Hello everyone,
I want to bring up the topic of uncontrolled hiring that occurred during the COVID times and what is happening now.
By the second half of 2022, tech companies had initiated significant layoffs -- something that had followed an extended period of frenzied tech hiring and attention to employee experience. Standard explanations for the cuts were that companies hired too many during the pandemic and they were looking at the specter of a recession in the months ahead. It sounds a lot like the dot-com boom and bust of yore. Not all companies are impacted equally. It’s the ones that hired at an accelerated rate during the boom that seem to be hitting the brakes right now.
When much of human activity moved online during the height of the pandemic, tech companies were thriving. Call it the COVID tech bubble. Now we’ve hit the COVID tech bust.
The U.S. economy is humming and there are hundreds of thousands of jobs being added every month. In a stunning burst of hiring to start the year, the nation added 353,000 jobs in January, shrugging off the highest interest rates in two decades that have been put in place by the U.S. Federal Reserve in part to cool off hiring and spending. The unemployment rate is hovering at 3.7%, just above a half-century low.
Stéphanie Vernik Barker, President of Mondo Staffing at Addison Group, said that during the pandemic, many companies hired too many employees. These recent layoffs, especially in the technology sector, are a correction of this situation.
"From 2020 to 2022, everyone took advantage of access to talent, remote opportunities, and access to capital at lower interest rates, leading to a boom in hiring," she said. "Then you face the question: 'Did we invest too much?'"
Vernik Barker said she hasn't had to lay off her 200 full-time employees yet, and she's doing everything she can to avoid it, including reassigning employees to other tasks if the return on investment in their current work decreases.
You can find statistics on mass layoffs over the past years here: https://lnkd.in/gE2SaPnG
How do you think the U.S. IT sector will emerge from this recession?
Talent Management Adviser, Leadership Consultant, Executive Coach and Author
7moThanks, Leila Lance, your post sheds light on this fascinating phenomenon currently shaping the tech industry. It's intriguing to see how 'copycat layoffs' and social contagion dynamics influence organizational decisions. Nearly 25,000 tech workers laid off in the first weeks of 2024 is a big number! If you wish to delve deeper into the personal narratives behind the statistics, you might be interested to read this piece I recently co-authored which examines what three tech leaders who found themselves out of a job more suddenly than expected are doing to go on with their career. Their stories highlight the importance of purpose and agility in every career journey, particularly during moments of crisis. Read the article here: https://shorturl.at/glMY7