From Twitter to Meta, Amazon and Disney, several tech behemoths have been laying off their staff in thousands, which has raised concerns over the impending recession.
Twitter, which has been in the news, since the announcement of Elon Musk’s takeover, has reportedly terminated a large number of its contract workers. As reported, the microblogging platform had to let the workforce go without giving any advance notice to the full-time employees who collaborated with them.
Apparently, 4,400 of Twitter’s 5,500 contract employees, on average, were let go. It should be noted that the action comes after more than 3,700 full-time employees of Twitter were laid off at the beginning of the month, just days after Musk bought the platform.
Some of Twitter’s contract employees were also from India. Reports claimed that the company has fired the entire marketing and communications team in the country.
Additionally, it was said the microblogging platform fired 180 out of the 230 workers in India’s marketing, communication, and other departments.
Following the layoff reports, Twitter’s new owner Musk reportedly told the B20 business leaders’ conference in Bali via a video link that “I have too much work on my plate, that is for sure”.
However, Twitter is not the only one, which is currently facing criticism for such moves, but also the top social media player, Meta.
On November 9, Meta CEO Mark Zuckerberg announced that the company would be laying off about 11,000 workers, or 13% of its global workforce.
According to reports, up to 100 of India’s estimated 1,000 employees—mostly software engineers and other tech professionals—have been impacted by Meta’s decision.
As an additional cost-cutting measure, Meta has chosen to discontinue the development of its two unreleased smartwatch projects and its Portal video-calling smart displays.
Zuckerberg reportedly told his staff, “I want to take accountability for these decisions and for how we got here”, adding that “this is tough for everyone” and he was “sorry”.
Apart from Twitter and Meta, Amazon has also joined this spree. It was reported recently that to cut costs, the company is reviewing its ineffective divisions.
Amazon has told some of the employees in underperforming units to look for work elsewhere within the company after a month-long review. The business is also closing teams in industries like robotics and retail and moving employees from some teams to more lucrative divisions.
This list also includes Walt Disney as on November 14 it was reported that to bring the Disney+ streaming service to profitability against the backdrop of economic uncertainty, the company announced plans to freeze hiring and eliminate some positions.
The Severity of Layoffs
Though there are several claims regarding these layoffs, the major question is how severe this issue is going to be and how further it would go in India.
Niraj Bora, Founder of Surmount Business Advisors Pvt Ltd, told News18: “Layoffs are not something that the company enjoys, and employees are affected badly due to this as companies are suddenly doing this.”
According to him, almost all of these companies are loss-making and since they have not reached sustainable levels, while funding is dried down, it was an eventuality.
“Once the funding picks up, the pace of chasing growth will increase further the hiring spree. We can expect this from more start-ups/companies who haven’t reached profitability. So, survival is more important than not firing employees or any sort of cost-cutting,” he added.
Bora also predicted that in the future employees would look for more sustainable companies in the short term, till the funding scenario, the recession situation improves worldwide.
“After a certain period this cycle would go and the boom cycle would kick in again. That’s the normal business cycle that we have experienced in the past and would be there in future,” he noted.
Rajarshi Bhattacharyya, Chairman and Managing Director of ProcessIT Global, claimed that the amount of investment that an organisation puts behind every employee is substantial and letting go of an employee be it contractual or on-role is not an easy decision to make.
“However, the current macroeconomic conditions coupled with the performance of the business units force organisations to take such steps and the impact of these decisions is not restricted to geographic boundaries,” he noted.
He said: “But organisations in most cases take note of the employee’s skills before letting them go. If organisations figure out that the human resource can be re-provisioned in any other business unit they do so.”
In the case of Twitter’s layoff decision, Bhattacharyya specifically stated that it’s difficult to assess the vision that Twitter 2.0 (post Musk’s takeover) will have.
He said: “Since Musk has time and again proved to the world that his vision is future-proof so it would be better to reserve our comment on this.”
But overall, he believes that the time has come for organisations to look at cost-cutting as a measure to improve profitability due to current economic conditions.
“We expect many organisations to take such steps in the near future and employees should immediately look at reskilling themselves to stay relevant,” he added.
Meanwhile, Christopher Roberts, Managing Director of Engaged Strategy highlighted that the 2021 investor boom in India has been countered quite severely by the economic downturn, aided by the Russia-Ukraine war, rising inflation and the spike in interest rates by the US Federal Reserve.
He explained that a majority of venture capitalists focussing on India investments have markedly kept cheques on hold, only investing in calculatedly safe deals.
“This has obviously resulted in massive layoffs in India after the bullish phase of the previous year,” he added.
Focusing a different angle on this job-cutting issue, Roberts told News18: “Being laid off instils in them a negative belief that they are not good enough. If this belief system strengthens with time, maybe due to lack of job opportunities or social and familial pressures, it can have a heavily negative socio-psychological impact on the affected employee.”
So he believes that in this current situation it is extremely important for organisations to overcommunicate and convince the affected staff that layoff decisions are purely clinical at the business level, and does not question their competency.
Additionally, Roberts said: “It is also important that they take on a more empathetic stance and provide staff with not just the basic financial aid to help them sail through the next couple of months, but also provide them access to counsellors to manage equations, as well as assist wherever possible with alternate job opportunities in the market.”
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