The Uncomfortable Inevitability of Redundancies
The following article is part one of a four-part series about the ins and outs of layoffs and outplacement services.
A simple Google search highlights the ongoing inevitability of redundancies in Australia. Redundancies at a major car manufacturer, healthcare company and media outlet are the latest to be announced, and redundancies in tech continue to plague the industry. The ups and downs—often with a few short years or even months in between—continue in industry after industry and at company after company.
Recent Redundancies
Recently, we’ve seen Amazon make thousands redundant globally but here in Singapore, we have seen the likes of Sea's Shopee, Facebook parent Meta, Stripe and Twitter announce similar plans and more companies beyond the tech sector looking likely to follow suit. In fact, the Ministry of Manpower expected retrenchment numbers to hit 4000 in the first quarter of 2023, up from 2,990 in the fourth quarter of 2022 and amid an uncertain global economic landscape pressures are likely to increase. And this inevitability isn’t reserved for corporate Singapore’s giants; we’re seeing many smaller businesses and particularly start-ups struggling and, in an attempt, to survive, making cuts to their workforce.
With so many potential triggers to force a company’s hand, from external factors such as new regulations or economic pressures, to internal factors like cost-cutting or a merger, redundancies are virtually unavoidable over the course of a business’ lifetime. The companies most often susceptible to redundancies are mature organisations, because with their age naturally comes more triggers.
Amazon’s troubles, which could lead to the forced exit of 27,000 workers in 2023, started with sub-par third quarter earnings, underperforming business units and a resulting pause and cancelation of its warehouse expansion plans last year. Understandably, the possibility of an imminent recession has only exacerbated their fears.
Uncomfortable Feelings
Today, perhaps more than ever, companies are increasingly sensitive to their former employees’ needs after redundancies. Among many leaders in the C-Suite, there seems to be a growing amount of sympathy and support—an acknowledgement that people’s well-being depends so much upon their work and the benefits which accompany it.
Amazon CEO Andy Jassy recently wrote the following to Amazon employees: “I’ve been in this role now for about a year and a half, and without a doubt, this is the most difficult decision we’ve made during that time (and, we’ve had to make some very tough calls over the past couple of years, particularly during the heart of the pandemic). It’s not lost on me or any of the leaders who make these decisions that these aren’t just roles we’re eliminating, but rather, people with emotions, ambitions, and responsibilities whose lives will be impacted.”
Jassy’s comments seem genuine and without pretence, more heartfelt and personal than cold and crafted. And oftentimes, these types of comments become action. For years, many companies which have experienced redundancies have offered some degree of outplacement services to support individuals with transitions. In fact, according to a 2021 study, approximately 44% of organisations indicated they offer outplacement for all or the majority of terminations, up 13% since 2018.
Of course, it’s those individuals who were made redundant which experience the most discomfort, wondering what now, what next, and what if it happens again. While it can be a demoralising feeling, it can also be a feeling of opportunity, particularly when taking advantage of outplacement services. A redundancy, in an unexpected way, can become a catalyst for skill development and even finding a more promising career path.
At the most macro level, a redundancy can affect morale across an entire company. No one is immune to its effects, including “survivors” who retain job security. Once the redundancy dust has settled, remaining employee commitment, morale, and satisfaction can collapse, presenting a major challenge for company leadership. While there’s no silver bullet, companies can encourage morale by being honest, communicating openly, offering reassurance about the company’s future, and empathetically taking care—as much as possible—of people who were let go.
The Complexities
Redundancies are as uncomfortable as they are inevitable. It’s a simple statement. It’s also a stern reminder that, as business leaders, you must remember this and be prepared for the complexities when the time comes. Speaking of redundancy complexities, they come in many shapes and sizes, from communication and public relations to compliance and legal.
In part two of this blog series, we’ll take a look at the biggest complexities and touch on how to simplify them, so stay tuned.