Change happens!
We might think that constant change is new, but as Niccolo Machiavelli said, more than 500 years ago, “Whosoever desires constant success must change his conduct with the times.”
Is “The Great Layoff” replacing resignations in the jobs market today and, if so, what is the potential impact on your business and your strategy for the foreseeable future?
Two years ago, we were experiencing “The Great Resignation” with businesses finding that job vacancies were outstripping candidates – particularly candidates of the quality they wanted – and so were competing to hold onto their staff.
Last year we saw the phrase “Quiet Quitting” hitting the headlines: demotivated staff were no longer resigning but just doing the minimum necessary to retain their jobs, and employers unwilling to remove them due to the ongoing shortage of candidates.
However, with inflation and economise around the world slowing, many employers are now cutting costs through implementing layoffs – most noticeably in the big businesses. In fact, since the last part of 2022, some 200 000 US workers have been laid off – many in the tech sector which was previously consider ‘safe’ – as this report details.
Among these were announcements in January alone of 18 000 people being laid off by Amazon, 12 000 by Alphabet (Google’s parent company) and 10 000 by Microsoft – and we’re not halfway through Q1 this year – while Q4’22, with almost 80 000 tech jobs lost, showed a level about a third higher than the pandemic peak of Q2’20. But it’s not just companies in the developed world that are embarking on layoffs – South Africa’s most valuable company by market capitalisation, Naspers, has also announced significant cuts, so it’s a global phenomenon.
Suddenly, therefore, employers are finding that the proverbial boot (“shoe” in the US) is on the other foot. Businesses are no longer scrabbling to find people but deciding who to keep, and many staff are anxiously looking at how they can continue to retain their jobs.
This, of course, is not to say that things are easy for employers. Their best staff are, if anything, more at risk of being poached by rivals who see the opportunity to secure these people on favourable terms when they’re nervous about their current roles. And the combination of inflationary costs with slowing, or even negative, growth rates in a business, coupled with the short-term costs of major layoffs, can be hazardous for the business in terms of cash-flow and profitability, so requiring changes/additions to your strategy and risk register.
So the need for companies to retain their top performers remains unchanged, even as it arguably becomes more difficult to do so. And with inflation having eroded real earnings over the past year, salary increases for those staying may well be needed for retention – a survey published in mid-January suggested some 61% of US workers are thinking about resigning this year, despite the current conditions.
“The Great Resignation” threat, therefore, is not over for companies that are paying insufficient attention to their staff; leadership really has to continue to consider not just to top performers, but all staff and the culture of the business as a whole. Bad management practices will continue to cost companies, both indirectly and directly.
And, when looking at the need to reduce costs and staff, there is definitely a right way and a wrong way: last year, for example, Stripe set the standard for the right way and Twitter for the wrong way, as this article in Fortune explains.
So, change continues, and business leadership needs to keep on its toes: ensuring a sound culture, unambiguous but understanding communication, and a continued focus on all the stakeholders in a business, updating strategy plans and risk registers to reflect the new conditions.
As Peter Drucker said, “The greatest danger in times of turbulence is not the turbulence – it is to act with yesterday’s logic.”
And remember, too, Jack Welch’s wise words, “Change before you have to.”
Your business could depend on it!
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Following a career spanning nearly 50 years in the technology industry across three continents, with three decades in CxO roles leading significant, sustained growth in revenue and profitability, I now work with successful owner-led businesses to further enhance their growth, profitability and business value.
If you’d like to discuss your business strategy, culture, goals, or anything else related to your business, book a confidential, free 30-minute call with me here.
I’d be delighted to talk with you.
If you’d like to read further, these related posts might be of interest:
- Will Your Business Survive “The Great Resignation?”
- “The best way to predict your future is to create it.” – Abraham Lincoln
- Reduce Costs by Defining Your Ideal Employee
- Leadership in Times of Crisis – 5 Cornerstones of Effective Action
- 3 Things You Must Do to Keep Your Top Performers and Your Company in Great Shape for the New World of Work
- Inflation – Reducing the Risks to Your Business with the 5 Cs
- Planning to De-Risk Your Business Against Future Threats
- 10 Principles for a Sustainably Excellent Culture – Beginning With “We”
- The Power of Accountability in Business Success
- 3 Rs of Great Leadership – Results Reputation and Relationships
- “If there’s one thing that’s certain in business, it’s uncertainty.” – Stephen Covey
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If you’re wondering about the illustration / image at the top of this post, it was produced by the Artificial Intelligence application DALL-E (from the folks that brought you ChatGPT) in response to me requesting a photo-real image depicting people being laid off or retiring.
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