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The tech giants are doing mass layoffs, from Meta, Microsoft, Amazon to finally Google. Unmitigated, the number is up to tens of thousands. This raises a sense of wonder.
What's more, the company actually still posted huge revenues and profits. For example, Microsoft has just reported revenue of USD 57.2 billion with a profit of USD 16.4 billion.
Indeed, many factors played a role, such as stock market and investor pressures, over-hiring in the past and recent economic uncertainty. On the other hand, maybe they do it because they imitate others.
"CEOs are normal people who navigate uncertainty by imitating behavior," wrote Derek Thompson of The Atlantic. He quoted business professor Jeffrey Pfeffer, from Stanford.
"Is Meta over-hiring people? Maybe. But is that why they are laying people off? Of course not. All these companies make money. They do it because other companies do it too," he said.
Pfeffer believes this 'social contagion' could spread to other industries. "Layoffs are contagious across industries and within industries," he said.
As for businessman Ashneer Grover, he believes that layoffs could have been avoided, for example by cutting the salaries of high-ranking officials. "Sad to hear of getting laid off every day. I'm thankful I never had to get laid because of a bad market, because I always hire with the best in mind. As a founder, you have to think about the long game," he wrote.
According to him, a salary reduction of 25 to 40% could be an alternative to mass layoffs, while adding that he did not understand why company officials did not just take this option.
"I've been suggesting about a 25-40% reduction in pay a while back as an alternative to mass layoffs. I don't see why founders don't go that route," he is quoted as saying by us in Business Standard.