Reports of mass layoffs have garnered significant attention since the inception of ChatGPT, especially with the looming shadow of an alleged recession. The recent announcement by UPS about laying off 12,000 employees and reports indicating the loss of approximately 30,000 tech jobs in the USA in January 2024 have sparked widespread discussions and heightened concerns.
Layoffs in companies are quite normal and have been so for decades. Private jobs worldwide differ from government jobs, as they are not guaranteed until the age of 60 with a salary and pension beyond. Private jobs depend on the competency and ability of employees to keep up with the times.
Some argue that as employees age, there is a concern about potential layoffs, but that is a matter of perspective. It is the point where the company assesses whether the employee is contributing or merely existing. Employees who are perceived as a burden to the company are often let go. Particularly, as the tenure lengthens, salaries tend to increase, and once an employee reaches middle management, the risk of layoff increases unless they play a breadwinner role in the company.
At this point, the employee faces the challenge of winning the loyalty of seniors without threatening their positions while also maintaining positive leadership for subordinates. Those who efficiently manage this with hard work, social skills, and expertise become less susceptible to layoffs.
When a middle-aged middle management employee commands a high salary and four recently graduated young engineers are willing to work and deliver the same for a quarter of the salary each, it is understandable for any company to replace a single older employee with four younger ones at the same cost.
Moreover, with relatively modest salaries being offered, predominantly, manual labor jobs have been thriving. Conversely, it's the higher-paying white-collar professions, particularly in fields like finance and technology, that have been facing challenges.
Furthermore, each publicly listed company is required to demonstrate profits at the conclusion of each fiscal year. Achieving this necessitates significant business activities. However, if the financial accounts still require additional funds, the only remaining recourse is implementing mass layoffs within the company to preserve salaries and diminish the overall loss percentage.
In essence, it should be acknowledged that every employee in a private company is essentially engaged in a business where their job security is contingent on the overall performance of the company and its year-end financial standing.
Kiran Sharma