Are tech layoffs inevitable, or can your company avoid them?
The
headlines
are
clear:
Recession
is
looming,
and
tech
companies
of
all
stripes
are
cutting
thousands
of
employees
from
their
rosters.
The
headlines
are
clear:
Recession
is
looming,
and
tech
companies
of
all
stripes
are
cutting
thousands
of
employees
from
their
rosters.
Yet,
despite
these
reductions,
TOPdesk,
an
IT
service
desk
software
company,
remains
committed
to
growing
its
footprint
as
it
continues
to
expand
its
internal
teams
and
has
no
plans
to
change.
Why?
Let’s
start
by
addressing
some
of
the
reasons
why
there
are
currently
so
many
tech
layoffs:
Exponential
growth
in
technology
Historically,
the
tech
sector
has
long
been
one
of
explosive
growth
from
responding
to
market
drivers.
One
of
the
recent
market
drivers
for
most
technology
companies
was
the
massive
shift
toward
e-commerce
spending
and
remote
shopping
during
the
pandemic
lockdowns.
This
increase
created
an
assumption
of
growth,
and
subsequent
massive
hiring
initiatives.
When
lockdown
mandates
eased
and
people
began
leaving
their
homes,
big
tech
companies
saw
changes
to
spending
and
consumer
behaviors,
cutting
into
their
revenue
and
projections.
As
a
result,
a
common
refrain
from
the
sector
emerged
in
late
2022:
inflation,
changing
consumer
behavior,
and
recession
concerns
mean
taking
a
cautious
approach
to
the
days
ahead.
Businesses
shifted
to
protect
profits,
revenue,
and
long-term
sustainability.
Investors
applied
pressure
to
scale
back
expenses
to
preserve
profit
margins,
and
organizational
leadership
responded.
According
to
World
Economic
Forum,
chief
economists
expect
the
United
States
to
experience
24%
inflation
growth
and
91%
weak
economic
gain.
From
large
tech
corporations
to
start-ups,
workforce
reductions
have
rippled
through
the
tech
industry
as
a
result.
Most
of
the
major
organizations
cutting
staff
are
not
near
bankruptcy
or
insolvency.
Tech
has
always
been
a
growth-oriented
industry.
Silicon
Valley
has
always
focused
on
high-flying
innovations,
unicorn
startups,
and
massive
growth.
The
sector
has
remained
unusually
resilient
even
during
major
economic
downturns
(think
the
Great
Recession
or
COVID
pandemic).
When
it’s
down,
it’s
never
down
for
long.
But
when
a
potential
recession
threatens
its
profit
margins,
that
doesn’t
mean
the
industry
takes
it.
One
way
to
keep
pace
with
a
history
of
massive
growth
is
to
sell
more
products
or
raise
prices.
Another
is
to
slash
its
workforce
and
reduce
expenses.
With
a
downturn
on
the
horizon,
many
companies
opt
for
the
latter.
They
need
to
pivot
Alongside
its
massive
growth,
tech
is
renowned
for
quick-paced
innovation
and
industry
disruption.
But
the
constant
shift
in
tech
and
strategies
means
that,
inevitably,
some
teams
need
to
catch
up.
Sometimes,
even
high-flying
companies
have
to
make
cuts
in
some
areas
to
ensure
others
receive
essential
R&D
funding.
For
firms
facing
cuts,
channeling
resources
into
new
strategies
could
prove
beneficial
long
term.
But,
unfortunately,
that
means
tech
layoffs
are
an
unavoidable
reality.
Tech
companies
copy
each
other
Many
tech
companies,
like
lemmings,
follow
each
other
blindly
based
on
trends
and
what
they
see
others
doing.
Layoffs
are
only
sometimes
good
for
a
company’s
financial
health
and
may
hurt
it.
Some
do
it
only
because
other
companies
are
doing
it.
Likewise,
investors
have
a
say
in
most
tech
organizations’
operations
and
their
bottom
lines.
Future
success
determines
many
daily
decisions,
especially
those
firms
that
are
publicly
traded.
Another
factor
at
play
is
that
tech
companies
operate
on
margins,
which
affects
their
decisions
to
hire
and
fire.
So,
when
an
investor
reads
an
earnings
statement,
those
reserves
aren’t
what
they’re
thinking
about;
instead,
they
are
measuring
tech
companies’
investment
value
per
employee.
When
revenue
is
down,
headcount
follows.
That
doesn’t
mean
the
organization
is
not
making
money
or
having
trouble
paying
its
bills;
this
only
means
employees
are
eating
into
profits.
To
rectify
this,
layoffs
occur.
Software
companies
like
Microsoft
usually
have
$500,000
in
revenue
per
employee
or
at
least
a
minimum
of
$300,000.
Of
course,
this
can
be
higher,
but
headcount
is
evaluated
when
it
descends
below
that
threshold.
What
TOPdesk
does
TOPdesk
is
a
tech
company
that
does
this
differently.
As
a
private
company
under
the
same
leadership
since
it
began
in
the
early
’90s,
our
culture
isn’t
driven
by
quarterly
forecasts
or
fears
of
recession
or
worse.
So,
for
example,
during
the
worst
of
the
COVID
pandemic,
TOPdesk
took
a
hard
line
on
layoffs:
there
wouldn’t
be
any!
Adapt,
respond,
evolve,
and
change,
but
leave
no
one
behind.
To
this
day,
years
after
that
decision
was
made
during
the
scariest
of
times,
the
leadership
team
agreed
that
no
employees
nor
contractors
would
be
asked
to
resign,
take
a
furlough,
or
find
work
elsewhere.
We
were,
and
are,
in
this
together.
As
long
as
the
individual
wants
to
be
here,
contributes
values,
and
wants
to
learn,
grow
and
succeed,
they
can
remain
TOPdeskers.
Like
every
other
organization,
we
had
to
adapt
quickly
to
how
we
worked.
But
we
never
stopped
hiring;
we
just
changed
the
process.
Online
onboarding
of
newly
hired
employees,
video
and
virtual
interviews
for
open
positions,
freshly
hired
employees
learned
our
culture
virtually
from
their
internet
connection.
Teams
and
teamwork
operated
in
a
virtual
hub.
Annual
performance
reviews,
standup
meetings,
coaching,
sales
team
check-ins,
technology
implementations,
and
client-side
relationship
management
became
virtual,
but
we
all
stood
together
and
became
stronger.
As
fear
of
a
recession
rises,
TOPdesk
doesn’t
change.
Our
philosophy
is
the
same.
That’s
the
difference
in
our
culture
versus
that
of
many
other
big
tech
companies.
Our
team
members
are
our
team.
They
are
not
a
number,
nor
are
they
seat
fillers.
This
is
only
possible
through
a
strong
culture
built
on
pillars
of
freedom,
trust,
and
responsibility
for
employee
outcomes.
Our
organizational
leaders
encourage
team
members
to
take
the
freedom
needed
while
responding
to
challenges
as
they
arrive.
Personal
freedom
is
necessary
for
the
health
of
the
organization
and
its
individuals.
However,
freedom
and
independence
are
built
only
upon
trust
and
responsibility.
Without
trust
and
responsibility,
there
can
be
no
freedom.
They
all
function
in
tandem.
These
three
factors
define
our
organization
and
its
people,
not
revenue
ups
and
downs;
that’s
how
we
differ.
These
factors
set
us
apart,
even
during
the
wildness
of
an
unpredictable
economy.
While
counterintuitive
and
not
always
easy,
how
we
respond
to
these
and
other
stimuli
determines
our
internal
culture,
even
when
facing
external
influence.
Ultimately
and
evermore,
we
must
stand
for
our
people;
their
well-being
comes
first,
and
positive
results
will
follow.
When
the
focus
is
on
employee
happiness
and
well-being,
business
results
have
been
proven
to
follow.
Discover
more
about
TOPdesk
and
how
we
work
with
companies
to
improve
their
IT
solutions
here:
https://www.topdesk.com/en/about-topdesk/
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