July 20, 2022

How Tech Leaders Can Address the Rise in Layoffs & Rescinded Offers

Written by

Job layoffs and rescinded offers are coming in high numbers so far in 2022, especially in the technology industry where more than 24,000 tech workers have already been laid off in mass job cuts so far in 2022. Some of the companies engaging in layoffs include Netflix, Coinbase, Tesla, and Peloton. The Coinbase layoff stories are especially troubling because many employees were assured they were safe before they were eventually laid off by email.

Graph showing the number of tech employees laid off each month in 2022.

Companies are rescinding offers as well, causing difficulty for job seekers who have turned down other opportunities in favor of the now non-existent offer. And while companies often get a bad rap for how they handle layoffs and rescinded offers, these are unfortunately a part of running a business. As a leader, how can you help your organization avoid common pitfalls with layoffs and rescinded offers and do right by your people?

Make Other Cuts First When Possible

All too often, we hear of mass layoffs in companies that simultaneously approved bonuses for their executive team. And while executives certainly deserve to get paid like the rest of employees, it’s a bad look to give yourself a bonus while endangering your staff’s livelihood. Instead, try to make cuts in other departments before laying people off when possible. Maybe you have a big travel budget, but can attend virtual conferences or handle client meetings over Zoom. Or maybe pausing those executive bonuses would allow you to keep more people.

“With careful planning, some amount of business risk can be minimized and some layoffs avoided,” says Amy Spurling, Founder and CEO of Compt. “That said, a rapid and dramatic shift in the market cannot be predicted from a timing perspective.” When layoffs can’t be avoided, you can at least soften the blow with thoughtful communication, severance packages, and letters of recommendation.

Don’t Make Promises You Can’t Keep

One of the biggest problems with the layoffs from some of these big-name companies is that they promised employees or new hires that they would be safe, only to eventually lay them off or rescind their job offers. If you can’t be sure someone’s job is safe from cuts, don’t tell them it is. That’s the fastest way to leave a bad taste in the employee’s mouth and ensure it’s harder to hire new people when the business starts trending upward again.

LinkedIn post talking about layoffs.

Use Technology to Inform Your Layoffs

You should “have transparent and clear reasons for why people are laid off,” says Chris Nicholson, data science team lead at Clipboard Health. “In some companies, that’s seniority. In others, maybe there is a strategic shift that means a whole team or business unit no longer makes sense. It’s the job of leadership to exude clarity and tell people why things are happening.” But how can you make sure you’re laying off the right people?

First, decide on the criteria you want to use to make your layoff decisions. Then, use your technology to inform those decisions. For example, by using a human resources information system (HRIS), you can sort your employees by seniority and determine how many of the newest employees you’ll need to lay off in order to make the necessary cuts based on their salaries. If you want to make sure you’re keeping your best-performing employees, use performance management software to see which employees always meet or exceed their KPIs. 

Learn more about Building a Strong Executive Team & Making Hard Personnel Decisions.

Current and Future Employees Deserve a Phone Call

Even if you have to lay off a large number of people, your employees deserve the courtesy of a phone or Zoom call. You’re endangering their livelihood and should give them the chance to ask questions. Even if you have to do a group Zoom meeting, that’s better than a mass text or email.

“Whenever possible, the message should come from the employee’s manager or HR directly,” says Lisa Calick, Director of HR Advisory Services, SPRH at Wiss & Company. “Any business owner wants to make sure the message always shows compassion for the people being let go and provides an opportunity for those affected to have a voice, even if through a separate communication channel. Layoffs are tough but showing employees that you care goes a long way.”

Layoffs Affect People, Not Numbers

It’s important to remember that layoffs affect real people and you need to approach them with the gravity they deserve. Layoffs should only be used as a last resort when there aren’t other options that make sense for your company. And if you do have to engage in layoffs, be honest about it and make sure you’re using technology to inform those layoff decisions, so you have a clear picture of who you terminated and why. Finally, communicate directly with laid-off employees instead of leaving the announcement to an email or text message.

The good news is that not all tech companies are engaging in layoffs. In fact, many, like TechnologyAdvice, are still growing! If you’ve been affected by layoffs and are looking for a new role, check out our open positions. We offer full-time remote, hybrid, or in-office positions as well as a host of great benefits, like unlimited PTO and health insurance.

Get a list of the Best HRIS Systems & Platforms to inform your layoffs.