The main reason why workers get laid off is that the company decides to cut back on costs in some way. The fact is that the company is not making enough money to cover its expenses. It also occurs when a company needs to eliminate some positions due to over-staffing, outsourcing, or a modification to the roles.
Also, if a business is bought out or decides to merge with another, the change might lead to a change in the company’s leadership and corporate direction. If there’s new management, the chances are that they’ll come up with new goals and plans, and this can lead to layoffs. In such cases, the new management will look at every employee’s position, performance, and length of time spent with the company so as to decide who they will lay off.
Laying off employees is stressful not just for those affected but also for the Human Resource department. It also affects a company’s image, as outsiders are likely to think that the company is struggling to stay alive. So, is there any alternative to laying off workers?
Yes, there are!
If a company needs to reduce its workforce, why not just ask who wants to step down voluntarily? Owners can offer older workers a retirement package as an incentive. If a company is laying off workers to reduce costs, it can look for other avenues of saving money. Company managers can freeze additional hiring, reduce or remove bonuses and raises, and eliminate unnecessary travel.
Another way to cut down on costs is to keep only the most important staff onsite and send the rest of the workers home to work remotely. Thanks to modern software, the company owner will still be able to manage his employees remotely by conducting video conferences and other ways.
Adequate planning and communication will have a significant effect on the employees being laid off, the remaining staff, and clients who work with your employees.
At present, Amazon is one of the world's biggest marketplaces which is also facing layoffs. Amazon is planning to lay off thousands of employees. The company could fire as many as 10,000 employees by the year 2023, it would be the biggest layoff in the history of the biggest shopping giant, Amazon.
The pandemic produced Amazon’s most profitable era on record, as consumers flocked to online shopping and companies to its cloud computing services. But, earlier this year, Amazon’s growth slowed to the lowest rate in two decades.
Facebook’s parent Meta Platforms Inc, said recently that it would cut 13 percent of its workforce, i.e. more than 11,000 employees, in one of the biggest tech layoffs this year. According to an estimate, 1000 Indian employees have been impacted by this layoff plan.
Another social media giant Twitter laid off half its workforce across several teams following Elon Musk's $44 billion takeover. On the Indian front, Twitter has fired the entire marketing and communications team excluding only 9-10 professionals.
On the other hand, experts opine that employees must look for more sustainable companies in the short term till the global economic scenario improves. It is the normal business cycle and hiring will kick in again. In the past, recessions have occurred in advanced economies several times. In the last four decades, the mid-1970s, early 1980s, early 1990s, early 2000s, and in the years 2008-2010, it was at its peak.
A recession is a business cycle contraction when there is a general decline in economic activity and demands. In simple words, a recession means that everything’s more expensive. As we’ve seen in the year 2022, the prices of everything around us have increased, and people are spending more on essentials like rent, electricity, and food than ever before. With rising prices due to inflation, your money doesn’t go as far, so you’re unable to maintain the same quality of life.
In a recession, you’ll struggle to save money due to your decreased purchasing power. When you can’t save as much money, you can’t spend on travel and other luxuries, which hurts anyone working in those industries. You may also have to make some sacrifices, as fuel prices and the cost of food will make you think twice before spending money.
So, now the question comes, Are we in a recession now?
We aren’t officially in a recession yet, but we’re likely heading toward one, many economists are predicting the year 2023 as a recession year. The Covid-19 pandemic has hit the global economy hard. And, even as the economy struggled hard to recover from this, the Russia-Ukraine war arrived as another great setback. These two factors combined are expected to push the global economy into recession next year. And, of course,
Lower-income people or unskilled laborers are more vulnerable during this recession. During the 2020 recession due to COVID-19, the hardest hit industries were leisure and hospitality, but in the 2001 recession, the tech industry struggled.
Now, the biggest question is, How to survive during a recession?
In a recession, spending should be monitored. Try to avoid going off budget. Additionally, if possible, try to avoid taking on more debt. Evaluate your finances. Take the time to thoroughly review your finances. Make necessary spending adjustments to your budget. Increase your emergency fund. Make sure you have at least three to six months of expenses saved up. Continue making your debt payments. If possible, pay more than the minimum on your credit cards since that would give you more financial flexibility during a recession.
Recessions can lead to job losses. It's important to have a backup plan in case you lose your job. Stay connected with your professional network, update your resume, and consider ways to gain new skills. It might also be helpful to pick up a side hustle or start freelancing if you're worried about losing your job.