closed.
And once the business is struggling, they had no choice but to lay off people. Like a lot. Even the ones who were loyal to the company for years were affected.
In other words, no one was safe.
It was a game of luck.
The ones that managed to survive had another thing coming:
Overwork and toxic work culture.
Boundaries between rest and work were mixed. Most were working and working non-stop.
As online services increased, so did the to-do lists. And so did the work hours.
And, let’s face it, looking at the screen 24/7 is really exhausting.
But sadly, despite whatever you’re feeling at that time, a business must go on. You have to keep working now that everyone is online ALL THE TIME.
And because you can’t meet face-to-face to work, miscommunications tend to happen.
This could also result in miscommunication, leading to arguments among staff and untouched work because of no clear directions.
The worst part is that it diminishes morals and trust among each other, making the team fall apart.
Thus, at some point in 2020, article after article about people in depressed and burned-out states starts rolling in.
And that’s why the Great Resignation happens.
As you can see above, the biggest driver that made employees leave is the toxic work culture, which a lot of people felt back then.
Symptoms of toxic work cultures, according to The Muse, written by Puneet Sandhu, are:
- There are no boundaries around work.
- People don’t trust each other
- There’s no room to make mistakes
- People treat each other with contempt
- Interpersonal relationships aren’t healthy
- There is no support for employee growth
- People frequently feel gaslighted.
- People regularly experience physical symptoms of work stress
- People are disengaged and turnover is high.
Sadly, in 2020, most people felt this. If you ever search on Youtube why people left their big payment jobs, especially in startups, there is bound to be one of these reasons that were mentioned.
Management teams, at some point, must need to comply with what employees want to retain their employees and keep them from falling apart.
So, they had to hire more people to anticipate the demands during the ‘work from home’ era. Giving them big salaries, great benefits, etc. All to keep them, employees, from leaving.
However, at this point, most people had lost hope in employers.
I’ve read in a comment section somewhere that companies laid off employees to save cost but the big guys on the management team are living in luxurious mansions.
So a fightback was devised:
Quiet Quitting.
The rise of Quiet Quitting
I don’t really understand why this term came up because really, as Linkedin said:
“Isn’t that like….doing your job?”
But the phenomenon of this is that you’re not willing to check your work at all as we did back then after office hours.
So in a way, it’s like:
“What’s the point of working so hard when the result will only be the same?”
They’re not breaking the rules or anything.
You can’t blame this phenomenon to happen because it’s a way to cope with the burnout that we experienced back in 2020.
But managers probably would view it as ‘lazy’, especially in an economy that is moving so fast.
Plus, the side-effect of this is that it may affect your career in the long term. Ronaldo, the greatest footballer in the world, even brought this up in his viral interview with Piers Morgan:
“They (younger generations) don’t care, a few care, but most of them no, and for me it doesn’t surprise me.
They are not going to have career longevity, it’s impossible.” — Cristiano Ronaldo, 2022. Cited from ESPN.
And it probably did.
War, Economy, and Layoffs
In early 2022, Russia invaded Ukraine.
And just two countries at war, it had affected the ENTIRE WORLD.
I remember thinking, “okay, it’s far away from Indonesia. What’s the harm?”
Famous last words.
Days later, I went to the gas station, and the price unimaginably increased.
Like a lot.
This triggered other inflation as well. Supermarkets, restaurants, and all the prices of our basic needs increased.
Meaning the cost of everything rose. Every penny counts.
The economy shook again, and the layoffs began.
But this time, it’s in the online sector. Where most of the laborers are paid quite highly.
As the result, companies then began slashing out jobs. Even big companies like Google and Amazon were feeling it.
And just when we thought that that would be the last of the layoffs, another phenomenon happened.
The Rise of AI
The appearance of ChatGPT out of nowhere also wasn’t really helping the condition as well.
Great product though. I used it several times.
It reached 1 million users in 5 days.
This means, if companies don’t work fast, they won’t be ahead of their competition.
Though if the circumstances during the launch were different, it probably won’t fuel the flame to the layoffs.
For example:
- Microsoft announced that they were laying off about 10,000 people.
- Not long after, they made a deal to buy ChatGPT, backing the AI for about $1 billion.
So how is it they are able to invest while also laying off the staff?
Google is also doing the same thing.
This also explains that AI is the future.
And it also means, that AI will be part of the job market of:
Low-Cost High Profit
The above picture is a conversation between my friend and me.
Here are some Indonesian translations:
1) Kenapa = Why
2) Ga kena = didn’t get
3) PHK (Pemutusan Hubungan Kerja)= Lay off
4) gara2 (gara-gara)= because
She told me that her tech company had begun laying off people, but she was safe from the layoffs.
And when I asked her what she thinks that might have saved her are those reasons above.
No matter what business you are at, everyone’s aim is to cut costs but with a high return on investments.
If you’re not ahead in the game, you’ll fall behind fast.
And at the moment, this is the reason for the layoff decisions.
Conclusion
All this is happening because of the domino effect of the pandemic.
Everything escalated very fast since 2020.
- The pandemic leads to layoffs and overwork
- The mass resignations that leads to short in labor
- The high salaries to fill the labor shortages
- The war that leads to inflation
- Inflation leads to the need to cut-cost, thus layoffs
- And the rise of AI that leads to job reductions
Can we blame the CEOs for their decisions?
Perhaps.
On the one hand, times are changing real quick here.
We all must adapt.
And when I say we all, it applies to both employers and employees.
But on the other hand….
“If you want a house, stop buying avocado toast!” — Sam T Levins, The Guardian, 2017.
If let’s say it’s true, that CEOs and BODs are making layoff decisions in their million-dollar mansion, then we can’t really blame the external environment now, can we?
It’s all the more reason that we must prepare and be financially educated to save ourselves.
To prepare for any storm.
