WHEN THE ECONOMY FALLS JOBS GO WITH IT

Inflation and interest rate hikes are causing companies in many sectors to lay off employees. To illustrate the employment trends and the socioeconomic implications, each week we will list important job losses from various sectors.

Warby Parker cut 63 corporate staff members
Peloton cut 800 staff, hiked prices and shut down stores
Best Buy is cutting an unknown amount of staff to improve profits
Calm cuts 20 percent of its 400 employees
GoHealth laid off 800 workers
SweetGreen is shrinking 5 percent
Truepill fired about a third or 175 people, in its third round of layoffs this year.
Soundcloud is letting go of 20 percent of its workforce.
Hootsuite is laying off 30 percent of its employees or roughly 300 people.
Apple laid off recruiters to slow their hiring process

Comments (2)

Preparing Yourself for Layoffs

The “It’s Not a Recession” is forcing companies to cut costs on a systematic basis. The typical initial response is to look for marginal items to cut. But marginal items are marginal. It doesn’t do much good to cut them.

One response is to cut advertising. The black hole effect takes over. If a company spends a dollar to generate 50 cents, it quits. The fact that the new customer will generate far more than a dollar in profits over a long period is not a consideration when a company is in survival mode.

Next, senior managers go looking for entire departments to reduce funding to. If the firm cuts research and development, it will lose long-term employees. Once they leave, they will not return. Cutting R&D is extremely risky for any firm that depends on new products.

When they cut budgets, middle managers have to decide: fire people or get everyone to agree to a fixed percentage pay cut. I think it’s best to fire people and have everyone else pitch in on the work load. This is psychologically not the same as a pay cut, although operationally it is: more work for the same pay instead of less pay for the same work.

People who survive the employment cut feel that they are important to the company. The company did not fire them. They are willing to work harder or longer for the sake of loyalty and for the sake of a job. If they perceive the cutback as a temporary response to a temporary recession, they won’t start looking for another job.

If a department really does function as a team — few do — then it would be better to ask everyone to take a pay cut. If morale is strong to begin with, then the individuals may be willing to suffer for the sake of team maintenance.

You had better assess now the character of your department. If it’s not a team, then your task is to make yourself indispensable to the person who has the power to fire you. If it is a team, do what you can to be perceived as a team player. Encourage everyone. I don’t mean become a cheerleader. Be subtle. If you see something working well, tell the person in charge. Mention it whenever appropriate in a conversation. Positive feedback is crucial in an economy in which negative feedback is everywhere.

One thing you must avoid like the plague is negative comments. In this environment, companies are oversupplied with negativity. As must as you can, verbally support the operations. If you see a problem, mention it only to someone who is in a position to fix it. Suggest a remedy. Even if it’s far-fetched, the fact that you tried to think of a solution will be appreciated.

These are simple steps. They are marginal. But in a time of economic crisis, every little bit helps.

August 19, 2022 Joseph Feibel

I wonder at what stage government jobs get cut. Whether federal, state, or local, they seem to be protected.

August 22, 2022 Jim Clowers

WHEN THE ECONOMY FALLS JOBS GO WITH IT

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