The shock of mass layoffs is just the beginning for companies

“After almost 8.5 years with Google, I received notice this morning that I have been affected by the reduction in the workforce and no longer have a position with the company. . . I envisioned spending my entire working career at Google, so this news has been particularly difficult to swallow.”

LinkedIn is inundated with posts I like this of Google workers who suddenly lost their jobs this month via email. Some had dedicated decades of his life to the company. google father, Alphabet, is among the tech giants that are cutting their workforce by the thousands. The sector in general has eliminated around 200,000 jobs in the last year.

A fired Google employee told the Financial Times: “The company’s motto is ‘respect the user, respect the opportunity and respect each other.’ Who are they kidding?” As harrowing as it is to lay off entire teams, and as bad as it is for the public image and management style of companies, there are good reasons why mass layoffs have to be quick. of the layoffs could be attributed to an effort to protect intellectual property and customer relationships, prevent staff from transferring data, and other security reasons.

However, once the initial shock has passed, are employers aware of the long-term consequences of their actions? Sandra Sucher, co-author of The Power of Trust: How Companies Build It, Lose It, and Regain It, notes that research shows layoffs have a detrimental effect on employees and corporate performance. “The reason mass layoffs aren’t profitable is that they destroy trust within an organization,” he says.

Companies that have invested years and large amounts of money in training their staff are letting not only institutional knowledge, but also their relationship networks, walk out the door.

A friend from a major tech company was in a Slack chat with 15 colleagues, working to resolve a bug. So 12 of the group were fired. The Slack chat died and the issue was left unresolved. “You don’t just replace that story, that conversation, that experience,” he says.

So-called survivors, like my friend, are now less likely to trust their employer and will be anxious about future layoffs. This remaining workforce may resent having to take on a heavy workload under more difficult circumstances, which in turn will lead to more staff departures. Cutting the workforce by just 1 percent may lead to a 31 percent increase in voluntary staff turnover next year, according to to the researchers at the University of Wisconsin-Madison and the University of South Carolina.

Goodwill is fragile. Most people who thrive at work do more than what is asked of them. Mass layoffs send the message that instead of hiring someone for all they bring to the job and their future potential, they are just a cog in a machine.

Workers who choose to stay, knowing that hard work and good performance will not guarantee employment, are more likely to do the bare minimum or be less innovative when the company needs them most. All of this impacts profits in the long run.

Companies like Alphabet are doing the right thing in the short term: They pay for layoffs, bonuses and remaining days of leave, as well as six months of health care, access to job placement services and immigration support. But those laid off can be affected for life, as many were after the 2008 financial crisis. your health plus your finances. A new job with equal or higher pay often doesn’t come right away.

Mass layoffs impact both those leaving and those left behind, and that matters in the long run. Companies can learn from what happened: they must grow more sustainably and hire in a more disciplined way. As Sucher says, if executives are serious about employee well-being, they must plan for future changes in the workforce on an ongoing basis and get through difficult periods. Leave payments, retention bonuses, pay cuts, and voluntary layoffs are options. If the pandemic taught corporations anything, it was that there are other ways forward in difficult times.

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