In 2012, a wave of layoffs swept across various industries and companies worldwide, leaving thousands of employees without jobs. These layoffs were a result of economic downturns, mergers, acquisitions, and restructurings. This in turn led to a recession. The recession led to reduced consumer spending and lower corporate profits and layoffs. These had a significant impact on the lives of many, their families, and their communities.
It’s 2023 and we are seeing the news filled with much of the same tone and sentiment and news but the brands are many that have never had layoffs before. 395 tech companies with 108986 employees laid off at the time of writing, according to layoffs.fyi. In 2022, there were 1,535 layoffs at tech companies w/ 241,176 people impacted according to a similar tracker site trueup.io
In 2022 Morgan Stanley start with announcing a workforce reduction by 2%, Buzzfeed (12%), and PepsiCo plans for “hundreds” of jobs cut, Redfin (13%), Lyft (13%), Stripe (14%), Snap (20%), Opendoor (18%), Meta (13%), and Twitter (50%).
Sandra J. Sucher and Marilyn Morgan Westner wrote in What Companies Still get Wrong about Layoffs and also in A better, Fairer Approach to Layoffs in HBR about how short-term cost savings achieved through layoffs are often overshadowed by bad publicity, loss of knowledge, weakened engagement, higher voluntary leavers, and reduced innovation — all hurtful to long term profits.
Layoffs are a harsh reality of the business world, and while they are often necessary to maintain the financial viability of a company, they can be incredibly damaging to those who lose their jobs. The impact of layoffs goes beyond the loss of income; it can result in a loss of self-worth, a sense of isolation, and a feeling of betrayal. Many employees who have been laid off find it challenging to find new jobs in their fields, and the loss of benefits, such as healthcare and retirement plans, can have long-lasting effects.
The 2012 layoffs were particularly devastating because they occurred during a time of economic uncertainty namely the global economic downturn that had begun in 2008.
Many people were already struggling to make ends meet, and losing their jobs only compounded their difficulties. The layoffs affected a wide range of industries, including manufacturing, finance, and technology companies such as the Bank of America, retailer JCPenney, and tech behemoth Yahoo.
Many companies also faced increased competition from emerging markets, which put additional pressure on bottom lines.
The trend of mergers and acquisitions around that time, focused on increase efficiency and reduce costs, which often meant eliminating redundant duplicative positions and streamlining operations.
Of course, some companies laid off employees as part of a broader restructuring plan, a necessary position for any company focused on future growth or to address specific challenges, such as declining sales or a shift in consumer demand.
Layoffs are a difficult but necessary reality in business, but companies have a responsibility to treat their employees with respect and dignity during the process; often this is not the case. HR departments and managers are often quite poorly equipped to deal with layoffs.
Part of the approach of any layoff is to provide clear communication about the rationale for layoffs, offering outplacement services to help employees find new jobs, and providing fair severance packages accompanied by empathy and respect. Companies that handle layoffs poorly risk reputation damage and loss of trust among the “survivor” employees and of course the impact on customers. Unfortunately more than ten years later we’re seeing some of the same mistakes being made in the way layoffs are being handled.
The memory of 2012 is perhaps still clear and present in the minds of many that were impacted and some are seeing this again today. with the current round of layoffs. They’re all a painful reminder of the fragility of the job market and the importance of preparing for economic uncertainty.
One cannot help feeling that the root cause of a lot of these layoffs is tied to poor planning and organizational management, but there may be a more opportunistic seedy underbelly to some of the layoffs.
It’s likely that we’ll see a number of cascading effects, particularly among employees who have been hit twice by economic downturn layoffs and of course among those for whom this is the first time they have ever been laid off.