Tech Layoffs 2022 Reflections: Trends, Empathy & Leadership Styles

“This round of layoffs is less of a wave and more of a ripple,” said Gartner's Managing VP of Research, George Penn. Most economists don't believe that across-the-board layoffs will happen in the near future, given how well the job market has been holding up overall. Although businesses might be already turning a corner, the emotional impact layoffs have had on people has been extraordinary.

Tech layoffs 2022 have been loud. They've gained vast publicity for a reason. It is predominantly a question of how they happened.

What have the layoff trends been?

Gender and racial gap

When unemployment rates peaked at 10% during the Great Recession, people of color were among those most affected. Studies find that workers of color are generally the first to be fired during an economic downturn and last to be rehired during recoveries. In addition, a gender and racial wage gap exists, and it could grow larger during periods of tight labor market conditions which also typically cause more financial hardship for women due to greater student loan debt and what's commonly referred to as the "pink tax."

DEI - matters of peripheral concern

Unfortunately, it seems that companies are cutting back on HR and DEI teams during times of economic difficulty. Data shows that Diversity & Inclusion is clearly not as much of a priority to businesses for many. With the current climate, people are focused on simply surviving rather than innovating (DEI is still considered a luxury, not a necessity). This lack of time and availability for creativity results in fewer conversations, less openness, and overall more right-brained thinking. Companies are mainly trying to stay afloat during these times, positioning DEI goals in the periphery of their efforts.

Strong emotional impact

Research carried out by Stanford Graduate School of Business Professor Jeffrey Pfeffer has demonstrated that the stress layoffs takes a devastating toll on behavioral and physical health of employees. This finding is backed up by researchers, including Dr. Plummer who said: “We see a lot of people still who are unemployed because they don't want to go back to work, and that's a trauma response. They're afraid of re-engaging in environments where there's microaggressions and they don't have support. They don’t want to go back into a workplace that they believe is going to compromise their mental health."

With an overwhelming number of tech layoffs happening right before the holidays, one cannot help but wonder if empathy and "emotional intelligence" can last as business practices during difficult times in addition to good times.

Empathy in times of layoffs

According to TechCrunch, around 85,000 workers in the tech industry have lost their jobs from 35 different companies over this year. While Twitter, Meta, Amazon, Stripe and Salesforce all have their own methods of handling these cutbacks, none of them have gotten it right according to the social response. In fact, some approaches have been disastrous.

The quest for more emotionally intelligent and inclusive workplaces has grown during the pandemic. As employees become harder to attract and retain, traditional top-down leadership styles are making way for a more compassionate approach that is seen as beneficial not only for workers, but also for profitability.

Catalyst's recent study revealed that empathy is a strategic, must-have pillar, as it is an essential driver of employee's productivity indicators such as engagement, innovation and inclusion. Such findings hold true in times of crisis too.

Although it is easier to be nice when you're sharing good news, times are now toughening up, especially in the tech sector with a need for higher productivity and an increasing number of layoffs. With this atmosphere, can empathy still remain a workplace value?

Layoff Leadership Styles

Back in the day, leaders like Al Dunlop had a ruthless philosophy that may have been popular among men (“You’re not in business to be liked. If you want a friend, get a dog.”). However, with women taking on leadership roles, definitions of leadership expanded to include not only shareholders, but stakeholders of all kinds.

It seems we are currently stuck between two main ideologies - the "hard core" approach of Musk (referred to as a "sharp stick in the eye") vs the "I feel your pain", apologetic approach of Zuckerberg.

Some believe that the latter layoff style hasn't been authentic, labeled as "over-the-top", and overall questioning Zuckerberg's sincerity. Although Musk's approach to layoffs was rather drastic, it might have been perceived as more real.

Somehow, leaders' emotional intelligence seems just a bit too wooden, rather than from the heart.

When hired, employees get presented with the company's values, much of which are focused on kindness, togetherness, creativity etc. It feels like these were cast away when things started going astray. Isn't laying off just the right opportunity to bring the afore-mentioned values to life at full speed? Because how you lay people off will surely be seen, heard and remembered. One's leadership style during layoffs is like a trust certificate - will you be revered, will your remaining workforce be loyal and proud to work for your products and services? How will you rebound? Laying people off is essentially the most memorable reputation investment one will ever make.

In search of the truth, we are asking you: Is there a graceful way to lay people off without your sincerity getting dissected?

How can a leader respond resonantly when delivering outright bad news?

Please share your thoughts in the comments below.