A Season of Layoffs

The past few months have witnessed several reports of employee layoffs in India and beyond. During the pandemic people suffered not only with the disease but its devastating aftermath on the economy leading to a severe stress on employment. There were major layoffs and job losses and an unprecedented situation prevailed, never seen by the existing generation. However, post the pandemic, Business was returning to the usual and though Covid still persisted, normalcy had returned in almost all areas of the economy across the world, leading to a positive spurt in employment. But this sudden spate of layoffs particularly by big tech companies, Edtech ventures, online retailing in particular has given some serious food for thought and even as I write today a few companies have laid off people as per reports in the press.

Google, the tech giant of the world and one of the most sought after companies to work with have warned their employees of major layoffs if business figures do not match up to expectations in the second quarter of this year ( July – September). Sighting  sluggish growth due to strong economic headwinds and a possible recession amidst a fall in demand, Google executives have in no uncertain terms very strongly conveyed a difficult scenario ahead and have asked their own employees to brainstorm and suggest ideas for improving productivity.  However, giants like Meta, Oracle, Microsoft , Über etc have not held back action like Google, but have already pulled the plug on several employees.

As far as India is concerned some major layoffs have been witnessed in the Edtech sector. Online education giant Byju’s after a massive campaign in the country for its online education products has already started laying off employees in large numbers . Other companies in the online education sector like Vedantu, Unacademy and Lido( already have shut shop ) have also laid off  several hundred  employees. Meesho, the new entrant in retail online marketing too are laying off employees. There are other startups too who have jumped on the layoff bandwagon. The situation is worrisome.

Is Layoff the only option ?

A layoff may lead to several issues in the life of the employee if he/she is unable to find a job decent enough to have his/her EMIs  served without a break and to keep his other recurring expenditures going. There can plenty of options depending upon the type of industry, the scale of the company, the financial challenges etc., in lieu of layoffs or(  if the going is very tough )   to delay a layoff programme. Some of my suggestions are listed below

1. In-house mentoring of employees so that they can be placed in other departments and roles may be an easy and inexpensive option. Operations/Technical/Manufacturing staff may be redeployed into marketing and vice-versa depending on the challenges faced by the company. Being  multi skilled will help the staff  remain employable.

2. The company should involve employees and brainstorm for innovative and creative ideas to improve productivity, efficiency and performance in general of the company ( The way Google has reached out to its employees). This may lead to some great options and help the company recover from a crisis.

3. Having a relook at marketing and advertising expenditures. This is a major expenditure nowadays. Reigning them considerably may be an option in the short run.

4. Working from home or deploying a  hybrid system would also reduce pressure on infrastructure expenditure. Renting out unused space might be an option too.

5. Adjusting growth and profit targets to match the pressures from the external environment. A highly ambitious and unrealistic target may lead to dissatisfaction amongst the stakeholders if not achieved, culminating into knee jerk reactions like employee layoffs.

6. Renegotiating salary packages with the employees and curtailment of perks etc. instead of a decent severance package may still  help save cash.

7. Leave of absence ( furlough ) may be worked out with employees. A month or two of unpaid absence would reduce expenses considerably.

Notwithstanding the options above, sometimes Layoffs become absolutely necessary and it would not be prudent enough  to lose an organisation or business for an employee.  My intention is just to put forth my view that we need to make sure that layoffs should be the last alternative and be put in action only after exhausting all other options. Layoffs should not be the easy  way out.

We have always been taught in Management lessons that  people are  the greatest asset of a company and that they should be nurtured and developed in order to ensure a strong and progressive organisation. However with layoffs galore, this management lesson appears a bit outdated.

Nevertheless, I think it’s time we revisited some  of the good old wisdom.