CUTTING CORNERS OR CUTTING CULTURE? RECESSION AND JOB CUTS
By Kendryll Lictao
In recent times, the tech industry has witnessed a surge in job cuts by major players such as Amazon, Google, Microsoft, and Meta (formerly Facebook) not only impacting the companies themselves but have also sent shockwaves through the global economy.
The collapse of Silicon Valley Bank and the ongoing battle against inflation have further exacerbated the risk of recession, leading to even more job losses.
THE STATE OF THE TECH INDUSTRY: FROM HIRING BINGE TO JOB CUTS
During the pandemic, tech giants experienced a surge in demand for their services, prompting them to embark on a hiring spree. However, as the global economy faces challenges and revenue declines, these companies find themselves compelled to make drastic cost reductions, leading to mass layoffs.
The impact is not limited to the tech industry alone, as layoffs extend to various sectors, including communications, financials, healthcare, real estate, and energy.
THE RIPPLE EFFECT: IMPACT ON EMPLOYEE TRUST, WELLBEING, AND MORALE
Mass layoffs not only affect those who lose their jobs but also have a profound impact on the employees who remain within the organisation.
A study in the Journal of Economic Behavior & Organization indicates that job cuts can lead to a decline in employee trust, financial struggles, reduced work motivation, increased workload, and diminished job satisfaction.
Those remaining in the organisation will be constantly looking over their shoulder wondering whether they will be next out the door.
Furthermore, the mental health and morale of laid-off employees can be significantly affected, with symptoms of depression being prevalent among those who have lost their jobs.
During times of economic uncertainty, it’s important to minimise losses, but most importantly have the capability to thrive as the economy strengthens again.
The big question is, are job cuts the answer for long-term performance and profitability or just a short-term tactic to keep shareholders happy?
Is it more beneficial to retain talent, experience, and trust than using job cuts to protect the bottom line? What other ways can you minimise the effect on the bottom line?
NURTURING RISING TALENT AND POSITIVE CULTURE IN TIMES OF UNCERTAINTY
Despite the challenges posed by job cuts and economic uncertainty, organisations must prioritise the growth and development of their employees.
Gone are the days when 6-month and 12-month performance reviews were considered appropriate for growth and now is the time to provide feedback on a daily basis.
Creating a tight feedback loop where you can reinforce positive performance and behaviours, as well as sharing insightful areas of improvement, are essential to creating a culture of growth.
Whether employees have been in the organisation for 40 years or just 40 days, have lots vs little experience or differences in job title, feedback should be encouraged up, down, and across the organisation.
Everyone has room to improve, and every employee has powerful insights and perspectives that can help each other continually grow and evolve.
This entails creating a positive company culture that fosters employee trust, engagement, and growth.
Nurturing rising talent becomes crucial for organisations looking to thrive amidst adversity. By identifying and developing high-potential employees, organisations can build a resilient workforce capable of driving innovation and growth.
This requires a proactive approach to recruitment, talent management, and succession planning.
HEART-CENTERED LEADERSHIP
A positive workplace culture requires people to have a feeling of connectedness. Creating a strong sense of belonging requires a leader to have a deep sense of care for the people and what they do matters.
A heart-centered leadership requires empathy, compassion, and authentic connection.
Leaders must communicate transparently, acknowledging the reasons for job cuts and outlining steps taken to prevent future layoffs.
By demonstrating empathy and taking responsibility for the decisions made, leaders can help employees understand the necessity of such actions maintaining a sense of trust.
FOSTERING A POSITIVE CULTURE
Organisations should prioritise open communication, encourage employee feedback, and create avenues for dialogue to continue fostering a positive culture amidst the job cuts.
Involving employees in decision-making processes and actively addressing their concerns can foster a sense of ownership and trust.
Regular check-ins, one-on-one meetings, and team-building activities can help strengthen relationships and boost morale.
TRAINING AND DEVELOPMENT AND INVESTING IN EMPLOYEE GROWTH
Amidst job cuts, organisations should invest in the training and development of their remaining employees.
Spend time working with your employees to identify tasks that can be automated for speed, efficiency, and accuracy for not only the company but also your clients.
Identify opportunities for skills that will be required in the future and create a plan to help employees develop those skills.
By providing opportunities for upskilling and reskilling, companies can equip their workforce with the necessary skills to adapt to changing market demands.
Training programs, mentorship initiatives, and knowledge-sharing platforms can empower employees and demonstrate a commitment to their growth and future employability.
Tech giants and organisations across various sectors are facing the challenging task of navigating job cuts, economic uncertainty, and maintaining a positive company culture.
By adopting heart-centered leadership approaches, prioritising employee wellbeing, investing in training and development, and nurturing rising talent, organisations can weather the storm and emerge stronger.
Embracing these strategies can ensure that organisations can not only survive but also thrive in the face of adversity, building a resilient workforce and a positive culture that will endure beyond challenging times.