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Sad person walking away from his desk after being laid off

 

At the start of the COVID-19 pandemic we saw an uptake in hires. Everyone was trying to build up personnel to keep up with the rising consumer demand in tech as everyone was moving online. Because everyone was being forced to work from home, many people needed to buy new software, new computers, or require more tech support from home. This created a void in the tech industry that many companies filled by hiring more staff.

 

However, now that the pandemic is coming to an end and more people are going back to “normal”, there has been a surge in layoffs. In 2022 and the beginning of 2023 there have been thousands of layoffs across the tech industry in North America. This is causing many people to begin to worry about their jobs and the security of their positions. People are also beginning to wonder why there have been so many layoffs and how to protect themselves from this alarming trend. There are a few reasons that could be contributing to these layoffs and the coming ones later in the year, but as of right now there is no safety net.

 

Why are Layoff Rates Rising?

Around the latter half of 2022 we began to see large companies begin to lay off a large portion of their staff. Twitter, after it was bought by Elon Musk in 2022, laid off 3,700 people over email, and could potentially lay off even more in 2023. Amazon, on January 5th, 2023, said they were laying off 18,000 people or about 3% of their total staff, and announced that they plan further lay offs for later in the year. However, the question remains for many people, why are these layoffs happening?

 

That, however, is a complicated question with more than one answer. It always depends on the company and how they are managed as well as the demand for what they offer. There are a few common explanations we have been able to see across a wide variety of companies in the industry that are contributing to this major wave of layoffs.

 

COVID-19

One of the most common and predominate reasons for these layoffs is of course the pandemic. It is not just because the pandemic caused a lot of companies to downsize, in fact it caused a boom in the tech industry. It is instead for a few other reasons, mainly the over hiring companies did during the pandemic and the stigma around firing during the pandemic.

 

Due to the higher-than-normal demand for tech products and services that happened right at the beginning of the pandemic, companies began to hire a larger than average number of new staff. These larger companies, but also some smaller ones, felt as though they needed to hire more people to make up for the higher-than-average sales. However, with the pandemic coming to an end, sales numbers are beginning to drop again. This has caused a shift in the number of employees many companies need to have. This has then caused many employers to go back and lay off several old and new employees. This is one of the reasons for the continuous layoffs going into 2023 as more and more sales are beginning to drop.

 

Another big reason companies began to lay off people after the pandemic was because they were afraid of the stigma around firing people during it. At the start of the pandemic a lot of people lost their jobs, because of this there was a global fear going around about job security. This contributed to why many companies held off on letting go of staff. They were worried that other companies, social media, applicants, or the public may look at them in a bad light for firing people during this time. Many companies were also unable to properly evaluate their employees because many of them were working from home. This made it harder to judge who they were and were not going to let go of during the pandemic. Now that everyone is going back to “normal” and companies can “ethically” lay off employees, there has been a surge.

 

Work from Home (WFH)

During 2020 a lot of us were told that we would have to start working from home, and many of us got used to it. Working from home seemed odd at first compared to the “usual” way we worked, however, for many people it was a nice change. They got more work done, could see their families more, could work with their disabilities, it benefited many people in different ways.

 

WFH, however, had some negative effects as well. It caused a lot of people who did not have a lot of experience with technology to drop in job performance. Companies often had to spend a lot of money on work from home set ups for employees, online training, and other accommodations. It may also be contributing to why people are now getting laid off. People got very comfortable WFH and are reluctant to go back to the office like many companies want.  

 

A lot of companies are looking to go back to the way things used to be and as such are forcing or mandating that all their employees go back to working in the office. In many cases employees that never worked in the office even before the pandemic are being forced to go in. This has caused many lay offs or threats of lay offs out of the company’s desperation to go back to “normal”.

 
How is This Affecting People

As you may have guessed all these recent layoffs have had many different impacts on existing and former employees. Not only are people losing their jobs, but many remaining employees are being placed in difficult situations. From having to choose whether to stay with a company or not, whether to go back into the office, and even some big life choices.

 

Current employees of many companies, especially larger ones, are beginning to debate whether they should stay or leave. With layoffs already happening and more to come it is beginning to scare a lot of people. They are concerned about their jobs and their economic wellbeing. Many people have families that they need to take care of or make house payments or simply get by on their own. Because of the impending layoffs within the tech industry many people are considering moving away from tech or to a different company with more job security.

 

People have also been affected by the layoffs in the sense that they got used to working from home. Many people have been resistant to going back into the office because many of them took the opportunity to make big moves. As everything was being moved online and they were no longer required to be in the office, they took the chance to make big life changes. Many chose to have children, which made a lot of people want to stay home to be with them, as well as dependent children who could not be without a parent. People also chose to move out of the big city and into smaller cities or the country, because they no longer needed to be around the big companies or within range of meetings anymore. This is causing a lot of push back when it comes to moving back into the office as people either cannot get to the office anymore or do not wish to leave their homes.

 

All of this is causing a lot more trouble for companies than they expected. Because most of the tech industry relies on good hardworking people who live in the city or are willing to commute, companies are now facing other risks. They either need to hire new people in the industry who are not as experienced but are willing to work in the office or need to start changing their minds regarding their layoffs.

 

How is This Affecting Companies?

With rising layoff numbers there has been a few impacts on not only the laid off employees but also remaining employees and the companies themselves. There are many problems that companies in some cases did not expect to happen. Anytime companies begin to lay off employees there are expected impacts such as lower morale, people leaving out of fear, and public backlash. However, many companies did not expect some of the other responses they have gotten.

 

The public is beginning to view this in a different light than anticipated. Despite avoiding backlash during the pandemic by holding off on letting people go of employees, companies are now experiencing major public push back now. People see it as companies cutting back due to the potential for a coming recession. Companies are also seeing higher than normal numbers of people willing to leave to find other jobs that allow them to continue to work from home or stay within a stable position. This is typically normal but not at the rate some companies are beginning to see.  

 

With the rising layoffs a lot has happened within the world and there are many factors that are going into these decisions. However, this is impacting employees and companies alike in a variety of ways, and with the impending layoffs coming later in the year there is bound to be more stress, fear, and push back from everyone involved.

 

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