In a modern era where massive corporations and conglomerates are increasing their employment numbers by employing thousands to even millions of employees, the stability of the job market becomes more and more threatened. As economic fluctuations occur throughout a variety of the corporation’s aspects such as sales and competition, corporations choose to mass fire their employees as a way of budgeting. This can be seen with the electric car company Tesla, who’s CEO, Elon Musk, recently announced that they would be slashing their workforce by 10%, which is more than 3,300 employees (ABC7 Los Angeles 1). As these mass firings become more frequent, there are questions that need to be addressed about the situation of the job market: What are the causes behind these mass layoffs? Will they continue to occur in the future? How can employees adapt to this situation to ensure that they won’t be a part of these layoffs?
What are Mass Layoffs?
A mass layoff under the federal WARN Act occurs when at least 50 employees are laid off in a 30-day period if those employees made up ⅓ of the company’s workforce, 500 employees are laid off during a 30-day period, no matter how large the workforce, or an entire work site is closed down and at least 50 employees are laid off during a 30-day period (Legal Aid At Work 1). One of the most common reasons for mass layoffs is cost-reducing measures on behalf of the company. The company might be cost-cutting for reasons such as paying off debts, low sales, or even lack of financing. Another common reason is mergers and acquisitions. A merger is when two different companies combine and form one new entity, and this can affect employment because there could potentially be a surplus of employees from combining the two companies, or the existing employees do not fit the needs of the new entity. Another reason to consider is offshoring, which is a process where companies shift their operations to foreign countries, typically to save on labor and tax costs. During this process, the company is unlikely to keep their employees in their original location due to the new location having cheaper and more efficient labor. These are just a few of the many reasons behind mass layoffs within companies.
What is the Future for the Job Market?
Unfortunately, the situation of the job market is currently looking bleak. Statistics indicate that a staggering 92% of employers plan to release layoffs in 2024 as they navigate post-COVID-19 economic situations and adjust for overstaffing (Mondo 1). These layoffs are most expected in the tech sector. This is because during the COVID-19 pandemic, when everyone turned to technology, there was a mass need for technology specialists to help navigate the online realm for companies. This led to a surplus of employees within companies that were both unneeded and costly, leading to companies firing tech-related employees. While job creation might be growing, there is no indication as to when these layoffs will cool down, and the mass layoff movement only seems to be gaining momentum. There are also variable factors who have the potential to drastically change the job market; specifically, Artificial Intelligence. Experts believe that depending on the variable growth of AI usage, thousands to millions of jobs such as Business Intelligence Developers, Research Scientists, and Software Engineers could be created (Sakshi 1).
How can Employees Avoid Being Fired?
There are a variety of factors that go into layoffs that are beyond an employee’s control such as offshoring, relocation, and mergers and acquisitions, however, there are many things that an employee can do to avoid being part of a mass layoff. Firstly, an employee can try to gain new knowledge and certifications to add to their skillset. Companies fire employees primarily by looking at the employee’s worth to a company, and by gaining relevant skills and knowledge, and displaying those new skills to the employer, an employee can increase their worth to a company. Another thing that employees can do is engage in projects that are higher level in order to appeal to upper management. It is eventually the senior employees in a company who decide who will be fired, or kept, and taking on higher level projects that are more visible to these senior employers will build a positive public perception for the employee. It is important to keep in mind that these changes that employees make to themselves will not guarantee their employment; in fact, mass layoffs are often caused by a failure of management, not by failure of employees, which means that no matter how hard every employee might have worked to make the enterprise a success, the decision made by upper management are the primary cause behind failure (CNN 1).
Moving Forward
The momentum behind mass layoffs in big corporations seems to be steadily increasing. As over 53,000 employees have been cut from their jobs in the United States across massive companies such as Apple, Amazon, and Meta (INC 1), this number seems to steadily increase in relation to economic problems that stem from management problems in big corporations. There are no guarantees for steady employment for any employee in these mass layoffs since an employer will not hesitate twice for reasons such as cost cutting or strategic realignment (CNN 1). However, if the right steps are taken to improve one’s worth to the company, and public perception to upper management, then it could potentially be the deciding factor between being fired or surviving the purge.
