Getting fired or not, it’s still not in your hands. But you can know whether you are the next employee!
Do you find yourself palpably paranoid every time your manager or HR invites you to a one-on-one meeting? Are you constantly getting anxious every time a new email lands in your inbox? Well then, welcome to the season of layoffs, where your employment tenure is uncertain, and every day is a new dreading episode.
But hey! Just remember, it’s not in your hands. Whether you just clinched the title of Employee of the Month or you took a one-week holiday after begging your boss, the decision to terminate employment is often beyond an individual’s control—it’s the systemic reality.
Layoffs are often a continuation of broader economic fluctuations, like the tech downturn that began last year. They occur due to various factors, including shifts in consumer dependence and increasing interest rates. The growing apprehension is that 2023 may continue to experience a global recession, implying more job losses. This projection is disheartening for the average salaried individual who might find themselves jobless as companies scramble to slash their expenses.
If you’re among the multitude concerned about being laid off, this article explores the criteria companies use to determine who to let go and who to retain.
How do companies decide who to layoff: An overview
Business-first approach: Layoffs based on role importance
A lot of different factors are considered when laying off employees. The first includes ensuring the business runs smoothly with the least resources possible. To do so, a company would first let go of employees who aren’t essential to the functioning of the business, for instance, Amazon fired employees who worked at Amazon stores, PXT organizations and gaming studios.
So, jobs that don’t necessarily generate revenue would be the ones to go, and those that actively generate revenue would stay. In a tech company, this would mean that once a product has been developed, the developer’s job would be at risk, and those of the engineers and sales and marketing teams would be safe.
Layoffs and skill set: Are you keeping up?
The second factor could be the employee’s knowledge and skill set. This implies keeping employees who bring new and diverse skill sets to the table and letting go of those whose skills lag. It would mean that relatively older employees get laid off, and younger ones thrive with advanced skill sets.
Companies are constantly seeking employees who possess in-demand skills like data analysis, operations, cloud computing and several others. Hence, it’s crucial for employees to continually upgrade their skills and maintain versatility.
Seniority matters: The last-hired-first-fired policy
This method of layoffs is called the last-hired-first-fired policy. As per this policy, the senior-most employees are the ones that survive the layoff season, and the lowest rung of the ladder is the one that goes first. One of the reasons for this could be that those in senior management positions have already worked through different levels of the company and could step down and take on more minor roles when the going gets tough.
According to research conducted by workforce intelligence company Revelio Labs, companies tend to select their junior employees to be laid off first. Most employees getting laid off right now have only spent about a year with their organization.
Then again, there is another thing to note down. However, it’s important to note that being a junior employee doesn’t solely mean fewer years of experience. Companies consider the nature and value of your work and whether your tasks could be delegated to other employees or departments.
Role status: Full-time vs. contractual employees in layoffs
During layoff seasons, some companies may be inclined to provide security to their full-time employees. Thus, those working part-time or on a contractual basis like freelancers will likely be let go. The ex-Vice President of Human Resources at Microsoft said contract workers are the most “at risk” when layoffs occur. Since companies don’t have the same liabilities toward contractual employees as toward full-time workers, laying them off reduces the threat of legal action.
However, unless an organization primarily comprises contractual workers, laying them off wouldn’t make much of a difference to the company’s financial health. Thus, the employer would have to use one of the other criteria we have mentioned along with this to cut costs.
Financial considerations: Cost-cutting and layoffs
Finally, since the entire layoff process boils down to cost-cutting, how much the employee costs the organization would also have to be considered when deciding who needs to be let go. So, employees who charge higher wages than their peers, irrespective of the job category, are likely to be laid off. Similarly, an employee’s return on investment (ROI) would also be factored into layoff decisions. The higher an employee’s output, the higher their chances of staying on.
Getting into a big corporation doesn’t necessarily mean having a secure and stable job. Google, Microsoft, Amazon or Accenture and many other similar companies need to lay off their workers due to a change in economic factors or business strategies. Sometimes, tech companies over-hire fresh recruits, leading to budget overruns and subsequent layoffs or salary cuts.
Preparing for the unpredictable: A survival guide
In conclusion, companies generally use one or more of these factors to determine who needs to stay and who needs to go from their workforce. While this guide can give you an idea of how vulnerable you are during the next round of layoffs, it cannot predict with absolute certainty who will be let go. To safeguard yourself, consider taking on additional office responsibilities, showing your employer your invaluable contributions to the company. It is also advisable to keep your LinkedIn profile and resume updated, preparing for potential job switches.
Also read:
- How to Make Your Career Recession-Proof
- Top 5 Recession-Proof Jobs
- Major Tech Layoffs of 2022
- Tech Downturn: Why Silicon Valley Is Dealing with a Slew of Layoffs
Header image courtesy of Pexels
