- Recent layoffs at Meta are a sign that some employers are willing to make recurring cutbacks.
- That’s a change from a “big cuts” mentality.
- A talent advisor argued that ongoing layoffs hurt morale and aren’t a solid long-term strategy.
The hashtag affixed to Andy Welfle’s LinkedIn photo says it all: #sickofthisshit.
Welfle wrote earlier this month that he was laid off from Microsoft after only nine months. He’d previously spent nine months at Cruise before being laid off.
His dual layoffs might have been worse than what many others experienced, but Welfle is hardly alone in getting hit by what appears to be some employers’ penchant for regular layoffs, particularly in Silicon Valley.
One of the latest examples is Meta, which said on Wednesday that it was rejiggering some of its biggest businesses, resulting in lost jobs at Instagram, Reality Labs, and WhatsApp.
It wasn’t clear how many roles were eliminated. A Meta spokesperson told Business Insider on Wednesday that the company was looking for other positions for affected workers.
After shedding workers in sweeping layoffs in late 2022 and early 2023, many tech companies are taking a more methodical, department-by-department approach to making cuts. Major firms including Google, Amazon, and Microsoft have announced sizable reductions followed by more modest trimming.
Take Google. The tech giant’s parent company, Alphabet, began 2023 by cutting some 12,000 jobs, or about 6% of its workforce. It followed that with smaller reductions this year.
Art Zeile, the CEO of the tech-career marketplace Dice, told BI that some of the biggest companies in the industry had determined that certain departments were no longer sufficiently profitable and that they needed to redirect resources to growth areas like artificial intelligence.
“It is a shifting of bets,” he said, adding that this routine trimming of jobs here and there is the new normal — for now.
Unsurprisingly, even with growth in some areas, the drip-drip of reductions in the past couple of years appears to be making some tech workers nervous. In a June survey from Indeed that involved more than 1,100 US tech workers, 40% of respondents said they expected to be affected if their company conducted layoffs. Seven in 10 said they’d start looking to other employers if their company laid off workers.
A costly decision
Linsey Fagan, a senior talent strategy advisor at Indeed, told BI that most of the recurring layoffs were in tech. That’s likely because many companies in the industry grew quickly during the pandemic and are still adjusting.
But those recurring cuts don’t come without costs, Fagan said.
“It’s definitely not a sustainable strategy,” she added.
Fagan said employee sentiment starts to drop before a layoff as workers suspect cuts are coming. After the layoffs, workers’ feelings about the company — and a CEO’s acumen — take “a long-term dive,” she said.
“When you look at a business trying to come back from that — if they’re continuously laying off, it simply can’t happen,” Fagan said.
Even smaller-scale layoffs can make workers jittery, she said. Fagan added that the rise of technologies like generative AI and the threat of layoffs were pushing many in tech to build their skills.
Tech workers looking for jobs on Indeed, she said, are now more likely to apply to staffing firms, which might offer temporary gigs, or to roles in areas like healthcare than to tech firms.
Fagan said that while some tech workers are drawn to the flexibility that contingent or part-time roles can offer, tech has historically been the No. 1 industry tech workers want to work in.
“They’re just not feeling that stability right now,” Fagan said.
Why they do it
Some companies’ penchant for regular nips and tucks could be a result of Wall Street’s celebration of that type of trimming.
At Meta, CEO Mark Zuckerberg was “beautifully rewarded” by the market for making cuts, Zeile said, noting a rise in the company’s stock price.
Beyond what investors might cheer, the tech giants are getting older and no longer in growth mode, when their aim was often to snap up workers. Hence, many companies made cuts following the rush of hiring during the pandemic.
Since then, some bosses have been looking to trim the size of their organization and otherwise make improvements. Zuckerberg famously declared that 2023 would be the company’s “year of efficiency.” He also said the directive would become a feature, not a bug.
It’s not all bad news for tech jobs
Zeile predicted that investors would eventually look to tech companies to do more than boost profits by trimming costs and would want to see a return to growth. He said hiring would pick up broadly as companies find they have many areas in need of workers.
A company like Meta might be cutting in some areas, but it’s growing elsewhere, Zeile said.
“Meta is actually on a tear right now,” he said. “They’re just no longer hiring VR engineers. They are hiring AI engineers, so they’ve actually boosted their hiring.”
Fagan said a sign that the tech industry might be closer to stabilizing was that, after declining for several years, job postings in areas like software development had remained flat in recent months, though they’re still 30% below 2020 levels. Of course, that means there are fewer opportunities for laid-off workers. Still, she said, it’s an indication that companies are being careful not to hire too many people.
“It’s not like they’re going out and massively hiring and then doing layoffs,” Fagan said.
Welfle, who was laid off from Microsoft, wrote on LinkedIn that he was looking for a content-design role — maybe with a smaller company. He also said some of his feelings were similar to those he experienced after his layoff in December.
“I’m having a hard time disentangling my sense of value and self-worth from my identity as a corporate worker,” he said. “But I’ll definitely be reflecting on that, and finding gentler, more sustainable ways to exist in a capitalist society.”
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