Why are Twitter, Meta, Disney, Amazon laying off and what does the future hold? Experts weigh

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From Twitter to Meta, Amazon and Disney, several tech giants have laid off their staff by the thousands, raising concerns about the impending recession.

Twitter, which has been in the news since the announcement of the takeover of Elon Musk, has reportedly laid off a large number of its contract workers. As reported, the microblogging platform had to lay off the workforce without giving notice to full-time employees who collaborated with it.

Apparently, 4,400 of Twitter’s 5,500 contract employees, on average, have been laid off. It should be noted that the action comes after more than 3,700 full-time Twitter employees were laid off earlier this month, just days after Musk bought the platform.

Some of Twitter’s contract employees were also from India. Reports claimed that the company had laid off the entire marketing and communications team in the country.

Additionally, it was said that the microblogging platform has laid off 180 out of 230 employees from India’s marketing, communications and other departments.

Following reports of the layoffs, Twitter’s new owner Musk reportedly told the B20 CEO conference in Bali via a video link that “I’ve got too much work on my plate, that’s for sure.” .

However, Twitter is not the only one currently being criticized for such moves, but also the top social media player, Meta.

On November 9, Meta CEO Mark Zuckerberg announced that the company would lay off about 11,000 workers, or 13% of its global workforce.

According to reports, up to 100 of India’s roughly 1,000 employees, mostly software engineers and other tech professionals, were affected by Meta’s decision.

As an additional cost-cutting measure, Meta has chosen to halt development of its two first-to-market smartwatch projects and its Portal video call smart displays.

Zuckerberg reportedly told his staff, “I want to take responsibility for these decisions and how we got here,” adding that “it’s hard for everyone” and that he was “sorry.”

Besides Twitter and Meta, Amazon has also joined this frenzy. It was reported recently that to reduce costs, the company is reviewing its inefficient divisions.

Amazon told some of the employees in underperforming units to seek work elsewhere within the company after a month-long review. The company is also closing teams in industries like robotics and retail and moving employees from some teams to more lucrative divisions.

This list also includes Walt Disney because on Nov. 14 it was reported that to make the Disney+ streaming service profitable amid economic uncertainty, the company had announced plans to freeze hiring and cut some positions.

The seriousness of the layoffs

Although there are several claims regarding these layoffs, the main question is how serious will this problem be and how far it will go in India.

Niraj Bora, Founder of Surmount Company Advisors Pvt Ltd, told News18: ‘Layoffs are not something the company benefits from, and employees are badly affected by this because companies are doing it suddenly.

According to him, almost all of these companies are loss-making and since they have not reached sustainable levels, while funding is drying up, it was a possibility.

“Once funding increases, the pace of continued growth will further increase the hiring frenzy. We can expect this from more start-ups/companies that don’t “have not achieved profitability. So survival is more important than not laying off employees or any kind of cost cutting,” he added.

Bora also predicted that in the future, employees will look for more sustainable businesses in the short term, until the funding scenario, the recession situation improves worldwide.

“After a certain period, this cycle would go away and the boom cycle would resume. This is the normal business cycle that we have experienced in the past and will experience in the future,” he noted.

Rajarshi Bhattacharyya, President and Managing Director of ProcessIT Global, asserted that the amount of investment an organization puts into each employee is substantial and that the departure of an employee, whether contract or office, does not is not an easy decision to make.

“However, current macroeconomic conditions associated with business unit performance compel organizations to take such actions and the impact of these decisions is not limited to geographic boundaries,” he noted.

He said: “But in most cases, organizations take note of the skills of the employee before they let them go. If organizations discover that human resources can be replenished in any other business unit, they do so.

In the case of Twitter’s dismissal decision, Bhattacharyya specifically said that it’s difficult to gauge the vision that Twitter 2.0 (after Musk’s takeover) will have.

He said: “Since Musk has proven time and time again to the world that his vision is future-proof, so it would be best to reserve our comment on that.”

But overall, he believes now is the time for organizations to consider cost reduction as a measure to improve profitability due to current economic conditions.

“We expect many organizations to take such steps in the near future and employees should immediately consider retraining to stay relevant,” he added.

Meanwhile, Christopher Roberts, Managing Director of Engaged Strategy, pointed out that the 2021 investor boom in India was quite hard countered by the economic slowdown, helped by the Russian-Ukrainian war, rising inflation and the US Federal Reserve’s hike in interest rates.

He explained that a majority of venture capitalists focusing on investments in India have markedly kept pending checks, investing only in safe calculated deals.

“This obviously led to massive layoffs in India after the bull run in the previous year,” he added.

Focusing on this job-cutting issue from a different angle, Roberts told News18, “Getting laid off instills in them a negative belief that they’re not good enough. If that belief system gets reinforced over time, perhaps due to a lack of job opportunities or social and family pressures, it can have a very negative socio-psychological impact on the employee concerned.

He therefore believes that in the current situation, it is extremely important for organizations to over-communicate and convince affected staff that redundancy decisions are purely clinical at company level, and do not call into question their competence.

Additionally, Roberts said, “It’s also important that they take a more empathetic stance and provide staff with not only the basic financial assistance to help them navigate the next two months, but also give them access to counselors to manage the equations, as well as helping where possible with alternative job opportunities in the market.

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