this post was submitted on 14 Jan 2024
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It is 100% a real thing. American tech companies go through this cycle where they over-hire (on purpose) and then later on they lay a bunch of people off to "cut costs" and appear "financially responsible". This is also easier to manage (if you're a lazy dipshit) because you don't need to worry about your exact headcount so much, you can adjust later if you have too many or too few people. (It also gives a good excuse to get rid of people you don't like but who would otherwise be very hard to fire.)
Investors eat that shit up.
Since companies tend to report earnings and things around the same time, companies engaging in this strategy all tend to lay people off at the same time.
Here's a page tracking this phenomenon.
All these companies playing the layoff game at the same time, destabilizing the lives of million of people and their family. Is there any report on the damage to the economy at a whole?
Of course not, inconvenient things like that don't get investigated in the first place.
This is unthinkable in the EU. If a company isn't sure about the needed force, they need to hire temps.
If you don't have a technical or economical reason, you are not even allowed to lay off an employee.
And you have to give notice for a period, which is proportional to the time you worked for the company, or you have to pay this fully as severance and this can be more than a year.
Protected employees (voted as union representatives) are even harder to fire.
This does come with the downside that some, almost not productive, colleagues never get fired. But I guess it beats the alternative of having almost no protection.
The US companies claim they have economic reasons but really this is just part of a cycle that shareholders understand but companies hope employees will not.
They claim they're fixing problems by firing people, but for the most part these are companies that are more profitable than ever.
There's much less worker protection in the US, though. A lot of these companies have EU branches and I bet those EU branches are mostly left alone during these layoffs for that reason.