(David Odisho/Getty Images)
Over the last few weeks, we’ve counted at least two dozen rounds of layoffs at tech companies, including:
- Amazon (laying off 10k people, 0.6% of their workforce)
- Asana (9%)
- GoFundMe (12%)
- Juul (30%)
- Lyft (13%)
- Meta (13%)
- OpenDoor (18%)
- Redfin (13%)
- Stripe (14%)
- Upstart (7%)
- Zendesk (5%)
- Zillow (5%)
- Twitter, where Elon Musk has laid off reportedly 50% of the staff and thousands of additional contractors.
There are undoubtedly more to come. And it’s not all about bloated tech companies shedding staff. As Ford CEO Jim Farley noted in the FT this week, “It takes 40% less labor to make an electric car.”
When it comes to just business behavior, the issue is not whether or not layoffs happen, it’s how they’re done. If you’ve ever been laid off, you know exactly what I’m talking about. Fast Company (“Why So Many Companies Keep Messing Up Major Layoffs”), Fortune (“Tech layoffs are disproportionately hitting HR and DEI teams”), and CNBC (“Leading through layoffs”) have all touched on that this week. For extra insight, we reached out to Harvard Business School management professor Sandra Sucher. “If you want to shoot yourself in the foot with layoff survivors and future talent, do what Twitter did,” she said, referring to the criticisms aimed at Elon Musk’s public approach to the issue.
Sucher referenced the disparities in communication and severance packages she’s seen, noting that a just layoff can include robust reemployment support (Meta has offered some form of this), complemented by counseling and mental health support. She also acknowledged that corporations can be more focused in how they approach hiring during a boom period that will inevitably end, through the best practices of “disciplined hiring, consistent performance management to ensure that people who are there should be there, and ongoing communication about performance and inflection points in business.”
We’d also note the importance of ensuring layoffs don’t disproportionately affect one demographic group or another, and that if “hoarding workers” is no longer an option, they’re done in ways that minimize the impact on core stakeholder commitments.
As painful as they can be, layoffs don’t have to be unjust.
This Week in Stakeholder Capitalism
Amazon announces plans to lay off 10,000 workers from its devices, retail, and human resources divisions.
Eli Lilly’s stock dropped after an imposter account tweeted that the company would be giving away insulin for free, in a flurry of fake corporate Twitter accounts causing havoc over the weekend.
Ford warns that the shift to EVs will require 40% fewer workers and discusses why automakers will need to shift to more vertical integration so that “everyone has a role” in the transition.
Google agrees to pay $392 million in a privacy settlement to 40 states over the company tracking the locations of users without telling them.
HarperCollins workers strike this week asking for higher wages and better family leave.
What’s Happening at JUST
Martin recently joined CNBC’s Work Summit to discuss shifting expectations between employers and employees and how our most recent survey insights from our 2022 Issues and Americans’ Views on Business reports can provide a roadmap for companies to navigate current and emerging headwinds.
Data on the impact of human capital management is scarce. That’s why we’ve teamed up with the Ford Foundation to create a request for grant proposals focused on advancing human capital management research and accessibility. Help us improve our collective understanding of how companies manage and support their workforces, and how it impacts their bottom line. Submit your proposal now through December 9!
“Employers now have this front and center. They understand the impact, they see the impact…in workplace engagement, presenteeism, productivity, turnover. They see the data that shows if someone is dealing with a mental health challenge themselves, or in the family unit, they carry that into the workplace. It reduces their productivity and engagement, and it reduces the productivity and engagement of those around them. So whether an employer enters this through a philosophical lens or through a business lens, it brings them to the same place. They have to step up, with expanded dialogue, awareness programs, and services around that. We think that’s a positive.”
- Cigna CEO David Cordani, speaking on Fortune’s Leadership Next podcast on corporate America’s rising interest in workers’ mental health.
“Regardless of the exact definition, the key takeaway is that the tech industry has an outsized influence on financial markets and therefore receives significant media attention, but it is not large enough for tech layoffs to cause a meaningful labor market slowdown on their own.”
- A memo from Goldman Sachs to its clients to say that despite the headlines, tech sector layoffs alone can’t cause a market slowdown as they’re a very tiny sector of the U.S. market.
“We will need to be extremely hardcore…this will mean working long hours at high intensity. Only exceptional performance will constitute a passing grade. If you are sure that you want to be part of the new Twitter, please click yes on the link below.”
- Elon Musk, in a lambasted midnight email to employees that included a pledge that, if not signed by 5PM ET the next day, would lay you off with three months of severance pay.
Must-Reads of the Week
New York City, once a leader on minimum wage, now finds other cities blazing past it, according to The New York Times.
Axios shows how the flood of layoffs hitting the tech industry will likely make November the worst round of layoffs for the industry in years. Fortune reveals that tech layoffs are disproportionately hitting HR and DEI teams, and discusses why that’s short sighted.
With the complete crumbling of FTX over the past week and potential criminal investigations coming, The Wall Street Journal looks at how a crypto industry darling imploded over the course of a few days.
The Atlantic posits that with Facebook and Twitter facing immense decline and TikTok becoming a possible security threat, the age of social media is coming to an end.
Chart of the Week
With the midterms bringing politics and big business to a crossroads, we look back at our 2022 Americans’ Views on Business Survey to see what social issues Americans believe CEOS need to address as trust in government falters.
Get to Know JUST
Former Global Chairman and CEO, EY
JUST Board Member
Mark Weinberger led EY through a purpose-fueled transformation centered on building a better working world. Mark’s work experience has ranged from leading a global business to working at the highest levels of government and as an entrepreneur. He served as Assistant Secretary of the U.S. Department of the Treasury and in advisory roles in the Bush, Clinton, Obama, and Trump Administrations. Currently, he sits on the boards of various organizations including Johnson & Johnson, MetLife, and Saudi Aramco.
Mark is also an Executive Advisor to C-suite peer communities G100 and World 50. This week, these organizations joined executive search firm, Russell Reynolds Associates, in announcing a new cohort of their Next Generation Director program. Learn more about the program, whose 2023 cohort aims to increase representation of women of color on corporate boards.