After years of cloud hiring and work-from-home laws, Technology industries are bracing for recession. After Walmart, Google and Alibaba now recall a hiring freeze amidst inflation fear.
Unemployment has still stood to be one of the concerning sidelines that hit the world globally along the covid health crisis. Cutting staff are justified since 1979 when 5% of the Fortune 500 Companies announced layoffs. At the advent of The Great Recession and its Aftermath, leading to 65% resorted to layoffs.
One of the subtle ways for CEOs to signal their power position is by manually hiring and firing workers. The actions are often not judged in the face of- what they do is the best for their companies and their large economy.
Google has recently added its names to the growing list of tech layoffs. Despite optimistic economic signs for America since last year, why are major companies resorting to a hiring freeze? Tech and Retail giants have used an age-old tactic to increase profits by over-putting responsibilities and downsizing.
In the ongoing debate over whether the Recession hits the US Economy, none but the CEOs get affected. It’s the CEOs, not the employees, who should shoulder most of blames after imposing numerous layoffs in spite of strong performance delivery.
Job Layoffs are a trending attitude to cost-cutting
Much of the past centuries have not witnessed employee layoffs until emergencies troubled them to cut costs. It was late in the 1990s when big companies adopted this idea to make even more money.
Big Giant intends to downsize its workforce as a volatile strategy to gain profitable margins. But does it really impact other layers of the workspace and prove to be fruitful?
According to Business Insider, Google will continue to hire for critical roles. Yet the new hiring policy will lead to ‘real vibe change’ as revealed by an anonymous Googler. It is yet to see how the company culture gets impacted by such a decision.
The long-term effects of a Hiring freeze
Aspirants attempting to a big shot in these companies are bleak in their chances of success. Even if the labor market booms the scope of uncertainty exists.
According to Sandra J Sucher, a professor at Havard Business School says “Research shows that layoffs are almost always bad for a company.” Workers eventually look for other jobs because they feel uneasy about staying too long associated with a company.
Unsettled with employee’s prospects they often refuge in shifts as corporate growth. The ones laid off manage to find jobs at competitors and give their careers a boost.
Tesla’s recently fired employees have testified going to competitors like Amazon, Rivian, Microsoft, Apple, and Lucid Motors as cited by Electrek.
Downsizing workforces to even 1% can seem like a good strategy for shortcomings. In the long run, the existing staff who had survived the job cut experience a decline in their performance and job satisfaction, moreover leaving for better opportunities.
Also Read: LinkedIn, Microsoft, Netflix Adds to Growing List of Layoffs
Conclusion
Layoffs can lead to a 31% increase in voluntary turnovers, according to a study. However, if this happens to numerous workers, the economy is put on a ripple effect as employed staff cut back adjusting to their new realities.
The rest either leaves the labor force or find themselves working for growing start-ups. This bad strategy is often scrutinized as poor management because consumer demands get jeopardized at the cost of profit controls.
The Washington Post found in December 2020 that 45 of the 50 most valuable publicly-traded companies turned a profit between April and September 2020, and also that at least 27 of the 50 implemented layoffs over the same time period. In a strange period of 2022, where no one predicts what will happen to the economy, staff cuts are justified by falling share prices, in the face of strong profits.
