Features

“Tech layoffs can impact a wide range of employees across different job functions” – In conversation with Baidyanath Biswas

By David Monaghan

28 March 2023

Pictured: Baidyanath Biswas, Assistant Professor of Digital Business at the DCU Business School, Dublin City University, Ireland

Dublin city has experienced a wave of layoffs in the technology sphere in recent months. Baidyanath Biswas, Assistant Professor of Digital Business at the DCU Business School, Dublin City University, Ireland joins Business & Finance Deputy Editor David Monaghan to discuss why this is happening.

Dublin city – long-cited as the ‘tech capital of Europe’ – has experienced a wave of layoffs in the technology sphere in recent months.

In February, eBay announced it would cut 500 jobs worldwide, 4 per cent of its global workforce.

Four months after Mark Zuckerberg said that 11,000 jobs would be cut across Meta operations worldwide, he announced on the 14th March that 10,000 further jobs are due to be cut globally.

On 20th March, Amazon CEO Andy Jassy stated the company’s intent to lay off 9,000 workers worldwide. This announcement comes after the multinational technology company said it would cut 18,000 jobs in January.

LinkedIn cut jobs in its recruitment team globally. TikTok announced job losses, too. As did Microsoft, Twitter, and Paypal.

Business & Finance looked at the impact of tech contraction on Irish workforces, and examined the reasons for its occurrence.

It would seem that multinational tech firms, in a rush to keep up with the demands of increased digitisation during the COVID-19 pandemic, experienced an increase in new hires.

The contraction we are currently witnessing in the industry seems to stem from an attempted ‘course-correcting’ or ‘recession-proofing’. That is, technology companies, in an effort to maintain a more sustainable growth model, are making changes to their operations. This includes job cuts.

Baidyanath Biswas is an Assistant Professor of Digital Business at the DCU Business School, Dublin City University, Ireland. His research interests are in digital business platforms, business analytics, enterprise IT risk management, and cybersecurity. His research has appeared in Decision Support Systems, Journal of Business Research, and Computers in Industrial Engineering.

He is also associated with top peer-reviewed international conferences in the information systems area, namely, HICSS and ICIS. He has a rich industry experience of nine years at Infosys and IBM working as a Mainframe and DB2 database programmer. Currently, Biswas serves on the editorial board of a few journals such as Electronic Markets (Springer) and Global Business Review (Sage).

In conversation with David Monaghan, Deputy Editor of Business & Finance, Biswas discusses his thoughts on the contracting tech sphere, the conditions that have led to the current climate in large tech, the future of technology companies in Dublin, and more.

David Monaghan (DM): What are your thoughts on recent developments in the tech sphere?

Baidyanath Biswas (BB): Layoffs are a common occurrence in the tech industry, and they can be caused by a variety of factors such as changes in business strategy, restructuring, economic downturns, or mergers and acquisitions. While they can be difficult for those affected by them, layoffs can also be a necessary step for companies to stay competitive and adapt to changing market conditions.

It’s worth noting that the tech industry has also seen significant job growth in recent years, with new technologies and business models creating new job opportunities. However, the COVID-19 pandemic has had a significant impact on the economy, including the tech industry, and has led to layoffs and furloughs across various sectors.

Overall, while layoffs are unfortunate for those impacted, they are a part of the normal ebb and flow of the tech industry, and companies must make difficult decisions to remain competitive in a rapidly changing marketplace.

DM: What conditions have led to the layoffs we’re seeing?

BB: Economic downturn: A struggling economy can lead to a decrease in demand for technology products and services, which can result in layoffs. This was especially true during the COVID-19 pandemic, which led to a global economic slowdown and significant job losses in many sectors, including the tech industry.

Changes in business strategy: Companies may restructure their business or shift their focus, which can result in layoffs. For example, if a company decides to pivot to a different product or service, it may no longer need as many employees in certain areas.

Mergers and acquisitions: When companies merge or are acquired, there may be overlapping roles and redundancies, which can result in layoffs as the new company streamlines operations.

Automation and outsourcing: The adoption of automation technologies or outsourcing certain roles to lower-cost regions can also result in layoffs, as companies look to cut costs and increase efficiency.

Declining revenue or profit margins: If a company is experiencing declining revenue or profit margins, it may need to reduce costs, which can result in layoffs.

DM: Who will be most affected by tech layoffs? Why?

BB: Tech layoffs can impact a wide range of employees across different job functions, but some groups may be more affected than others.

For instance, entry-level or junior employees: These employees may be more vulnerable to layoffs because they have less experience and are often paid less than more senior employees. In addition, if a company needs to reduce headcount quickly, it may be more likely to lay off employees with less tenure.

Employees in redundant or non-critical roles: Employees whose roles have become redundant due to automation, outsourcing, or other changes in the business may be more likely to be laid off. Similarly, employees in roles that are not considered critical to the company’s core operations may be more vulnerable to layoffs.

Contract or gig workers: Contract or gig workers may be more vulnerable to layoffs because they are not typically offered the same job security as full-time employees. In addition, if a company needs to cut costs quickly, it may be more likely to reduce its contract workforce.

Employees in struggling business units or divisions: If a company has a struggling business unit or division, the employees in those areas may be more at risk of being laid off as the company looks to cut costs.

Employees in companies with limited diversity and inclusion: Employees in companies with limited diversity and inclusion may be more vulnerable to layoffs because they may be less connected to the company culture and may not have the same networks or support systems as other employees.

DM: What can be done to help mitigate the effects?

BB: There are several ways to help mitigate the effects of tech layoffs on affected employees.

Offer outplacement services: Companies can provide outplacement services to employees who are being laid off. Outplacement services can include career counselling, resume writing assistance, job search support, and other resources to help employees find new job opportunities.

Provide severance packages: Companies can provide severance packages to employees who are being laid off. Severance packages can include financial compensation, continued health benefits, and other support to help employees transition to their next opportunity.

Retrain and upskill employees: Companies can provide training and upskilling programs to help employees develop new skills that are in demand in the job market. This can help employees transition to new roles within the company or find new job opportunities outside the company.

Encourage internal mobility: Companies can encourage internal mobility by providing opportunities for employees to move to different roles or departments within the company. This can help employees stay with the company and avoid layoffs.

Maintain open communication: Companies can maintain open communication with employees throughout the layoff process. This includes providing information about the reasons for the layoffs, the criteria for selection, and the support available to affected employees. Maintaining open communication can help reduce uncertainty and anxiety for affected employees.

In addition to these measures, governments and policymakers can provide support for workers who have been laid off through job training programs, unemployment benefits, and other forms of support.

DM: What does this mean for the future of the tech industry in Dublin/Ireland?

BB: There are potential challenges that could impact the growth of the tech industry in Dublin. For example, the uncertain geopolitical climate, changes in immigration policies, and competition from other countries could all affect the attractiveness of Dublin as a destination for tech companies.

To learn more about tech contraction, take a look at Dublin Tech Summit, which promises to host discussions and keynotes on this topic and more.