Are tech giants right to mass lay off employees?

Even if the layoff is financially justified, it could still damage their reputation and long-term growth,” one CEO said.

Currently, many technology giants in the world such as Meta, Alphabet, Oracle, Tesla, Shopify, Microsoft … are cutting a series of personnel or introducing a policy of “freezing” recruitment due to the economic downturn. However, according to some experts, they are making a “big mistake” because when the situation stabilizes, prospective candidates will evaluate how these companies treat employees.

During their heyday, the tech giants raised huge amounts of cash, went public, and recruited massively. However, according to Danny Allan, chief technology officer of software company Veeam, the current mass layoffs will make their image less “sparkling” in the public eye.

“I can’t forget every time I see an announcement that a technology company has cut X percent of its workforce. In my opinion, they are creating something that can have an indirect impact on the brand. layoffs and future candidates will no doubt keep in mind the way these companies treat their workers, which can become a hindrance in their hiring process later, once the downturn is over. go,” Allan commented.

According to Richard Mabey, CEO of contract automation platform Juro, one possible reason for their mass layoffs is irresponsible hiring during boom times.

“The massive hiring at the tech giants has taken place over the past few years, as they make money and raise capital easily. Even if the layoffs are financially justified, it could still hurt their reputation as well as their long-term growth,” he said.

According to Allan, cutting staff means cutting resources and losing innovation, while these are the most important factors for a technology company. “Besides, by laying off employees, they’re sending the message to people that they care more about money than people,” he said.

Mabey says that blindly cutting back will lead to slower growth and even a negative impact on future revenue because it’s no different from “a short-term cash saver that can cause distress.” mid-term pain”.

According to the two executives, instead of adopting rigid cuts and savings methods, technology companies should focus on retaining loyal employees and fostering talent.

Allan said: “Their strength is largely due to the talent they possess. The long-term sustainable difference of any company is the power of people. Giving employees trust and confidence. Working peace of mind is probably the best thing companies can do in any kind of economic challenge.”

Mabey also shares the same opinion with Allan. According to him, transparency is the best approach in this situation. He gave an example of disclosing the company’s cash balance and expenditures with employees so that everyone is aware of the current situation.

The two directors agreed that if layoffs were inevitable, empathy was crucial. According to them, companies may find ways to support employees after being laid off, for example by referring them to another workplace.

“Everyone has a family and a life to take care of. So find ways to help them as much as possible if you have to let them go,” Allan said.

Source: BI