The 2022s will be known for mass layoffs. The world has entered a recession and many companies are struggling to find ways to make money. In response, many companies have shifted their focus from selling products and services to offering additional benefits and perks in exchange for employees’ loyalty.
In an effort to keep employees happy, many companies have given ample promotions and salary hikes in 2020 and 2022, while others have shifted the majority of their workforce tasks to automation and are making people lose their jobs.
There is a new generation of companies that are killing their own employees. They call it “lean” and it is an obsession with getting rid of people.
The trend is affecting every industry, from manufacturing to healthcare and finance. In 2020, they gave abundant promotions and salary hikes, and this was and this was after 2 years of not even accepting people into the company.
AI over people
Many companies have been doing this for a while, but the AI revolution has brought it to a new level.
First, they make workers deploy and make automation tools and later fire them when the purpose is fulfilled and cost is saved.
This is where we are headed: to the day when most of the work that people do for a living will be done by computers. This does not mean that all work will be automated or eliminated. Most of today’s work will be automated, and most of tomorrow’s work will be automated too.
This is happening right now in many industries, but it will accelerate in the coming years as more and more companies go through this process and learn from their mistakes.
These “big MNCs” were hiring hundreds of people every month, and most of them did not last more than a year. The company had an average employee retention rate of less than 6 months.
Most people quit because they felt like they were not being treated well or because they wanted to explore other opportunities.
The company had many high-performing employees who were dedicated to their work and were extremely productive, but it was almost impossible for them to stay at the company because they were always being passed over for promotion or given fewer opportunities to learn new skills.
The company is restructuring and has no longer been accepting new hires. The employees that were there for over a year and had been given ample promotions and pay raises have been let go.
In this article, we’ll take a look at how these companies are managing their employee base during this recession by shifting them into new roles that may or may not be relevant anymore.
An example case:
The Great Recession ahead
The Great Recession was a global event, but it was especially hard on the U.S., which had the largest economy in the world. The unemployment rate in the United States peaked at 10 percent in October 2009, or roughly 1.3 million unemployed Americans out of a workforce of 154 million people, and a “Deja vu” moment is occurring after 2 years, when the world has seen the worst pandemic and economic crisis.
Most forecasters expected that once the economy started to recover, employers would quickly hire back workers who had lost their jobs during the recession (and those who lost their jobs during previous recessions). But that hasn’t happened—wages have been flat, and hiring has been slow.
In many ways, this is nothing new: Recessions are mostly bad for business and employment growth because they lead to lower profits and higher unemployment rates—something nearly all economists agree on these days.
But what makes this recession different is that it’s been so long since we’ve seen a major recession—more than six years—that most companies have come to accept the idea that there won’t be any quick recovery from one and instead focus on making things work as best they can over time.
It’s not like the company was suffering from a lack of demand for its products. It wasn’t even suffering from a lack of market share. The company’s executives just decided that it would be better for everyone involved if they took advantage of their new-found leverage and cut down on the employee hiring rate.
That kind of thinking is common in Silicon Valley, where startups are constantly trying out new ideas and taking risks. But we’re also seeing it at bigger companies like Facebook, which has been criticized for its treatment of its employees and its failure to make money.
- More broadly, companies are reducing their planned staffing costs for the coming year by eliminating jobs in areas such as accounting and customer support and are looking to hire fewer people or for longer periods, says Dave Gilbertson, vice president of staffing firms. UKG. “All these industries are declining,” he says. “They’re hedging their bets a little bit on who they’re hiring.”
- Many white-collar employers have overcome staff shortages caused by COVID-19. As a result, the composition of the American workforce is now very different, although it has returned to its pre-pandemic size. For example, the leisure and hospitality sector employs approximately 1.2 million fewer people than in February 2020. But jobs in professional and business services grew by more than a million.
- In some of the latter fields, employers are turning to temporary workers, and those positions are usually the first to fall in a recession, says Stephanie Miller, director of talent acquisition and retention at Express Employment Professionals. He saw an increase in listings for 30-to-90-day contracts while the number of permanent jobs levelled off.
- The COVID-19 epidemic is the service industry’s first recession, and it could be bad. It is hard to see how the US can avoid a recession. We might think of the experience of past US recessions to think about how that might go. However, this recession is different from previous recessions in at least some ways. During most recessions, services are essentially acyclical, falling only slightly during recessions.
Retail employment peaked at just under 16 million workers and has now fallen to 15.5 million (February 2020 data). Retail is already suffering and mall closings are likely to accelerate. - The restaurant industry employs more than 12 million workers. Layoffs in this industry are painful because more and more people are cooking at home.
- There are approximately 150 million non-agricultural jobs in total. As of February 2020, the retail and restaurant industries combined accounted for more than 18% of all non-agricultural workers in the United States. Almost one in five American nonfarm workers work in these two sectors alone. If we include more than 130 million workers in the service sector, they account for 86% of non-agricultural employment. In contrast, the entire auto industry, including parts manufacturing, employs less than 1 million workers, which is less than 1% of total employment.
- Starting a recession with a shock in the service sector, where the share of workers is much higher, can only accelerate job losses compared to a recession that starts in goods manufacturing. One can imagine how devastating the loss of jobs could be due to the large number of workers. labor-intensive service sector.
Reality Checks
Pay Hikes & Trap
According to the survey, 92 percent of companies gave an average increase of 8.2 percent in 2021, compared to only 8.8 percent in 2020, when only 60 percent of companies extended salary increases.
A Deloitte study showed that if wage growth reaches 8.6 percent, wage growth in 2022 would reach the pre-pandemic level in 2019.
Around 25% of the companies polled predicted double-digit wage growth by 2022.
India is the only country where wages have grown the most this year, at 10.6 percent, which is more than China (6%), Brazil (5.6%), the United States (.5%), the United Kingdom (%), Germany ( 3.5%), and Japan (3%), reports HT.
Before the COVID pandemic, India reported single-digit wage growth of 9.3 percent in 2019. It will fall to 6.1 percent in 2020, but it will rise to 9.3 percent during the pandemic. The e-commerce industry leads, with expected wage growth of 12.8 percent.
Startups come in second with 12.7 percent, followed by IT-based services (11.3 percent) and financial institutions (10.7%). The survey also found that the attrition rate remained high in the first half of 2022 at 20.3 percent, and was only slightly lower than 21 percent in 2021. According to the report, the trend is expected to continue in the coming months.
Fear of missing out(FOMO)
Meta employees have been warned of possible layoffs after Facebook’s parent company announced a hiring and restructuring plan on Thursday, Bloomberg News reported.
CEO Mark Zuckerberg cited an uncertain macroeconomic environment as causing changes in how the company interacts with employees. The announcement comes after a number of tech companies have been forced to cut staff in recent months as advertisers cut spending to cope with the economic downturn.
IT companies like Wipro, Infosys, and Tech Mahindra reportedly withdrew offer letters from many candidates as their onboarding process was delayed for months. According to sources, the offer letters of hundreds of Fusi guys have been cancelled after a delay of 3–4 months, who accepted offers from tech tycoons.
Mass layoffs are a difficult but common occurrence in business, leaving many workers wondering how it will affect them and what to do if they find themselves wearing a pink slip.
While the current US job market is strong—with low unemployment and rapid job growth—that could all change in the near future as many businesses struggle to adapt to a changing economy.
With all this in mind, many American companies have already started mass layoffs this year.
The recovery from the COVID shutdown will take longer than we currently expect, which could be disastrous for both the individuals involved and the economy as a whole.
Unemployment Rate 2020 TO 2022
Some governments, recognizing the enormous damage caused by layoffs, have written laws to protect workers from them. For example, several European countries require companies to provide social or economic justification before they can fire employees. On the other hand, France, on the other hand, recently abolished the requirement to present a financial justification, and in the United States, companies can lay off at will. As simple as it is, managers must remember that there are consequences.
One of the biggest questions organizations face as they grapple with the ever-changing economic landscape is whether their current workforce can help them make the transitions they need to succeed. While companies prioritize short-term financial results over the long-term well-being of their employees, employees are the life force that enables a company to provide products and services that ultimately benefit shareholders.
Which companies had mass layoffs this year?
Snap, Inc. confirmed that it will lay off 20% of its approximately 1,300-person workforce. A Snap spokesperson confirmed the layoff news on August 31, noting that the layoffs were to cut costs.
SoundCloud’s layoffs, part of a “significant transformation of the company” and a turbulent economy, are affecting workers around the world, not just here in the United States. Mass layoffs at Netflix
Their layoffs are mainly due to their content team ceasing production of most of Snapchat’s original shows. Employees are also being laid off in the company’s equipment division. Layoffs at SoundCloud After an eventful year of collaborations with Pandora and Splice, SoundCloud CEO Michael Weissman announced in early August that the online music streaming platform is cutting its global workforce by about 20%. Th
The streaming giant’s subscriber base continues to decline, and as a result, Netflix has laid off 150 employees, roughly 2% of its workforce.
Netflix representatives explain that the layoffs are due to business necessity, not personal performance.
Carvana Layoffs in large numbers In one of the biggest mass layoffs this year, Carvana cited declining car sales as the main factor behind the 2,500 layoffs.
Reports of this mass layoff indicated that those 2,500 Carvana employees were notified of the layoff via Zoom.
Coinbase Mass Layoff Announcement The cryptocurrency exchange platform has announced that it is laying off 18% of its workforce.
CEO Brian Armstrong cited a potential recession, the need to control costs, and “too fast” growth in
The bull market as reasons to lay off nearly a fifth of Coinbase’s workforce, leading many to wonder if this is a sign of things to come. for the crypto industry in general.
Compass and Redfin have announced massive layoffs.
With the housing market as volatile as ever and interest rates continuing to rise, real estate brokerage Compass has announced it is laying off 10% of its workforce.
Redfin, another real estate agency suffering from the decline in home sales, said it would reduce its workforce by 8%.
These layoffs come as both companies have struggled to keep up with a sluggish housing market.
Other notable companies with layoffs in 2022:
- DocuSign layoffs: 9% of workforce laid off (September, 2022)
- 6% of the workforce is laid off (September, 2022).
- Snapchat layoffs: 20% of the workforce is laid off (September, 2022)
- Outbrain layoffs: 3% of workforce laid off (July, 2022)
- 2% of the workforce will be laid off by July 2022.
- The Mom Project layoffs: 15% of the workforce is laid off (July, 2022)
- Opensea layoffs: 20% of workforce to be laid off (July, 2022)
- Substack layoffs: 14% of workforce laid off (June, 2022)
- Ninantic layoffs: 8% of workforce laid off (June, 2022)
- Layoffs at MasterClass: 20% of workforce laid off (June 2022)
- Bird layoffs: 23% of workforce laid off (June, 2022)
- Superhuman layoffs: 22% of the workforce is laid off (June, 2022)
- Cameo layoffs: 25% of workforce laid off (May, 2022).
- 9% of the workforce was laid off (April, 2022).
- Virgin Hyperloop layoffs: 50% of workforce laid off (February, 2022)
- 20% of the workforce is laid off (February, 2022).
- Beachbody layoffs: 10% of workforce laid off (January, 2022)
The Employment Situation in Us and the recent data by various source creates a great red flag for the global economies.
World Bank Data declares a global unemployment rate . Corporate needs to develop new policies for employee retention and improve labor laws to stabilize the situation and not add to the fuel of recessions.
The arrival of the pandemic probably reinforced these negative effects. Conversely, market uncertainty and reduced consumer demand led to reduced investment and reduced labor demand, reducing the likelihood that laid-off workers would find new jobs. On the other hand, pandemic risks and administrative measures have reduced the possibility of moving and thereby finding new jobs outside the immediate area. Therefore, the pandemic crisis can determine negative coefficients that are greater than those we mentioned in the article .Companies can lose permanently rather than only temporarily.
