How quickly things can change
In 2019, according to a report by The Conference Board, CEOs across all global regions ranked ‘attracting and retaining top talent’ as their number 1 internal concern.
In 2020, however, the COVID-19 pandemic dealt a crushing blow to the global economy. A survey by the Society for Human Resource Management (SHRM) found that 31% of employers reported laying-off employees in 2020 due to the COVID-19 pandemic. Furthermore, U.S. companies announced a total of 2.3M job cuts in 2022, the highest annual total on record, according to a study by Challenger, Gray & Christmas, Inc.
Fast-forward to 2023 and job losses are still prominent in the headlines. The tech industry has experienced another round of massive layoffs in March, with Meta and Amazon announcing significant job cuts. In January, Meta announced 11,000 layoffs, and then later revised the figure by announcing another 10,000 job cuts as well as closing down 5,000 open job roles.
According to sources of TechCrunch, Amazon’s new layoff will mainly impact employees in cloud hosting, human resources, and advertisements. This has put employees from big to small companies at risk, just as the world is recovering from Covid-19 three years on.
‘Big Tech’ might be the canaries in the mine, but other sectors are also at risk
Silicon Valley Bank’s collapse on March 10th was the second-biggest bank failure in US history, with $212 billion of assets. Global inflation is also at its highest since 2008, reaching 4.9% in January 2022, according to the International Monetary Fund (IMF).
This is placing a strain on consumer finances with a well-reported ‘cost of living crisis’ gripping economies across the world. It is not surprising, therefore, that job cuts are reaching other sectors.
Take the consumer sector, where Disney laid-off 7,000 employees and later announced a further 4,000 job cuts, Ford announced 3,800 employee layoffs, Sainsbury’s Argos announced 1,400 layoffs, and Philips cut a further 6,000 jobs just months after laying-off 4,000 employees.
Companies typically lay-off their staff for various reasons, but the most common ones are changes in business strategy, cost-cutting measures, and economic downturns. Cost reduction triggered by an economic downturn is the common factor behind most of these job cuts.
What can companies do when faced with the prospect of layoffs?
One strategy is to turn to AI and automation. These technologies can help companies make better-informed decisions about areas where cost savings can be made without laying-off staff. By automating repetitive tasks and streamlining workflows, companies can improve productivity and reduce costs. If layoffs are unavoidable, AI and advanced analytics can help identify which roles to cut.
To make the most of AI and automation, companies need to gather and analyse data about their workforce. This data can include factors such as employee skills, headcount, salaries, performance, and potential for retraining. It can also include data on external factors such as economic trends, industry developments, and customer demand.
Comparing workforce data against direct competitors and sector averages can also yield insight on where each company’s key cost reduction opportunities may lie. A pitfall that all companies will want to avoid is over-cutting and suffering the costs of re-hiring, or reducing headcount in the wrong areas in a way that undermines competitive advantage.
With this data, companies can also identify areas where they can automate tasks and retrain employees for new roles. For example, if a company is planning to automate its customer service function, it could retrain some customer service agents to work in data analysis or machine learning roles.
Conclusion
In conclusion, companies can survive the layoff tsunami by using AI and automation to make better-informed decisions about which roles to cut and identify areas where cost savings can be made without laying-off staff. By automating repetitive tasks and streamlining workflows, companies can improve productivity and reduce costs.
At Deltabase, we work with the world’s leading advisors and consultancies, providing them with deep and accurate benchmarking on company headcount, skills, salaries, employee sentiment and culture versus key competitors and sector averages. Since we use open-source intelligence (OSINT) techniques, no input from companies is required and our intelligence is rapid and cost-effective.
Our customers are helping their clients navigate the layoff tsunami in an evidence-based and data-driven manner, reducing bias and mitigating impacts on people by ensuring that any workforce reduction decisions are necessary, proportionate and grounded in evidence.
Contact us if you would like to learn more about Deltabase and how we can help