25,000 layoffs in one month: 6 big reasons and the way ahead
With nearly 25,000 tech workers being laid off in the first month of 2024, Silicon Valley is crashing down. Here's why it's happening.
More and more voices are reaching the top, articulating their concerns for the growing scale of layoffs in 2024 despite it just being the start of the new year. It's not as if certain brands are subjecting their employees to the job loss mantra. Big names like Microsoft, Amazon and other smaller empires alike are treading in the same direction.
This process significantly started gathering eyeballs in 2022, and hasn't paused ever since. While there isn't a single answer as to why it's happening, a pattern definitely starts setting in place if you study the responses laid out by these big corps.
The Verge put together quite a few of these statements made by the big shots regarding the layoffs. Here are some of them-
Google: “Over the past two years we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.”
Microsoft: “As we saw customers accelerate their digital spend during the pandemic, we’re now seeing them optimize their digital spend to do more with less
Amazon: “This year’s review has been more difficult given the uncertain economy and that we’ve hired rapidly over the last several years”
Why has the number of layoffs 2024 skyrocketed?
- To put a cap on the over-hiring that happened during the pandemic.
- Investors pressurize to cut down on expenses due to the revenue per employee having plummeted in the post-pandemic climate. The ultimate goal is to save company money. High head count doesn't help them with the expenses.
- “There is a herding effect in tech”, NPR reported Jeff Shulman's (professor at the University of Washington's Foster School of Business) statement. The layoffs are seemingly helping their stock price so they're going forward with it. Stock investors are also liking the direction. It's like a contagious vicious cycle. Since everyone is doing it they're getting away with it. Plus, no particular company wants to be singled out by standing out. Therefore, it's just become “the new normal”.Jeffrey Pfeffer aka Stanford business professor, is calling this new surge the “copycat layoffs”, as per which companies of the same industry are mirroring each others' actions. The entire sector is going down. And of course, it also helps in covering up other failed decisions that may not have resulted in fruitful investments or strategies.
- Smaller startups from the tech world are running low on cash and struggling with fundraising.
- Companies prioritizing new investments in generative AI.
- January was the first month of the year - so reorganization and restructuring is happening.It's the cumulative result of all these factors being latched together that's giving way to these massive layoffs. A single one of them alone can't justify the great shedding of numbers.
How to find the way ahead of these layoffs in January 2024
Manage your network - “Networking is a two-way street” - (including your former colleagues, family, friends, acquaintances and even some others): While it's natural for one to feel flustered and not be able to bounce back instantly from the devastating blow, you need to share the news. Go as far and beyond as possible. Use the booming means of social media to spread the word - it may just be the very platform that helps you land another break.
Moreover, how you handle and articulate your experience when seeking new opportunities will also go a long way in determining the next chapter of your professional life. While it is essential for you to vent, you shouldn't count on public postings (LinkedIn and so on) for that. Many job recruiters study the potential employee's public platforms before giving them the green light.
Manage your emotions just as well as you will your finances. This is a character-defining moment for you, so take charge of your narrative and redirect your focus to the future.
You may even try to seek guidance from a trusted experienced senior from your previous job. Not only will this work as an emotional support for you, but will also help clear your mind. This is the time when you should be making well-informed decisions.
File for unemployment: Do this right away without a second thought. To ease the financial burden and to be able to receive your benefits faster, file the claim as soon you find out about being laid off. In the meantime, gather all the necessary documents, like proof of unemployment, needed for the official procedure to go through.
Prioritize self-care: You've been laid off, which means that your previously listed health insurance associated with the job will be lost too. Visit your doctor asap, and stop delaying the appointments you've been pushing back for so long. At this time, it's essential for you to make the most of what you still have in your palm before you actually lose it.
Your feelings are valid. Allow yourself to feel what you are feeling, but you should also be able to digest the new development in a healthy way possible. Seek the help you need. Therapy doesn't always have to be a privilege for the ones with heavy pockets. Reach out to other free counselling options online. On the contrary, you may also want to check if your company's insurance is valid. If it is, make the most of it before it gets cancelled.
Make financial adjustments in your budget: Arrange your financial needs in a pyramid, thereby ranking them on the basis of their importance. You should be able to track how long you will hold out on your current savings, taking into account that you may not be able to find a new job immediately.
