Trends

Layoffs And More To Come 2024; The Unsettling Trend Sweeping Across Industries From Big To Startups, All Sectors Feel The Heat

In the new year, the shadow of the previous year continues, and the spectre of layoffs has emerged as a sobering reality, casting a loom of uncertainty over companies large and small. From corporate titans to fledgling startups, no sector remains immune to the disruptive forces reshaping the global economy. The resounding echo of job cuts reverberates through boardrooms and cubicles alike, emphasizing the pervasive challenges confronting organizations worldwide due to geopolitical upheavals to the more opportune AI integration, which again casts a shadow on many roles within industries; the only choice is upgrade!

As the new year unfolds, a cloud of uncertainty looms over both established corporations and burgeoning startups alike. 

The unsettling trend of layoffs has intensified, sending shockwaves across various sectors, from tech giants to retail giants, echoing the growing economic challenges and market shifts.

In a distressing cascade of announcements, prominent names such as Alphabet, Amazon, Citigroup, Ebay, Macy’s, Microsoft, Shell, Sports Illustrated, and Wayfair have disclosed significant job cuts. 

However, the wave of layoffs extends beyond corporate behemoths, penetrating the startup sphere, with companies like Swiggy, Flipkart, and Paytm slashing sizable portions of their workforce.

Adding To The Mix

Adding to the distress, the $245 billion Indian information-technology (IT) industry, long regarded as a pillar of stability, now finds itself grappling with the harsh reality of downsizing. 

Wipro, a prominent player in the Indian IT sector, is reportedly contemplating substantial job cuts, particularly targeting mid-level employees. 

The rationale behind such measures stresses a quest for improved margins amidst evolving market dynamics and geopolitical uncertainties.

layoffs, wipro, citigroup

AI Integration

The industry’s plight is deepened by the encroaching influence of artificial intelligence (AI), which not only reshapes operational paradigms but also disrupts traditional roles, intensifying the pressure on human resources (HR) professionals and job seekers alike. 

The ‘Tech Layoff Journey’ narrative unfolds as companies, once heralded for their rapid growth and innovation, now confront the sobering imperative of streamlining operations and enhancing efficiency.

Amidst the tumult, employees grapple with the abrupt termination of roles they once viewed as secure. A Flipkart employee, reflecting on the sudden upheaval, lamented the disconcerting nature of their exit, echoing sentiments shared by many facing similar circumstances across the industry.

The ripple effect of these layoffs extends far beyond individual employees, accentuating broader challenges within the economic landscape. 

As companies undertake restructuring endeavours in a bid to weather the prevailing headwinds, questions linger about the long-term implications for employment stability and market resilience.

The ‘New Trend’

In a challenging market environment, the recent wave of layoffs has heightened the already daunting prospects faced by job seekers, particularly in the aftermath of the robust hiring spree witnessed in 2021, primarily driven by startups. 

The prevailing sentiment among employees remains far from optimistic, with dwindling job security casting a pall over workplace morale. 

Amidst this backdrop, individuals rendered jobless in recent months grapple with the arduous task of securing employment, often resorting to salary cuts and venturing into unfamiliar sectors to secure a foothold in the job market.

According to Anshuman Das, the co-founder and CEO of talent solution provider Careernet and executive search firm Longhouse Consulting, the dynamics of job shifts in the startup sector have undergone a stark transformation. 

In 2023, the predominant trend saw job transitions accompanied by salary adjustments ranging from a 30% reduction to a 20% increase.

This marks a significant departure from the previous years, where job shifts in 2022 entailed salary hikes of 10% to 50%, and in 2021, the increments ranged from 30% to 80%. 

Hence, this dynamics spotlights the challenges faced by job seekers in securing lucrative opportunities amidst market fluctuations.

Reflecting on their own experiences, individuals who weathered layoffs recount the formidable hurdles encountered in their quest for employment. 

A former employee of edtech firm Byju’s, who faced redundancy in July 2023, disclosed the protracted ordeal of securing a new position, attributing the prolonged job search to the limited availability of roles aligned with their previous employment. 

Similarly, another individual, laid off by hyperlocal delivery firm Dunzo in January 2023, narrates a journey marked by uncertainty, albeit eventually securing a role within the quick commerce and food delivery sector. 

Despite the challenges, the expanding operations of companies like Swiggy and Zepto provided a glimmer of hope for those with relevant experience in operations.

However, even for those who managed to evade the axe of layoffs, the survival remains fraught with challenges. 

A former employee of Dunzo recounts the distressing ordeal of enduring irregular salary disbursements, with the firm capping salaries and withholding payments for months on end. 

The pervasive atmosphere of uncertainty and financial strain left both laid-off and retained employees grappling with the enduring fallout of the company’s tumultuous trajectory.

Identifying the Vulnerable Employees at Risk in 2024

If the initial month of 2024 serves as any indication, major employers across America, fresh from the extensive layoffs witnessed last year, appear poised to continue downsizing. 

Recent weeks have seen a string of announcements from notable entities including Alphabet, Amazon, Citigroup, Ebay, Macy’s, Microsoft, Shell, Sports Illustrated, and Wayfair, all unveiling plans for job cuts.

The latest development came on Tuesday, with United Parcel Service (UPS) revealing intentions to eliminate 12,000 positions while mandating a return to in-office work schedules, five days a week.

These layoffs unfold against a backdrop of economic ambivalence.

On one hand, US job openings have surged to a three-month peak, and stock markets hover near record highs, prompting discussions of a potential economic soft landing. 

Conversely, the cascade of high-profile job reductions injects a sense of uncertainty into the white-collar realm, where concerns about recessionary trends and the encroachment of generative artificial intelligence pervade commonplace discussions. 

Additionally, the increasing pushback against remote work further fuels apprehension among employees.

Ariel Schur, CEO of ABS Staffing Solutions in New York, observes the ripple effect and fear permeating the job market amidst these developments.

As individuals grapple with job insecurity, economists, recruiters, consultants, and career coaches nationwide offer insights into the current job market and strategies for navigating its complexities. Unfortunately, it is middle managers and remote workers who emerge as particularly vulnerable demographics.

Daniel Zhao, lead economist at Glassdoor, notes that middle management often bears the brunt of layoffs as companies strive to streamline operations. Middle managers find themselves caught in a squeeze, tasked with implementing efficiency measures while simultaneously facing the threat of redundancy.

Simultaneously, the current wave of layoffs stresses the precarious position of remote workers. 

Reports suggest that employers may disproportionately target remote staff amid efforts to transition back to in-office work environments. 

Schur emphasizes the ease with which remote workers can be let go, citing the lack of daily interaction as a contributing factor to their vulnerability.

George Penn, managing vice president at Gartner, outlines the key considerations for companies contemplating layoffs, emphasizing the bottom-line impact of individual employees. Those unable to demonstrate immediate or future profitability for the firm may find themselves at heightened risk,

Preparation Strategies for Uncertain Times

In the face of mounting uncertainty, Daniel Keum, associate professor of management at Columbia Business School, offers a straightforward directive: show up. 

Keum stresses the diminishing era of remote work, cautioning that roles easily conducted remotely may be susceptible to relocation overseas. Emphasizing the importance of commitment, he urges employees to demonstrate their dedication to the job.

Executive coach Monique Valcour echoes Keum’s sentiment, highlighting the significance of maintaining quality interactions in the workplace amidst uncertainty. 

Rather than succumbing to speculation and organizational gossip, Valcour advises employees to cultivate strong relationships with management, prioritize existing commitments, and embrace forthcoming changes.

Navigating the Storm; Understanding the Layoff’s

Despite the unsettling nature of recent layoffs, economists suggest that workers need not be unduly alarmed, provided current economic trends persist. 

Heidi Shierholz, president of the Economic Policy Institute, notes that while layoffs have impacted white-collar professions like finance and technology, blue-collar jobs have remained relatively stable.

She contextualizes the layoffs as a routine aspect of the labor market, underscoring that overall layoffs and unemployment insurance claims have not surpassed pre-pandemic levels.

George Penn, a workforce planning advisor, emphasizes the cyclical nature of layoffs, particularly during the year-end period when companies adjust budgets and realign priorities for the upcoming year. 

He notes that some layoffs stem from overhiring during the pandemic, with firms now recalibrating their workforce to match current needs.

The Influence of Cyclical Factors

Moreover, some layoffs appear tied to prevailing economic conditions, characterized by high interest rates with expectations of future decline. Keum observes that firms are repositioning themselves for growth amidst this uncertain climate, with every division seeking expansion despite the elevated costs associated with high interest rates.

Importance of Understanding the Startup Sector

Sanam Rawal, founding partner at talent advisory firm MetaMorph, emphasizes the necessity for employees to gain insight into the dynamics of startups at different growth stages and the associated risks inherent in the sector. 

He states the importance of awareness amidst the evolving startup culture.

Moreover, Rawal notes that the job market has adapted to the prevalence of mass layoffs, suggesting that being laid off is no longer as stigmatized as it once was. 

This shift reflects a changing attitude towards employment dynamics and underscores the need for individuals to navigate career transitions with resilience and pragmatism.

Evolution of Layoff Trends

Harold D’Souza, co-founder and director at WalkWater Talent Advisors, highlights a shift in the nature of layoffs observed in 2023. 

While previous layoffs were often linked to firms scaling down amid funding constraints, the latest wave is characterized by a focus on cost-cutting measures, despite the financial robustness of these large firms. 

D’Souza suggests that companies like Flipkart and Swiggy are adopting strategies akin to traditional tech giants to manage costs in a challenging economic environment, signaling a departure from the typical startup ethos.

Similarly, Anshuman Das notes that many of the current layoffs serve as a correction to the inflated salaries and benefits that characterized startup hiring in recent years. This adjustment reflects a recalibration of compensation structures in line with market realities.

Responding to Layoffs

In response to layoffs, a senior executive from a large, growth-stage startup reveals that senior management is exploring re-hiring for affected roles at reduced salaries. Perhaps the approach is the need for flexibility and cost-consciousness amidst shifting economic conditions.

 

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