Meta’s recent job cuts are a sign that some employers are willing to make repeated cuts. This is a change from the previous idea of “significant reductions in personnel”. However, continued job cuts hurt morale and are not a solid long-term strategy, labor experts told BI. .
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The hashtag on Andy Werful’s LinkedIn photo says it all: #sickofthisshit.
Welfle wrote earlier this month that he was fired from Microsoft after just nine months. Prior to that, he worked for Cruise for nine months before being fired.
His two layoffs may have been worse than those experienced by many others, but the situation seems to be driving some employers to layoffs on a regular basis, especially in Silicon Valley. Werful is not the only one affected by this.
One of the latest examples comes from Meta, which announced Wednesday that it is overhauling some of its largest businesses. This change means job losses at Instagram, Reality Labs, and WhatsApp.
It’s not clear how many roles were eliminated. A Meta spokesperson told Business Insider on Wednesday that the company is looking for other jobs for the affected employees.
After cutting employees through large-scale layoffs in late 2022 and early 2023, many tech companies are taking a systematic approach to cutting jobs, department by department. Major companies ranging from Google to Amazon to Microsoft have announced more modest cuts following large cuts.
Take Google, for example. The tech giant’s parent company Alphabet has begun by cutting about 12,000 jobs, or about 6% of its workforce, in 2023. That big cut was followed up by smaller cuts this year.
Art Zeile, CEO of technology career marketplace Dice, told BI that some of the industry’s biggest companies have decided that certain sectors are no longer profitable enough. he said. As a result, companies need to direct resources to growth areas such as artificial intelligence.
“It’s a change of bet,” he said. The new normal is regular layoffs here and there, Zeile said.
Unsurprisingly, while there has been growth in some areas, the trickle-down cuts of the past few years seem to be worrying some tech players. In a new survey from Indeed, 40% of respondents said they expected to be hurt if their company made layoffs. Seven in 10 people said they would start looking for another employer if their company cut staff.
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Indeed surveyed more than 1,100 U.S. tech workers from early to late June.
costly decisions
Lindsay Fagan, senior talent strategy advisor at Indeed, told BI that most of the recurring layoffs are in the technology industry. This is likely because many companies in the industry grew rapidly during the pandemic and are still adjusting.
But Fagan said these regular layoffs come at a cost.
“This is clearly not a sustainable strategy,” she says.
Mr. Fagan noted that employee sentiment begins to decline before layoffs, as employees are suspicious that layoffs will occur. And when layoffs occur, employees’ feelings about the company — and the CEO’s acumen — “decrease over time,” she says.
“When you look at companies that are trying to recover from this situation, that’s not going to happen if layoffs continue,” Fagan said.
Even small layoffs can make workers nervous, she says. Fagan also noted that the rise of technologies such as generative AI and the threat of layoffs is causing many in the tech industry to want to upskill.
Unlike in the past, tech workers looking for jobs on Indeed are now more likely to apply to staffing agencies or fields like healthcare, which may offer temporary work, than to tech companies. , he said.
Fagan said some technology workers are attracted to the flexibility that temporary or part-time roles can offer. But at the end of the day, she said, technology has historically been the No. 1 industry that tech workers want to work in.
But “they don’t feel that stability right now,” Fagan said.
why do that
Some companies’ preference for periodic trimming may be because Wall Street so often praises that kind of trimming.
Dice’s Zaile said Meta CEO Mark Zuckerberg was “rewarded handsomely” by the market for cutting jobs, pointing to the rise in the company’s stock price.
Beyond the cheers from investors, the tech giants are also aging and no longer in the growth mode that once meant hiring workers. As a result, many companies have cut staff due to the hiring rush during the pandemic.
Since then, some bosses have considered making improvements, including downsizing their organizations. Zuckerberg famously declared that 2023 would be the company’s “year of efficiency.” He also said the directive would be a continuing feature, not a bug.
It’s not all bad news for tech jobs
Zaile said investors will ultimately want technology companies to do more than boost profits by cutting costs and expect a return to growth. He said this is when there will be a broad recovery in employment, as businesses may have many areas in need of workers.
For now, Zeile said, while companies like Meta may be cutting back in some areas, they’re growing in others.
“In fact, Meta is in a crisis right now. They’ve just stopped hiring VR engineers. They’re hiring AI engineers, so they’re actually hiring more,” he said.
Indeed’s Fagan said job openings in fields such as software development have remained flat in recent months after years of decline as a sign that the tech industry is nearing stabilization. He said it was 30% below the current level. Of course, that means fewer opportunities for workers to be laid off. Still, she says it’s also a sign that companies are being careful not to hire too many people.
“It’s not like they’re hiring in a big way and then doing layoffs,” Fagan said.
Meanwhile, Welfle, who was fired from Microsoft, wrote on LinkedIn that he was looking for a job in content design. Probably a job at a small company. He also said some of his recent emotions are similar to those he experienced after his last layoff in December.
“I have a hard time separating my values and self-worth from my identity as an employee. But I am sure I will reflect on this and find a more gentle and sustainable way to live in a capitalist society.” ” he wrote.
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