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Mass Firing: The psychological impact on laid-off workers

Dr. Neelam Batra Verma

Mass Firing: The year 2023 did not start with a bang for the tech industry; rather it was a precursor to impending doom. A once booming industry has taken a nose dive with big giant companies like Google, Meta, Shopify, Netflix, Microsoft, Amazon, Coinbase, Salesforce, Cisco,, Lyft, Uber, and Twitter just to name a few, laying off workers left right and center. Till the time of writing, a total of 57,601 employees representing as many as 185 tech companies have been laid off globally in the first month of 2023. And counting. By the time you read this article, the figures would definitely have changed. A new website has sprung up which is keeping track of the companies and employees affected by layoffs.

High rate of lay-offs and mass firing

The year 2022 saw 159, 184 employees laid off from 1039 tech companies and which according to a report by global placement and career transitioning firm Challenger, Gray, and Christmas, is much higher than the Great Recession of 2008-2009. In 2008, 65,000 employees were laid off. India too saw more than 20,000 employees laid off by companies like BYJU, Unacademy, Vedantu, Edtech, Wipro, Udaan, Ola, and others in this frenzy of firing. In addition, more layoffs are pending. The Economic Times has reported that at least 3000 employees are fired every day, including in India.

Mass firing is also a result of the frenzy of hiring

Undoubtedly, the layoffs are a result of a frenzy of hiring during the pandemic. As work and entertainment shifted indoors, technology was the only avenue to stay connected to the outside world. As working from home meant better communication technology, companies went on a hiring spree to meet demand. Working from home could not be efficient unless technology improved. Same for the entertainment or gaming industry. Instead of going to theatres, people went online to pass time; they looked for new games they could play online with friends they could not socialize with; they ordered food online and therefore companies like Ubereats, Zomato, Swiggy, Hello Fresh, etc got a boost and they too had to hire more workers to meet demand. Whether it is to order groceries, shoes, clothes, sanitizers, toiletries, makeup, or baby stuff, Amazon seemed to be the go-to store for every household.

American Nightmare!

As the world opened up and people had to come out of their pajamas and back into their suits and pants, tech companies had to shift their focus to making money instead of considering long-term growth. Many of the laid-off workers were waiting for a promotion when they got the pink slip. Some were about to go on maternity leave when the bad news was delivered. Someone had just returned to work after burying his mother and bam! Another tragedy awaited him. Others had left their countries to fulfill their American dream and are now left with uncertain futures as their visas are set to expire and with no company hiring them, they will have no option but to go back. The American Dream certainly has turned into an American nightmare for these techies. Apple is one company, that neither went on a hiring spree nor is on a firing frenzy. Its growth has remained steady since 2016.

Economics drives human resources decisions such as mass firing

Undoubtedly, in the game of economics, the human touch took a back seat. Losing a job itself is a rattling experience and coupled with economic uncertainty and feelings of shame and failure, can lead to depression and anxiety. Being laid off via an email at 3 am or deactivating an employee’s account suddenly can lead to nervousness and panic. Keller Smith, who was a General Manager at Google, wrote this in a post “After 8 years at Google my journey is coming to an end. I was laid off along with 11,920 others and most all of Area 120. It’s quite a shock to wake up and see only an email with no access to corporate resources and no way to contact my direct reports or manager. I know these layoffs were orchestrated at scale, but we really have lost a crucial element of humanity in the process. Companies are organizations – of people – working together for a common cause. Cutbacks will happen, but human connection needs to be part of the process. For me, this will be a window to something new. I just need to figure out what that will be. There is a good chance I will start something new, but I am considering all options right now. Friends, if you were looking for product leadership roles, I would love to chat. Fellow A120/Googler folks, if I can help you in any way, please reach out. I’m happy to just listen, brainstorm job options/startup ideas, or whatever is helpful for you!”

Impact on laid-off employees due to mass firing

It is well understood that when employees are laid off, their finances are affected. Some may have savings, others may be given severance packages while others may have the benefit of going on Employee Insurance, to tide over for a couple of months till they are able to find something else. Yet, all of them get affected psychologically and mentally. Journal of Management and Strategy conducted research on Layoffs, Coping, and Commitment: Impact of Layoffs on Employees and Strategies Used in Coping with Layoffs in 2014 and concluded “individuals will experience significantly more health problems after being laid off from their jobs. Individuals who have been unemployed for longer periods will have a lower affective commitment to their former employers. We also found that maintaining more control-oriented coping strategies will prove to be more progressive in their job searches and more able to cope with layoffs and that coping strategies are positively related to re-employment. In addition, for individuals who are receiving unemployment insurance and other benefits, financial hardships exist resulting in significant challenges and lifestyle changes, and coping strategies are positively related to financial resources available to an individual.”

Their research also highlighted family disintegration, the collapse of social networks, and the decline of victims’ physical and mental well-being as major negative side effects (Wang-Bae, 2003). Due to financial constraints, families need to make stern changes to their lifestyle resulting in families breaking apart. Money has always been a major issue resulting in divorces or separations.

Sadly, losing a job just does not mean a cut back on finances only but also one’s time and social connections along with losing self–esteem and confidence. It is every student’s dream to land a decent job, for which they worked for 17-18 years of their lives. They share that dream with their families who invest their resources and time to see their child flourish and after being laid off, they are the ones consoling them or making their lives difficult. Instead of getting ready to go to the office and work 8 hours a day every morning, the laid-off worker will now spend that time looking for a job. Sending out hundreds of applications, which mostly land up, in junk emails, can be nothing but frustrating.

Different people cope differently, especially with mass firing. While some may strategize their search, others may just meander the path aimlessly. At this stage of a laid-off worker’s life, it is important to stay positive and reach out to their networks and not mellow out due to the loss of their dream job. The more you bemoan the past, the more difficult it is to move ahead. Whatever time spent at your previous company, was a new learning experience and acquiring new skills and it is important that at this stage, you use those skills and friends you made along the way, to find another company that values your experience.

But all is not lost in the tech sector. Forecasts have it that by 2025, an estimated 50 billion devices will be connected via Artificial Intelligence. Not that Artificial Intelligence is not already altering our lives. By getting your house cleaned with a click on your phone when you are away or synchronizing your wake-up time with your coffee machine or listening to the news using Amazon’s Alexa, AI is already dominating our lives. Deloitte’s 2023 Industry Outlook reported that tech giants are accelerating their ventures into other industries with Health Care a big example. “The global digital health market— estimated at US$211 billion in 2022 and projected to reach US$1.5 trillion by 2030—represents a huge potential opportunity for tech giants to continue their growth Investments in digital-health care.”

It is important for laid-off workers to stay motivated and to continue their job search with a little more vigor than they first started. After all, with so many people vying for similar positions in a tight market, it is important to stand out. Families, need to support them not just financially but psychologically and emphasize that loss of their jobs was not their fault. After all, “Being challenged in life is inevitable, being defeated is optional,” so said Roger Crawford.

The author is a senior journalist based in Canada, she is the author of the book, 1971: A War Story.


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