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Tech companies are laying off an average of 988 employees per day this year.
The total number of employees laid off from the beginning of the year to now is 119,565 thousand people.
The company that announced the most layoffs is $ORCL with 30,000 employees last March.
So, if a company announces a decision to lay off employees, is it considered negative or positive?
Or earlier, why did companies lay off employees?
1- Workforce inflation: During the COVID period, companies hired "crazy" due to high demand for "online" tools and software at that time,
now the pace has slowed, so they are addressing this issue.
2- Cost reduction: This is the most important and obvious reason, any recruitment reduction activity directly reflects on the company's costs and increases profits.
3- Artificial intelligence: Companies are starting to shift some tasks to artificial intelligence, which reduces the need for staff.
4- Investor pressure: Investors demand higher profits, part of the solution is reducing costs as mentioned in point 2.
5- Restructuring: And this decision was part of a larger plan affecting all departments and operations of the company at that time.
The question is, is this news negative or positive for companies?
Honestly, it’s a mixed bag, and in my opinion, it takes time to see the results of the decision.
If it reflects in the company's profits and performance remains good, then it’s positive because it has addressed "workforce inflation."
If there’s no revenue growth or it weakens, then it’s negative, and worst of all if this decision affects the work environment, causing resignations and loss of talent.
Here we say that this decision is a disaster...
The total number laid off from the beginning of the year until today is 119,565 employees. The company that announced the most layoffs was $ORCL with 30,000 employees in March.
So, if a company announces a layoff decision, is it considered negative or positive? Or first, why do companies lay off employees?
1- Job inflation: During Corona, companies hired in a "crazy" way due to the high demand at the time for online tools and programs, now the pace has slowed, so they are addressing the issue.
2- Cost reduction: This is the most important and obvious reason; any hiring cut directly reflects on the company's expenses and increases profitability.
3- Artificial Intelligence: Companies have started shifting some tasks to AI, which reduced the need for employees.
4- Investor pressure: Investors demand higher returns, and part of the solution is reducing expenses, as mentioned in point 2.
5- Restructuring: The decision at that time is part of a larger plan that affects all departments and operations of the company.
The question: Are these news items negative or positive for companies?
Honestly, it’s mixed, and in my opinion, it takes time to see the results of the decision. If it reflects positively on profitability and the company's performance continues well, then it’s positive because it has addressed "job inflation." If we see no revenue growth or weakness, then it’s negative, and the worst is if the decision impacts the work environment, leading to resignations and loss of expertise. Here, we say the decision was catastrophic...