Shockwaves
‘ I am sorry…’ were the words of Sundar Pichai, CEO of Google and Alphabet, in an e-mail to the employees on announcing a mammoth 12000 job cuts. The action, which Sundar Pichai defended as an act of decisiveness borne out of emergent necessities, sent shockwaves across Google and outside. However this is not the only layoff happening. Microsoft, Amazon, Meta and several others have also joined the layoff bandwagon, increasing the total number to almost 50000 people.
Layoffs Unabated
A few months back I had written a brief article about layoffs particularly by EdTech companies in India. However the season of layoffs is not abating which raises a big question on the industry and also on the Tech Giants of the world. There has been major criticism of the recent layoffs, particularly in cases where people had served these Tech giants for years together. Some were removed after contributing for more than two decades. The anger is understandable. The question is, was there a way out.
Stakeholders : Two Facets
Google ( Alphabet ), Microsoft, Amazon etc have been known for their exemplary work cultures and the stability they bring to their employees. An economic downturn might have started to push its nose, but the fact is that these companies have been making a boat load of profits. So how come a bit of an economic storm has led to such sharp decisions. I agree that stakeholders in these Giants may not settle for less and push for continous growth and enhanced value of their stake, but the employees are critical stakeholders too. So how can one stakeholder benefit from the loss of another, is something which needs to be pondered about. A bit of a hit on the stocks are not going to bring the heavens down.
The Buck Stops Here
Sundar Pichai has also said that he takes responsibility for his actions and that following the layoffs there would also be bonus cuts and trimmed salaries for the top management too. In my opinion this should have been done first and before contemplating layoffs. The decision makers in a company without doubt have to take responsibility for their actions. The buck stops here and on occasions it becomes imperative to self regulate rather then put the blame on the employees who execute decisions taken by the top. We tend to forget very easily a critical management mantra that employees are the biggest and the most important asset of a company.
Thoughtful Hiring
Hiring should also be an exercise which should be given the deepest of thought. It would be detrimental to a company if they take in more than they can chew. The layoffs certainly have brought a loss in morale of the ones retained, as they too fear a sword hanging on top of their heads. This will affect the company only. Hiring therefore has to have a long term perspective and should never be a knee jerk or a short term decision. Hiring should be a long term relationship. The longer you stay invested in an employee the more benefits you will reap.
Loyalty
Another important factor which has come out in these recent layoffs is whether companies value employee loyalty, with many questioning if loyalty is restricted to the domain of the employee only. In my view its both ways and there are institutions who reciprocate loyalty in good measure. But since employees who had given the best years of their lives find themselves laid off, then questions will surely be asked of the employer, be it Google or Amazon.
Some Considerations
Laying off employees should be the last resort after exhausting all possible options. Cutting down on bonuses, salary shave offs, restricting extravagant advertising expenditures, reducing costly rentals, curtailing capital expenditures, calibrated hiring, lowering of expectations and mellowed down targets, and the gumption to take a hit on the stake values etc., should be evaluated before focusing on the removal of the hapless employee.
Good Luck Xooglers ( ex-Googlers ) !!
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Featured Image : Sundar Pichai / photo courtesy Inc.Magazine
That’s a rational take on the issue…fully agree 👍
Thank you Sid
While layoffs are a cause of concern for employees, they may be genuinely necessitated to bring about a faster and quicker transition or adaptation to change. These can indeed help the businesses to manouvre increasing returns to shareholders. So taking advantage of new technologies and/or innovations can result in slimming down on labour costs , increasing output and efficiency.
So while one can certainly agree with the concern Riz Khan voices in this write-up on lay-offs, those in the driving-seats of businesses in today’s reality and competitive environment face truly very difficult options.
The point is well taken. Appreciate