Microsoft looks to shed 5% of its 220,000 global workforce, which would amount to about 11,000 jobs, Sky News reported last month, citing sources. HR and engineering roles are expected to be among the cuts at the technology behemoth, Reuters reported.
Amazon last month started another round of layoffs that were expected to be the biggest in its history, CNBC reported. The e-commerce giant noted in early January that it would erase more than 18,000 jobs, with its HR and store divisions expected to absorb the biggest cuts.
“Our priority in the coming days is supporting those who are affected,” Amazon’s human resources head Beth Galetti wrote in a memo to employees last month. “To help with the transition, we are providing packages that include a separation payment, transitional benefits as applicable by country, and external job placement support.”
Technology firms overall slashed more than 154,843 jobs last year, TIME reported, citing Layoffs.fyi, a website that tracks job cuts across the industry. This year alone, these firms have laid off an additional 55,970 employees. “In 2020 and 2021, technology companies went on a hiring spree, fueled by low interest rates and demand for tech products while people were staying at home during the pandemic,” Roger Lee, the creator of Layoffs.fyi, told TIME. “Now that we’re in a completely opposite environment, these same tech companies are performing layoffs to undo their overhiring from the past couple of years.”
Josh Bersin wrote in Human Resource Executive that Amazon scaled up its workforce from 798,000 employees in 2019 to 1.6 million in 2021. “These companies, many of which were encouraged by investors to ‘grow like crazy,’ now find themselves overstaffed for the current business climate,” he added.
In good times and bad, smart employers and HR teams are thinking of ways to avoid layoffs, which means intentionally planning for worse-case scenarios, Bersin wrote. “You should also document the processes for reducing staff counts if ever necessary, along with the associated expense estimates (such as severance and benefits extensions),” he noted. “Growth naturally creates additional infrastructure to support, so great managers can look ahead while at the same time planning for the worst.”
HR leaders also need to always ask whether their hiring/recruitment strategies are boosting productivity or cutting it down even if the company is realizing huge growth and it makes sense to keep growing headcount. “Are employees becoming more productive or less?,” Bersin wrote. “Are we pinpointing current market needs or chasing the old game? Do we have to hire this fast? Are we doing everything possible to arm current employees with the skills that will take the business into the future?”
HR and employers also need to remember that layoffs can carry huge reputational risks to brand with the wider public if they are carried out in a harsh way, CNBC reports. “My general philosophy on letting people go is you want to treat people well because it all goes back to your brand and in today’s market employer brand is very important,” said Paul Wolfe, former head of HR at Indeed who now runs his own corporate consulting firm. “People exiting are still out there talking about your brand.”
Paaras Parker, CHRO of Paycor, an HR software firm, told HR Dive she is hopeful that employers learned from the pandemic. As the pandemic progressed, HR proved their worth when they helped companies refocus on building their talent pipeline and bolstering diversity, equity and inclusion initiatives. HR is currently in a position to help firms analyze their talent strength.
“What the last couple of years has taught us with the job market is that the talent that you’re looking to acquire isn’t always available, but you have great people that are saying yes to you, every single day, that are already a part of your organization,” Parker said.