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I personally know of a company that is currently in a "well Google did it" hiring freeze. Having said that, the layoffs are not happening in a vacuum, there's

I personally know of a company that is currently in a "well Google did it" hiring freeze. Having said that, the layoffs are not happening in a vacuum, there's been significant economic issues over the past year and cash isn't basically free anymore. Some companies may have made moonshot efforts hoping to be at the front of <now essential industry> with the pandemic but things largely went back to normal. But it's likely not just one factor. I'd believe that: 1. Some companies are bloated and can (maybe should) downsize, or over-invested in projects that didn't pan out. 2. Some companies care more about costs now than they did a year ago (for reasons good or bad) 3. Some companies are more willing to conduct large layoffs since other large ones are doing it and it looks better 4. Some companies are facing pressure from investors to cut costs and do layoffs because "other bigs ones did it" All can be true for some sets of companies - there isn't going to be "just one reason" why all a company decides to do layoffs.

dougSF70 4y ago
There is an advertising recession underway. Ad budgets are down and sectors that were heavy spenders have disappeared (crypto for example)...this is having a knock on effect with Media companies (meta, google, amazon)...the downturn was quick and is exaggerated by the stock market turning bearish. As a result there is less forgiveness for companies to be publicly traded and not make a profit. I think the "google did it" is a post rationalization for past layoffs rather than a driver of layoffs. Cutting costs is the fastest, and mostguaranteed, way to profitability. For private firms there is more scrutiny of prerevenue start ups trying to raise, the message from these firms is "we need to get on a path to profitability" . In my opinion, if you are working in a company where your CEO has just said those words, you should start interviewing. Best advice i ever received was its easier to spend money than make money, and the past 10 years has allowed people to start businesses that don't, and may never, make a profit.
- oxfordmale 4y ago
  As the research by this professor shows, layoffs are not a guaranteed way to profitability. Unless a company is in a dire financial situation (Twitter), layoffs do not pay off long term. Lay-offs are expensive and tend to result in lower staff morale and, in addition to that, lower productivity. It generally increases staff turnover, especially if pay raises are also delayed. Good staff leaves typically first, as they have no problem finding another job. That leaves you with an overworked and demotivated staff base when the economic downturn turns into an upturn. Even if you manage to rehire staff quickly to deal with the upturn, you still need to train them before they start adding value.
  - dougSF70 4y ago
    Could you argue that excess hiring is also not a path to guaranteed profitability because it leads to layoffs.

dougSF70 4y ago

There is an advertising recession underway. Ad budgets are down and sectors that were heavy spenders have disappeared (crypto for example)...this is having a knock on effect with Media companies (meta, google, amazon)...the downturn was quick and is exaggerated by the stock market turning bearish. As a result there is less forgiveness for companies to be publicly traded and not make a profit. I think the "google did it" is a post rationalization for past layoffs rather than a driver of layoffs. Cutting costs is the fastest, and mostguaranteed, way to profitability. For private firms there is more scrutiny of prerevenue start ups trying to raise, the message from these firms is "we need to get on a path to profitability" . In my opinion, if you are working in a company where your CEO has just said those words, you should start interviewing. Best advice i ever received was its easier to spend money than make money, and the past 10 years has allowed people to start businesses that don't, and may never, make a profit.

oxfordmale 4y ago
As the research by this professor shows, layoffs are not a guaranteed way to profitability. Unless a company is in a dire financial situation (Twitter), layoffs do not pay off long term. Lay-offs are expensive and tend to result in lower staff morale and, in addition to that, lower productivity. It generally increases staff turnover, especially if pay raises are also delayed. Good staff leaves typically first, as they have no problem finding another job. That leaves you with an overworked and demotivated staff base when the economic downturn turns into an upturn. Even if you manage to rehire staff quickly to deal with the upturn, you still need to train them before they start adding value.
- dougSF70 4y ago
  Could you argue that excess hiring is also not a path to guaranteed profitability because it leads to layoffs.