Tech Layoffs and Hiring Freezes in 2022: Should You Be Worried?
The IT industry that boomed up during and defied the odds of the Covid-19 pandemic in terms of being quick to adopt the Work From Home (WFH) or a hybrid model of work, now seems to be facing the challenge of massive layoffs and hiring freezes. It sends a shockwave to all corners as the industry is taking such a step after several rounds of expansion. According to reports, the escalated issue is going to affect asset-heavy, low-margin, hard tech, and other such companies. However, the ongoing massive spree of layoffs doesn't seem to be limited to early-stage startups as tech giants like Netflix, Microsoft and Meta are also feeling the heat of the same.
Experts have shown their concern over the massive layoffs and hiring freezes as these are going to lead to a situation of increased unemployment. The idiom 'There will be blood on the streets' completely fits the current situation as the list of companies saying 'Goodbye' to their employees, keeps on increasing, raising the tension of market analysts as the economies will also face turmoil and consequences of the step that is being taken by the tech companies. The trend shows a halt in the years of expansion and hiring by the companies.
Companies That Have Said 'Bye Bye' to Their Employees:
Showing an increasing trend, the layoff list keeps on increasing with the addition of new companies and more layoffs by the companies that have already initiated the process. As per the reports, by August, over 37,000 workforces were laid off by over 150 companies based in the United States (US). The names include the giants in the industry. Although, the layoffs are only limited to one country, rather companies across the globe are taking the harsh decision.
Tencent which is a Chinese multinational technology and entertainment company laid off over 5,500 employees from the payroll in the last quarter. This was considerably the first major layoff in a decade by the company.
Reportedly, one of the major players in the Silicon Valley, Microsoft has laid off over 1810 employees as of now. The layoff includes the Modern Life Experiences which was a team of over 200 people. The team was responsible for focusing on professional consumers and was formed in the year 2018.
After Microsoft, another major layoff was carried out by Shopify which 'bid adieu' to over 1000 employees in the month of July. Reports suggest that most of the layoffs happened in recruitment, staff, and sales departments. Adding to the list, the popular OTT and streaming platform Netflix showed its doors to over 450 employees of the company citing a sharp decrease in subscriber count. The company laid off over 150 employees earlier in May as well.
This is the least forgotten company that had chosen the most modern way of laying off its workforce, Better.com. The company had been on a layoff spree for quite a while now. As of now, it has laid off over 4,500 to 4,700 employees, according to the standard sources. Well, this is not it! The company is expected to carry out the layoff process again, the number of layoffs in this round might stay around 250.
The next name on the list is the US-based camera and social media company Snap, which has laid off more than 1,280 employees. Snap is the parent company of the social media platform Snapchat. The company has reportedly taken the step to reduce costs. In addition, the reports suggest that the company may lay off more than 6,400 employees in the upcoming months.
Popular microblogging platform, Twitter has laid off over 100 employees, reportedly in a bid to cost-cutting. On the other hand, Apple has also carried out layoffs for over 100 employees. While Meta has terminated over 60 contract workers from Accenture. Also, as per the reports, Meta is planning to shift its work to Singapore and that might result in another round of layoffs with over 600 workers at Accenture losing their jobs. Plus, HCL Technologies has laid off over 350 employees working on Microsoft’s news-related products.
What is 'Hiring Freeze'? 'Hiring Freeze' occurs when a company or a business decides to halt or stop the hiring process usually temporarily in order to manage its costs. The cost-cutting can be the result of inflation, financial crisis, or similar issues.
Apart from this, some of these companies have announced a hiring freeze as well and the names include, Google which has extended its hiring freeze, Meta, Coinbase, and Wayfair. Other companies on the list are either planning to announce a hiring freeze or slowing down the process of hiring.
Also Read: Meta 'Quietly' Begun Layoffs in Cost-Cutting Bid
In terms of India, over 12,000 employees who were working in leading startups like Unacademy, Byju's, Ola, etc. have been laid off. Unacademy has laid off over 1,150, employees, while Ola and Byju's have laid off over 500, and 550 employees respectively. Also, MFine has cut over 600 jobs, followed by Cars24 which also laid off over 600 employees.
Why Companies are Laying Off Employees?
After seeing the state of massive layoffs, the question that arises is, why these companies are suddenly carrying out layoffs at a large scale, and what is forcing them towards cost-cutting?
Although, there are several reasons behind the massive layoff in the tech industry. However, one of the major reasons that are being cited is the tightened monetary policies by the central banks across the world as well as the correction in equity markets. Also, the increasing attrition rates and their repercussions are being termed as a response element to the ongoing massive layoffs. The increasing attrition rate across organizations has led to an increase in employee costs. For example, pay hikes, and other expenses.
Who All Should be Worried and How to Be Prepared For the Mishap?
The trend that was started by Microsoft and followed by other major companies, continues to on. If anyhow, you feel that your company is going to take a harsh decision and you think you can be among laid-off employees, what you can do is apart from preparing yourself financially with savings, should start updating your resume, optimize your LinkedIn profile, and research opportunities available for yourself. You should already be prepared for such a crisis and know how to deal with a layoff situation so that won't become a last-minute hassle and panic. Also, in such a scenario, upskilling is always a good option and you can always take out some time from your schedule to learn new advanced skills via various online or offline platforms.
Also Read: 7 Skills That Will Pay Off Forever
What is the 'Attrition Rate'? Attrition Rate which is also known as 'Churn Rate' can be defined as the rate at which employees leave an organization. It can be seen as an average of employees leaving an organization. This can occur due to various circumstances such as resignation, termination, death, or retirement