Navigating Layoffs in 2024: A Reality Check for the Tech Sector

The second half of 2024 has been marked by an unsettling trend—tech layoffs. With over 100,000 job cuts globally from companies like IBM, Microsoft, and Cisco, the tech industry is facing another round of restructuring. While economic pressures are driving cost-cutting measures, the human impact is profound, affecting workers at all levels.

IBM, for instance, recently implemented a second wave of layoffs, focusing primarily on senior programmers, sales, and support staff. These cuts come as part of IBM’s "workforce rebalancing" strategy aimed at reducing costs. While the company expects to maintain a steady workforce overall, these layoffs are impacting thousands, with reports that IBM has quietly enforced non-disclosure agreements (NDAs) to keep details under wraps.

While layoffs are a response to current economic challenges, they bring long-term repercussions. Research shows that organizations often experience ‘declines in employee morale’, engagement, and trust—factors that are crucial for sustaining a healthy, productive culture. Companies like Airbnb have demonstrated that a more empathetic approach to layoffs can mitigate some of this fallout, as seen in their response during the pandemic.

However, not all companies manage the process with care. Google’s mass layoff notifications via email left employees feeling disconnected and disregarded. In contrast, stories like that of Vivek Gulati—a tech-industry veteran who has faced layoffs multiple times—highlight the value of ‘personal communication’ during such transitions. A personal touch can make all the difference, even in difficult times.

The Long-Term Costs of Layoffs

The negative impact of layoffs is often underestimated. Beyond the immediate financial savings, organizations face potential “underperformance” for up to three years post-layoff. The loss of valuable expertise, team cohesion, and trust can undermine the very goals layoffs are meant to achieve. Additionally, companies that resort to layoffs frequently face a dip in innovation and agility—skills essential for long-term success.

A Rebound Ahead?

Despite the ongoing challenges, the IT services sector is projected to see a rebound in ‘fresher hiring’ in FY25. This signals a potential recovery, though the focus remains on weathering the current storm of restructuring. Companies will need to balance cost-cutting measures with strategies to maintain employee morale and protect their cultures from long-term damage.

At our startup, we recognize the importance of ‘people-first solutions’ in these turbulent times. Layoffs may be a reality, but how we manage them—through empathy, communication, and careful strategy—makes all the difference. As HR professionals, we aim to help companies navigate these difficult transitions while preserving the well-being of their workforce.

Read more:

🔗From Microsoft to IBM: Tech layoffs in 2024