The year 2022 in review: Capturing the highs & lows of the year of layoffs

Authored by Shiva Bhavani, CEO & Founder of Wing Communications

The infamous Ukraine-Russia war led to an economic crisis, affecting all those people who are not even participating in the hostilities. Resulting in a huge spike in gas prices, deterioration of conditions, and recession and thus affecting thousands of people. With the global economic headwinds, many companies reacted to the fear of recessions & put brakes on hirings. Furthermore, inflation, supply chain problems, and geopolitical turmoil curbs growth for companies and resulted in mass layoffs. 

Layoffs are one such side effect of such conflict. Industries started to conduct layoffs to cut the sales margin and ensure the profitability of their ventures. From big business houses to start-ups, all hired abundant people during the pandemic relying on the technology itself. Soon after the pandemic was over, normalcy made them realise to rethink their organisational structure, thus leading to job cuts. 

The year of layoffs was gruesome for employees. The senior professionals & employees were reaching out to placements for their new jobs. Senior Executives that were handsomely paid were open to 20-40% cuts in their pay. For instance, one of the top executives at an ed-tech company was paid 3 crores plus in hand, he was ready for a pay cut in salary. On the other hand, Upgrad Co-founder, Mayank Kumar stated mostly five to seven senior executives are reaching out to him for job opportunities. So, they will be placing 1000-odd professionals in sales for the next quarter. BrightCHAMPS Senior Director, Kanika Mendiratta had said that the company is likely to get to a total strength of 5k in the coming year. 

Some tech companies that announced layoffs in the year 2022: 

• Meta - Mark Zuckerberg, CEO of Meta announced 13% of the job cuts. They removed 11,000 employees from Meta. Further, he announced that the layoffs will continue till the fresh hirings in March 2023. 
• Twitter - Twitter Layoffs are what have been in the news in 2022. Elon Musk, while taking over Twitter in October 2022 fired 3700 people taking a toll on the company's workforce. More than 50% of the staff was sacked along with the then CEO, Parag Agarwal and other top executives of the company. The company even shut their offices in San Francisco and London to prevent its staff from entering the office premises. 
• Amazon - Like other big companies, Amazon announced a big cut in their jobs. Amazon announced a 3% cut in their workforce, that's almost 10000 employees around the world. This number is expected to be increasing in January 2023. Amazon CEO, Andy Jessy stated that to streamline their costs, there are several job cuts. 
• Google - Google's CEO, Sundar Pichai told his employees that he cannot promise that layoffs will not happen. Google has asked the officials to announce layoffs to the poorest 6% performing employees of the company. In an aggregate total of 10000 employees are being sacked off. 
• Microsoft - Microsoft has sacked 1% of its employees from their workforce. In the first instance, they fired 1000 people from their offices. In another turn, 200 more employees were removed from their posts. 

Indian Start-up Layoffs. 

The pandemic was a boon for the teacher community, they got a 40-50% hike but soon after the pandemic, their situation became worse. Around 18000 people lost their jobs in 2022 in 52 start-ups. Byjus in this count sacked 2500 people from their company affecting people in product, content, media, technology teams, etc. Unacademy removed more than 1350 people from their teams, & Vedantu removed 1000 people from their jobs in a phased manner. Further, Meesho laid off 150 people from their company. And the count continues to rise and continue. Most of the affected people were tech professionals, sales and marketing personnel, content writers, teachers, etc. Unacademy's CEO, Gaurav Munjal states 2023 will be worse for tech than 2022. 

What's next in 2023?

According to media reports, IT giants Infosys, TCS, HCL and others have suspended hiring from October 2022, intending to lay off campus recruits and weed out underperformers in the coming months. The slowdown in hiring in the IT/ITes sector is having a similar impact on the startup ecosystem. Just as IT/ITes companies were holding back on hiring, so were startups. According to the Monster Employment Index and RazorpayX Payroll reports, employment in the IT/ITes and Startup sectors fell 19% and 61% year-on-year, respectively

Startups may lay off more employees due to the impact of Big Tech layoffs and a massive IT/ITes hiring freeze, as supported by his Pfeffer theory on the layoff contagion. There is also consensus that companies in Edtech, e-commerce, social media and consumer services will be hit hardest. Another interesting takeaway is the epidemic of layoffs in the tech industry. According to Stanford University professor Jeffrey Pfeffer, companies could only fire employees as imitations of other companies. 

Simply put, startups in capital-intensive sectors (e-commerce, edtech, and consumer services), or less profitable segments like fintech, have become business as usual, with attitudes normalised. Before we go back, we need to rethink the basics. Another sign that layoffs may last until 2023 is the current situation in the IT sector in the country. On an end note, these layoffs have been a boon for tech companies. They have surpassed the Great recession levels, which helped the companies to maintain viability in the coming years. 

DISCLAIMER: The views expressed are solely of the author and Adgully.com does not necessarily subscribe to it.