A Continuing Trend from Previous Years
The tech industry has been experiencing a tumultuous period since 2022, marked by significant layoffs. Major companies like Amazon, Alphabet, Microsoft, and Meta cut thousands of jobs, resulting in a sharp increase in layoffs.
In 2023, the trend intensified, with a 59 percent rise in job cuts compared to the previous year, totaling 262,915 employees laid off across various firms. This wave of layoffs was attributed to economic downturns, overhiring during the pandemic, and strategic restructuring aimed at maintaining financial health. Despite massive layoffs for months, the sector shows no signs of slowing down job cuts in 2024.
Alarming Numbers in 2024
According to data from Layoffs.fyi, a staggering 98,834 employees have already been let go by 337 tech companies in the first half of 2024 alone. Companies are focusing on reducing operational costs, leading to further job cuts. The fear of getting sacked is stressing out IT employees, and a new and more insidious trend is growing – silent layoffs.
The Rise of Silent Layoffs
The Indian IT and IT-enabled services (ITeS) sector is increasingly resorting to silent layoffs, which involve subtly pressuring employees to leave without making it public. The All India IT & ITeS Employees’ Union (AIITEU) revealed that approximately 20,000 technology professionals were affected by such unannounced layoffs in 2023, with the actual numbers suspected to be even higher. Silent layoffs often involve giving employees a 30-day period to find a new position within the company. Failure to secure a new role typically results in termination. This method is widespread and allows companies to reduce their workforce quietly, avoiding public scrutiny and potential backlash.
Silent Layoffs vs. Quiet Firing
Silent layoffs are often conflated with quiet firing. While both involve pressuring employees to leave, they differ in execution. In silent layoffs, companies typically provide employees with a notice period, allowing them time to transition. Quiet firing, on the other hand, involves making employees’ roles increasingly undesirable, either by overloading them with tasks, assigning insignificant duties, or giving poor performance reviews. This, in turn, compels the employee to resign.
Impact on Employees
Silent layoffs significantly impact employees, particularly experienced and higher-paid ones, as companies target them to reduce costs. Many employees going through this process are placed on performance improvement plans (PIPs), where they must quickly prove their ability to avoid termination. This often leads to stress and job insecurity, especially for those unable to secure new roles within the company.
The Path Ahead
As the tech industry continues to navigate these turbulent times, the rise of silent layoffs poses a significant challenge for employees. While companies may view these strategies as necessary for survival, the impact on employees and their careers cannot be understated. As the year progresses, it remains to be seen how the tech industry will address these issues and what measures will be taken to support its workforce during such challenging times.
