21 November 2022 00:03:56 IST

The difficulty of layoffs and losses

Letting go of failing businesses and layoffs will be impossible to prevent going forward. It’s time we adapt. | Photo Credit: Getty Images

I was feeling gloomy all of last week. Perhaps it was because India lost the T20 cricket semi-finals or the recruiter in me was cast in despair by the series of layoffs announced by many marquee brands. On cricket, I told myself I would stop watching the game. On layoffs, a friend’s comment that people should not join companies that have a history of retrenching people struck a chord.

We once had to shut down a few offices and retrieve from a low-margin business. Two of our leadership team offered to resign, almost like a protest though their job wasn’t on the line. Why do we react with such extreme emotions to some of these inevitable circumstances of work and life using success or winning as the only barometer of existence?

Seduced by success

Do you remember the opening question of the famous interview with Samuel Bankman Fried, the founder of the now-infamous crypto currency exchange FTX? The interviewer Adam Fisher started by asking, “Am I talking to the first trillionaire?”

For convenience, let’s blame society and academic setups for focusing on material success. We celebrate the setting up of new enterprises, massive funding rounds, large-scale hiring, and IPOs as marks of success.

At the same time, we react even more emotionally when things go south. We want heads to roll, whether at workplaces or in sports, when certain expectations aren’t met, however, complex the context be. Our mindset is very much represented by what a Venture Capital partner once told me. He said, “Though we know that 95 per cent of the start-ups fail, every new entrepreneur we invest in, we think this founder will hit the ball out of the park.”

What’s wrong with layoffs?

If a company is losing money or has a bleak future outlook, would you blame it for laying off people? Yes, mass firing over Zoom or WhatsApp is challenging to comprehend. But the logic of layoffs isn’t!

History suggests that companies that were agile and laid off people timely are still among the Fortune 500 list and continue to attract talent. Many of them are still ranked as great places to work. A Fortune compilation of the largest layoffs in the last two decades lists IBM, Citi, General Motors, AT&T, Ford, Boeing & Bank of America among the top ten.

These are employers that many still aspire to work for. Corporate America has traditionally been brazen while announcing layoffs, just like start-ups in India currently. Did you know that Meta, Snap, Intel, and Microsoft’s stock price has climbed since they announced layoffs?

This has always been the case, as enterprises have understood the hack to play to their shareholder interests. As employees, some of us may complain about being inhuman or capitalistic. Therefore, let’s jog through our memory lane a little.

The jobs boom

Not too long ago, tech employees ghosted their future employers, traded multiple job offers, demanded 100 per cent plus hikes, jumped notice periods, resigned over WhatsApp, and moonlighted. It would sound sadistic to say that karma is coming back in the form of multimode layoffs. When we embraced the upside of the job boom not too long ago, should we not accept the current downside of layoffs too?

Of course, layoffs do leave an undeniable mental scar of rejection. But with every downside of a job market, an upside is always waiting around the corner. US companies added 2,61,000 workers in October, beating analysts’ expectations. The forecast is that the first quarter of 2024 will be boom time again for job seekers. It’s time we made peace with the cyclicity of hiring boom and layoffs.

The pattern

If you carefully process the recent layoffs in India there is a pattern. Some of the firms which had fired en masse during the onset of Covid-19 are at it again. Interestingly many of them had scaled up massively post-vaccination and opening up of the markets. One has to recognise that enterprises are fungible to the cyclicity of the economy, and employees have to trade the up and downside of these cycles.

Similarly, some businesses not taking off or shutting down shouldn’t necessarily mean that the people involved can no longer take on new roles. Interestingly, many leaders who turned around their new employer’s fortunes were shunned by their previous organisations forcing them to leave.

New mantra

If I am an employee today, it’s essential to recognise that employment, performance, promotions, payoffs, and layoffs are transient in many ways. Just like some of us who failed during school/college would remember, all we can do is prepare better for the next exam and not get stuck in the failing experience.

Losing a match, letting go of failing businesses, and retrenchment will be impossible to prevent. But, unfortunately, just like job growth, layoffs are here to stay. It’s time we make peace with that than making it a taboo!