Spare a thought for the 1,300 employees of Zoom – a profitable, household name – who are to lose their jobs in the latest round of redundancies to hit the tech sector.
Fifteen per cent of the video-conferencing company’s workforce is to go, joining more than 97,000 other workers laid off from 313 tech companies this year alone.
Even allowing for adjustments in staff following the hiring spree of the Covid-19 years, the numbers losing their jobs are alarming and raise questions about whether mass redundancies are really the best way for companies to remain profitable and competitive.
Speaking in December during an earlier round of tech layoffs in the US, Prof Jeffrey Pfeffer of the Stanford Graduate School of Business described the decisions by Meta, Alphabet and others as “an instance of social contagion, in which companies imitate what others are doing”.
Worse, Prof Pfeffer claims, are the problems layoffs create for the companies themselves.
“Layoffs often do not cut costs, as there are many instances of laid-off employees being hired back as contractors, with companies paying the contracting firm,” he said.
“Layoffs do not solve what is often the underlying problem, which is often an ineffective strategy, a loss of market share, or too little revenue. Layoffs are basically a bad decision.”
If tech companies are cutting staff as a reaction to market sentiment or out of fear of a recession in the US or globally, it seems a questionable pre-emptive move. In the US, the economy is performing well, despite myriad challenges at home and abroad. According to the latest data from the country’s Bureau of Labour Statistics the US added 517,000 non-agricultural payroll jobs in January and unemployment is just 3.4 per cent – the lowest in 54 years.
Even predictions of a recession in the US are not universally held. Jack Kleinhenz, chief economist at the US National Retail Federation – the world’s largest retail trade association – said last week that although households “will probably feel recession-like conditions this year, I do not expect that the downturn will be severe enough to become an official recession”.
This may be cold comfort to former “Zoomies”, particularly given that their company has been profitable for four years, increased its net income each year and made more than $1 billion in profit in 2021. Chief executive Eric Yuan may have taken a 98 per cent pay cut and foregone his 2023 corporate bonus, but many of his former employees now face an uncertain future.
It is here, at the human level, where the effect redundancies can have is at its most stark. At best, job losses produce short-term precarity. At their worst, according to a study from the US National Bureau of Economic Research, “job displacement leads to a 15-20 per cent increase in death rates during the following 20 years”.
Politically, the need for a sustainable economy, powered by people being in work, spending and investing, was raised by US President Joe Biden in his State of the Union address on Tuesday.
“When the middle class does well,” he said, “the poor have a ladder up and the wealthy still do very well. We all do well."
That is a sentiment tech giants could adopt and, instead of letting valued employees go, turn their considerable capacity for innovation to finding new ways to retain their skills and experience.
KILLING OF QASSEM SULEIMANI
More on Quran memorisation:
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
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Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
COMPANY%20PROFILE
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CABINET%20OF%20CURIOSITIES%20EPISODE%201%3A%20LOT%2036
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A list of the animal rescue organisations in the UAE
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
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Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
England's all-time record goalscorers:
Wayne Rooney 53
Bobby Charlton 49
Gary Lineker 48
Jimmy Greaves 44
Michael Owen 40
Tom Finney 30
Nat Lofthouse 30
Alan Shearer 30
Viv Woodward 29
Frank Lampard 29
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UAE currency: the story behind the money in your pockets
More on animal trafficking
MATCH INFO
Manchester City 1 Chelsea 0
De Bruyne (70')
Man of the Match: Kevin de Bruyne (Manchester City)
UAE currency: the story behind the money in your pockets
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
