As layoffs at large tech companies continue in 2023, Mike Morini, CEO at WorkForce Software, speaks with HR Review about why this is happening now and how today’s business leaders can manage their teams effectively during these uncertain times.
“The tech industry is exiting a period of ‘growth at all costs’ – including large tech brands that originally saw high growth during the pandemic even as other industries struggled,” Morini says. “Many tech companies over-hired when access to growth capital was plentiful. Afterall, it’s in the industry’s DNA to innovate and explore new growth opportunities amid times of disruption.”
However, with recession worries and growth capital shutting down, organisations are no longer placing big bets on unproven futures. Now, with capital availability highly restricted, the tech industry is seeing increased scrutiny on experimental growth initiatives, he says.
“Many tech firms are returning to unit economics that prioritise profitability over growth. To deliver against this pivot, organisations have had to take actions that include staff layoffs,” Morini continues. “At this moment in time, digital management tools will be more important than ever to ensure we don’t see a second crisis of staff burnout and disengagement, with consolidated teams needing to do more with less.”