The Cost of Layoff Culture: How Short-Term Profits Are Undermining Long-Term Workforce Well-Being

In late 2022, a significant and controversial decision was made by laying off nearly 50% of a prominent company's workforce shortly after its acquisition. The company’s leadership famously claimed that operations were running smoothly despite the drastic reduction in staff. This bold statement from one of the world's most well-known tech leaders sparked a chain reaction in the industry. Corporate stakeholders across the sector took note, pressuring their CEOs to replicate this approach in order to maximize profits. Layoffs quickly became widespread, evolving into a key strategy for cost-cutting and profit-boosting.

Layoffs Become the Norm: Intel, Cisco, and More

In August 2024, the layoff culture escalated further. Intel shocked the market by announcing a 15% reduction in its global workforce, amounting to roughly 15,000 jobs. Just days later, Cisco Systems announced plans to lay off 7% of its employees, marking its second round of job cuts in 2024. Earlier, in February, Cisco had already laid off over 4,000 employees as it shifted its focus toward rapidly growing areas such as artificial intelligence and cybersecurity.

These layoffs are part of a disturbing trend. According to Layoffs.fyi, 384 tech companies laid off more than 124,000 employees in 2024 alone, adding to the staggering 428,449 tech workers who lost their jobs in 2022 and 2023. The scale of these cuts highlights how deeply entrenched the layoff culture has become within the tech industry, transforming job security into a relic of the past.

Corporate Greed and Stakeholder Pressure

The declaration that this prominent company could function smoothly with half the staff resonated with corporate stakeholders, who began demanding similar results from their own leadership. Layoffs quickly became a go-to solution, not just for struggling companies but for tech giants that were otherwise performing well. The rationale was simple: fewer employees meant lower operating costs, which translated to higher profits and happier shareholders.

Soon, smaller companies followed suit, emulating the behavior of tech giants. Layoffs became quarterly events, a standard practice to continually cut costs and maintain pressure on remaining employees. The result was a relentless cycle of layoffs, leaving workers in a constant state of fear and anxiety.

The Impact on Employees: Stress, Overwork, and Mental Health Crises

For employees, the impact has been devastating. As layoffs became the norm, job security vanished. Workers, terrified of being next in line for a pink slip, began working longer hours, often sacrificing personal time and health to prove their value to their employers. Overtime became the new normal, with many tech workers clocking in extra hours not out of passion or ambition, but out of fear of job loss.

This culture of fear has driven employees to extreme measures, with mental health emerging as one of the biggest casualties. Burnout, stress, and anxiety are rampant, with workers constantly feeling the pressure to deliver more while receiving less in return. In fact, the toll of this toxic work environment was tragically highlighted when a 26-year-old employee at Pune died due to work stress. Shockingly, no one from the company attended her funeral, further demonstrating the alarming disconnect between corporate priorities and employee well-being.

Corporate Greed at the Expense of Workers

The growing layoff culture, fueled by corporate greed, has turned job insecurity into a weapon of control. Companies that once prided themselves on innovation and employee-centric cultures are now using layoffs as a means to extract more productivity from a shrinking workforce. By perpetuating fear, companies are ensuring that workers remain compliant, unwilling to demand raises, benefits, or even basic work-life balance, all in an effort to simply retain their jobs.

These companies are choosing short-term financial gain at the expense of long-term employee welfare. As more workers are laid off, those who remain are subjected to increasingly demanding workloads, without any additional compensation or recognition. It’s a cycle that’s pushing employees to the brink, both mentally and physically.

Conclusion: A Call for Reform

As the layoff culture spreads, the cost to workers is becoming increasingly dire. While companies enjoy short-term profit boosts, the long-term damage to their workforce and overall corporate culture is becoming harder to ignore. The tragic death of the EY Pune employee is a stark reminder of the human toll that this relentless pursuit of profit can exact.

The fear-driven productivity model that has taken hold in the tech industry is unsustainable. Workers are breaking under the pressure of constant job insecurity, burnout, and mental health crises. The consequences extend beyond the individual; they affect families, communities, and the broader economy.

It’s time for the tech industry—and corporate culture as a whole—to reconsider its priorities. Sustainable growth cannot be built on a foundation of fear, stress, and exploitation. Companies must begin to recognize that healthy, engaged employees are their greatest asset. A shift toward more humane workplace practices is not just necessary for the well-being of workers—it’s critical for the long-term success of the companies themselves.

The rise of the layoff culture may have been sparked by a single event, but it’s now up to corporate leaders to change the course before the damage becomes irreversible. Employee well-being and job security must become central to the conversation, or the industry risks losing the very talent that drives its success.