Q&A : Layoffs and Market Sentiment with Rahul Gonsalves

Q. Let's start with how the recession has kicked in and payroll being the biggest expense on any books that we see. Layoffs are the first thing that people go on to. What are your thoughts on it?

What you’re seeing right now in the larger market is a result of firms overestimating the shift towards digital and making large investments towards it. This ultimately hasn't necessarily paid off. They placed their bets on aggressive growth and devoted huge investments towards that. Today, post to years of the pandemic, the results are not exactly what we expected. The payroll, marketing, etc. are most often the big components in the overall optics. Hence, these are the first areas to be affected during this kind of a situation.

Q. Do you think these layoffs are going to benefit in some way with leaner organizations working with better efficiency?

Employees perform different roles, skill sets, and even temperament. Hence, each of them work better with a specific group. The problem with leaner teams arises when organizations try to blend these groups, which gets ambiguous and sets people for absolutely different roles than what they are skilled at.

Every organization has a large, complex system and they try to impose these simplistic ways of working on this system. This can lead to plenty of bad decisions by the organizations that can have negative consequences. We’re shifting towards two modes very quickly ~ the last two years being the mode of rapid growth. While the current one is to be efficient and careful about the capital.

Q. Employees want organisations to translate what these layoffs mean to them. What do you think?

The meaning of stability has changed over the years. Earlier, people preferred government jobs because of the environment at that stage where people preferred stability over anything; However, over the last five years, have been pretty different due to the amount of capital available and the low interest rates globally at a period of growth. For those employees, their experience includes a huge rise in the compensation and an infinite demand for a particular set of skills. But currently, we are still moving towards a very different direction.

Hence, it is advisable for people with only those five years of experience to look at it as an exception, not a norm. Even though it was a great phase for both the employees and the companies, I would caution people to be prepared for the fact that this particular situation may not exist in the next five years. Hence, you will have to make sure that:

• Your skill sets are improving constantly

• Your work is tied to the company’s key priorities

• You can prove that your work has impacted the company.

Q. What does the most empathetic ideal layoff scenario look like according to you? How do you think we can make it better for people that are affected?

I think the most important thing to look at is countries like The US, which brings in employees from a lot of other countries. Hence, for them, it’s not about losing jobs, but it is also about losing the ability to stay at a particular place. Plenty of people have their families living in those countries as well.

For them, work is one part of their life, but there's a huge other part of their life that's now going to be affected by this. How to set them up with the best possible support? One option is to probably prioritize these employees over others who aren’t in a similar position.

Another area to focus on during mass layoffs is to set up support for helping people find their new opportunities and also recognizing that there may be a certain time period where they may not have opportunities. In this scenario, I have seen some of the best companies actually extending healthcare benefits. These are significant. expenses that can come up. Hence, for the stipulated time period, companies can consider the possibility of extending these benefits even after they’ve been let go.

These are obviously other areas like people with disabilities or new parents towards which some sort of support is required to ensure things go comparatively better for them.

The second part is really about how you communicate both to the people who've been laid off as well as to the people who are remaining. Both are equally important stakeholders in this decision.

Is there anyone taking responsibility for this who’d come up and clarify the reasons behind the layoffs? They need to create clarity around the fact that this is not specifically based on your performance, as plenty of internal questions can arise and people might assume that they were let go because of their actions. Hence, it is extremely important to be clear about the WHY of the entire situation.

And the final thing is to ensure doing this as quickly, objectively, and cleanly as possible. Stretching this might call for complications, create doubts of rumors, and make people wait in a restless manner.