If you’ve kept up to date with tech news in the past month, you’ve likely seen the stories of layoffs and rescinded offers. Yesterday, it was Coinbase, Redfin, and Compass. Even companies as big as Uber and Meta are entering into hiring freezes as they wait to see what the shaky economy does next. If you are on LinkedIn, you’ve likely come across the heartbreaking stories of those who were let go. People who have mortgages to pay and children to feed, who just months after accepting a dream job are now having it ripped away from them. Then there are the stories of the recently graduated international students, who have 90 days to find a new job that will help sponsor a visa or be forced to leave the country.
The stories are upsetting, but they are also worrying for many people within the tech industry. There is currently a level of uncertainty in the industry previously only seen during the dot-com crash in 2000. I won’t pretend to know what will happen next (although I remain optimistic we will avoid a recession and those laid off will find quick employment elsewhere), but I did want to comment on the impression those companies that lay people off and rescind offers make.
First of all, layoffs are almost always the result of poor planning from leadership. Side note, I have yet to work at a company that does headcount planning (forecasting how many people need to be hired) well. My guess is that it is a small and specialized field that takes a lot of experience to master. Anyways, take Peloton for example; a company that boomed during covid lockdowns and doubled its workforce without thinking ahead to what would happen once gyms opened up again. Once gyms did open, demand fell, and the thousands of people hired during covid suddenly found themselves with shrinking workloads and later out the door. All of which might have been avoided if Peloton’s leadership had taken into account a future slow in demand and appropriately and intentionally scaled their workforce.
When a company makes layoffs, it often can damage an employer’s brand irreparably. I would be hard-pressed to find a well-qualified candidate who would leap to take a job at Peloton right now. When a company makes layoffs, it has to assume that attracting talent will be 10x harder in the future. This is an additional cost that bites…