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Tech sector layoffs hold sobering talent management lessons for HR

It isn’t just you: tech industry layoffs are trending. While the ominous headlines seem to have started at Twitter – as Elon Musk eliminated about half of all permanent employees barely a week after taking the helm – the microblogging service is hardly the only Big Tech company sharpening the layoff knife.


Meta eliminated about 13% – or 11,000 – of its salaried workforce. Salesforce pared 2,500 from its payroll, and Snap sent 6,000, of its employees packing. And even Microsoft and Amazon have been eliminating corporate roles through both layoffs and corporate attrition. Here in Canada, where STEP Software is based, Shopify, Hootsuite, and Wealthsimple have all made major headcount reductions in recent months`

While these numbers are certainly eye-opening, they don’t come out of nowhere. We see three basic factors at play here:

1 – It’s part of a broader industry trend. Big Tech companies across the industry are freezing hiring, cancelling projects, and laying off workers as economic headwinds gather, and they hunker down in response. While the technology sector is often something of an economic bellwether because it echoes coming consumption trends across all industries, it’s also a reflection that modern tech-forward companies tend to be better managed than those on the back side of the tech adoption curve, and their leaders are adept at predicting – and adapting to – changing market conditions 

2 – Consumers are slowing their consumption, too. Consumers and businesses are pulling back their spending on new hardware, software, and services first as fiscal clouds begin to gather on the horizon. As consumers we are pushing off that next smartphone purchase, and many companies are sharpening their IT plans so they can do more with what they’ve already got instead of investing infancy, shiny new tech.

3 – Pandemic-driven hiring splurges are coming back to bite Big Tech. Most tech companies – particularly social media, apps, and other services-based platforms – rode quite growth wave during the pandemic. As millions of us were stuck at home, we shifted our habits to our phones, spending our days scrolling through our feeds, and using our apps to order food, products, and other things we could no longer get in person. E-commerce use skyrocketed, and tech companies hired like gangbusters to meet the demand. While the pandemic isn’t over just yet, we are largely on the far side of it, and consumer and enterprise habits are slowly returning to normal as everyone gets out more. Mark Zuckerberg has acknowledged that Meta may have overhired during this period – so this round of layoffs can be seen as something of a pandemic-related correction.

Understanding the why is helpful, of course; but the how is where any company in any sector can differentiate itself going forward. That’s because not all companies implementing layoffs are doing so in an optimal manner. In fact, while the layoffs themselves may be both necessary for and critical to the future health of the company, the tactics used in carrying them out could leave the organization worse off than planned. 


Here’s a quick rundown of some best practices to keep in mind if your organization finds itself planning its own round of layoffs:

Communicate. While organizations may not be at liberty to share all details of a layoff in advance of it actually happening, they owe employees and other stakeholders a higher standard of care once the plan is in action. Elon Musk waited almost two weeks before sending his first email to employees. That was far too long. Even then, corporate communication can’t be limited to company-wide missives from top leaders: supervisors and managers should be involved in crafting and delivering consistent messaging during all phases of any layoff period. Otherwise, employees and soon-to-be-ex-employees will be left to figure it out for themselves. And much of that could end up reflecting badly on social media – and on the organization’s brand.

Motivate. Employees aren’t just human assets on a spreadsheet. They’ve got lives, dependents, and dreams – all of which can be thrown into disarray in the event of a layoff. And strident corporate-ese – or threats to fire employees who don’t follow the new rules – won’t cut it when communicating either with or about them. How an organization communicates to employees and other stakeholders can be just as important as what it says. This applies just as much to laid off employees as it does to those who remain: we’re all human, and wherever we find ourselves within an organization, we deserve to be dealt with in a professional manner, even if the news itself is somewhat less than positive. 

Empathize. Leadership must relate to the employees they lead. While this certainly applies at all stages of the employment life cycle, it is particularly acute when layoffs are happening. It may sound trite, but all corporate-employee engagement leading up to, during, and following a layoff period should be run through an empathy filter: namely, how would the deliverer feel if they were on the receiving end? Small tweaks like this to employee engagement can go a long way toward smoothing out the process. 


Despite the rising frequency of layoff-related headlines, the historic shortage of tech-first talent across all industries remains stubbornly persistent. Even as the pandemic slowly fades into history, companies in all sectors are still competing for sparse skillsets – and too many roles remain unfilled.

That means one thing for HR professionals and the stakeholders they serve: no organization can afford to fall short. Because employees who feel shortchanged at their current employer still have options, layoffs, and headlines notwithstanding, at competing companies. If HR and the organizations they serve don’t raise their game in terms of doing right by prospective, existing, and, yes, even departing employees, they will suffer in talent acquisition and retention space.

More starkly, competing companies will smell the HR blood in the water, and will move in on their badly laid-off or otherwise ill-treated talent – and use them to gain their own market advantage. The smart players – including well-funded startups and agile major industry players – are already positioning themselves to take advantage of the HR mistakes now being made across the tech industry.

We live in a world where employees increasingly share the good, the bad and the ugly employment experiences via social media, including onboarding, in-role support, and, eventually, offboarding. And seemingly trivial decisions around talent management – including how to show some employees the door – can make or break the organization’s ability to attract and retain talent in future.

Given the particular dynamics of the tech talent market – short supply, huge demand, long waits to fill specific roles, lots of movement between jobs and organizations – it’s a mistake no organization can afford to make.