![Layoffs: What's the Optimal Approach? [Data + Visual Guide]](/en/content/images/size/w1280/format/webp/20250817093316_tech-layoffs-in-2022.jpeg)
Is there a Correct Method for Carrying out Job Terminations? (Includes Survey and Graphic)
The tech industry has been hit hard by layoffs in 2022, with the United States being the hardest-hit region due to its high rate of startup investment. The surge in layoffs can be attributed to various factors, including the Ukraine War, stock market volatility, inflation, and decreased spending.
Handling layoffs in the tech industry requires a thoughtful and empathetic approach. Best practices include transparent, bias-aware decision-making, comprehensive support for departing employees, clear and empathetic communication, and mechanisms to uphold diversity and inclusion during and after layoffs.
Transparent, Bias-Aware Layoffs
Companies should use data-driven bias analysis to avoid unconscious bias that disproportionately affects women and underrepresented groups in tech. This includes involving Employee Resource Groups (ERGs) and holding leaders accountable to maintain an inclusive culture.
Supporting Affected Employees
Providing comprehensive support such as severance packages, outplacement services, mental health resources, and career counseling is critical. In the evolving tech landscape, approaches like "acquihiring" have emerged, where startups are acquired primarily for their talent, preserving jobs and offering alternative exits during widespread layoffs.
Communication Strategies for Remote Layoffs
Clear, empathetic, and timely communication is essential, especially for distributed teams. Companies are encouraged to explain the reasons for layoffs honestly, outline next steps, and maintain open channels for questions and support. Avoiding "quiet firing" practices is necessary to reduce negative morale and legal risk.
Diversity and Inclusion
Maintaining diversity requires transparent processes and continuous monitoring post-layoff to ensure equitable impact assessment and adjustments.
Case Study: Coinbase
The recent layoffs at Coinbase serve as a case study for both best practices and areas for improvement. News of the company's financial problems was not exactly news to Coinbase employees. However, the CEO's announcement of the layoffs via personal email addresses caught many off-guard. Coinbase did well to acknowledge the decisions leading up to layoffs and offer a robust severance package and resource pool.
On the other hand, the lack of transparency and clear communication in the lead-up to the layoffs was criticized, as many employees had reported flagged concerns to leadership in the days leading up to the layoffs, but were assured layoffs were "not in discussion".
A well-executed public statement during a layoff can serve as a model for other companies. For example, AirBnB CEO Brian Chesky's open letter was praised for its transparency and empathy.
Looking Forward
As the tech industry continues to evolve, it's important for companies to prioritize transparency, clarity, and human-to-human conversation in layoffs. Over 75% of surveyed professionals recommend providing resources for laid off employees, and keeping lines of communication open is recommended by over 1/4 of surveyed professionals.
The overall job market is still robust, and more opportunities await. However, 1/4 of professionals surveyed urged for more conservative hiring approaches. As of January 2022, tech layoffs tracker, Layoffs.fyi, reports over 72,900 tech workers around the world have lost their jobs.
In summary, best practices include transparent, bias-aware decision-making, comprehensive support for departing employees, clear and empathetic communication particularly in remote contexts, and mechanisms to uphold diversity and inclusion during and after layoffs. The tech industry has seen a shift in employee priorities, with many preferring remote work. Companies that prioritize these best practices and prioritize their employees will be best positioned to navigate the challenges of the tech industry in 2022 and beyond.
[1] [Link to source 1] [2] [Link to source 2] [3] [Link to source 3] [4] [Link to source 4] [5] [Link to source 5]
An infographic maker could be used to visualize the impact of layoffs in the technology industry, focusing on factors contributing to the surge in job losses such as the Ukraine War, stock market volatility, inflation, and decreased spending.
The tech industry's shift towards remote work has emphasized the importance of technology for education-and-self-development, as well as general-news platforms that provide information on current affairs, including topics like workplace changes and layoffs.
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