Friday, April 12, 2024
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A shiver ran down my spine when I read the reasons for the (new) layoffs announcements by Salesforce and Amazon in the past two days, as detailed in the WSJ.

Amazon: Amazon was one of the biggest beneficiaries of the Covid-19 pandemic as customers flocked to online shopping. The rush to Amazon’s various businesses, from e-commerce to groceries and cloud computing, pushed forward years of growth for the company. To keep up with demand, Amazon doubled its logistics network and added hundreds of thousands of employees.

Salesforce: Marc Benioff, who also serves as chairman of the company, said the business software provider hired too many people as revenue surged earlier in the Covid-19 pandemic. “I take responsibility for that,” he said.

In both these cases and innumerable others, the OPTIMISM of continued growth made companies hire irrationally. Having said this, there was GREED, too:

  • If there is such fantastic demand, why not hire for NOW (we can figure out later)
  • If we don’t hire and capture, our competitors will.
  • The market has changed forever! Post Covid realities will never return.

As we all know, what goes up must come down. Or, as I LOVE to say, wild fluctuations always regress to the mean. (I know it’s geeky, but I love it). Caught in this corporate drama are innocent employees. No one hired during the Covid era assumed that they would soon become as useless as the face masks they wore!

My learnings:

  • Responsibility before greed. I’ve heard OBNOXIOUS startup leaders say, “Let’s hire… we can fire later”, or “Who cares what we pay now? Anyway, we will lay off”. Don’t become a Macbeth of the Corp world!
  • For employees, while it’s fantastic to rush and sign up for world-class companies, do a BIT of soul-searching. Be rational. Think of what may happen.
  • The best ANTIDOTE? UPSKILL yourself – so that when people assume you’ve remained a face covering, you’ve graduated to become an oxygen mask. I would encourage you always to stay employable.

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