Layoffs are very concerning on a micro level. If someone does not have adaptability, the amount of stress that layoffs create will take an overwhelming toll on behavioral and physical health. It also increases mortality and morbidity.
So why are companies releasing large swaths of employees? According to Jeffrey Pfeffer of the Stanford School of Business…the answer is Copycat Behavior.
Stanford states:
Moreover, layoffs don’t work to improve company performance, Pfeffer adds. Academic studies have shown that time and time again, workplace reductions don’t do much for paring costs. Severance packages cost money, layoffs increase unemployment insurance rates, and cuts reduce workplace morale and productivity as remaining employees are left wondering, “Could I be fired too?”
Copycat behavior is the main culprit, Stanford continues:
Could there be a tech recession? Yes. Was there a bubble in valuations? Absolutely. Did Meta overhire? Probably. But is that why they are laying people off? Of course not. Meta has plenty of money. These companies are all making money. They are doing it because other companies are doing it.
Current estimates put the year 2022, having over 120,000 people laid off at some of the biggest companies in the tech world which includes Meta, Amazon, Netflix and Google.
If layoffs are simply a minimal effort, masking a symptom instead of fixing a root cause, then what is the root cause? And what is the solution?
We can learn from the Stanford article this great example and an innovative way to save lives:
One thing that Lincoln Electric, which is a famous manufacturer of arc welding equipment, did well is instead of laying off 10% of their workforce, they had everybody take a 10% wage cut except for senior management, which took a larger cut. So instead of giving 100% of the pain to 10% of the people, they give 100% of the people 10% of the pain.
Getting fired totally sucks. It can lower your self-esteem and put you into a temporary slump. But as Patrick Bet David teaches us, the layoff is part of the journey, and you wouldn’t be where you are today, without evolving from your previous obstacles.
Here’s Pat’s advice on recovering:
https://www.youtube.com/watch?v=j0-x2HsRD70
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